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Module 7 Topic 1 Posting To The Ledger

This document discusses the steps for posting journal entries to ledger accounts, including transferring the date, explanation, journal reference, debit and credit amounts from the journal to the appropriate ledger accounts. It provides an example of a journal entry and the corresponding ledger accounts with postings. It also discusses summarizing the ledger accounts by computing a running balance for each account after each transaction is posted.

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385 views

Module 7 Topic 1 Posting To The Ledger

This document discusses the steps for posting journal entries to ledger accounts, including transferring the date, explanation, journal reference, debit and credit amounts from the journal to the appropriate ledger accounts. It provides an example of a journal entry and the corresponding ledger accounts with postings. It also discusses summarizing the ledger accounts by computing a running balance for each account after each transaction is posted.

Uploaded by

Mary Grace
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Financial Accounting and Reporting Posting and Unadjusted Trial Balance

MODULE VII
TITLE: POSTING TO THE LEDGERAND
PREPARATION OF TRIAL BALANCE

Topic 1: POSTING TO THE LEDGER


Time Allotment: 2 hours

Learning Objectives:
At the end of the module, you will be able to:
a. Anayze the steps in posting journal entries to the ledger
b. Post journal entries to the ledger
c. Summarize the ledger

Activating Prior Learning


The statements below are the steps in posting a journal entry in the ledger.
Arrange the steps in proper order. Write the letter of your anaswer in the ladder
below.
A. Explain the transactions briefly. (e.g. Investment by the owner.)
B. Transfer the page number from the journal to the journal
reference (J.R.) column of the ledger.
C. Transfer the date of the transaction from the journal to the ledger.
(Note: Transferring of journal entries should be done
chronologically, meaning, it is arranged according to the date of
transactions.)
D. Post the debit amount in the journal as debit in the ledger and the
credit amount in the journal as a credit in the ledger.
E. Enter the account number in the posting reference (P.R.) column
in the journal. This is in order for you to check if all transactions
in the journal are already posted into the ledger.

Step 5

Step 4

Step 3

Step 2
Answer here

Step 1
Financial Accounting and Reporting Posting and Unadjusted Trial Balance

Answer
Steps;
1. C 2. A 3. B 4. D 5. E
How much score did you get?
Try to assess your performance based on the given scores and their descriptive
value.
4 - Excellent
3 - Good
2 - Fair
0-1 - Poor

Congratulations! You did a great job.

Presentation of Content

THE LEDGER

Ledger is a tool used for classifying and summarizing information


about increases, decreases, and balances of items in the chart of
accounts.

Accounts in the ledger are classified into two (2), namely:


1. Permanent accounts – also called the balance sheet accounts
which is composed of the asset, liabilities and owner’s equity.
2. Temporary accounts – also called income statement accounts
or nominal accounts (income and expenses). These accounts
are used to gather information for a particular accounting
period. At the end of the period, the balances of these accounts
are transferred to a permanent owner’s equity account.
A ledger organizes information in the journal entries per account.
The ledger contains the account title, account number, the date, the
explanation of the transactions, the journal reference, the debit and the
credit amount and the balance of the accounts. Below is an example of a
ledger.

Preparation of Ledger
Every account in the chart of accounts has its own ledger. In the
preparation of ledger, the following steps must be taken:
Financial Accounting and Reporting Posting and Unadjusted Trial Balance

1. Prepare a template of a ledger containing the following


information:
a. Account title
b. Account number
c. Date
d. Explanation
e. Journal Reference (J.R.)
f. Debit
g. Credit
h. Balance (Debit and Credit)

Sample ledger:

2. Get the account title and account number from the chart of
accounts.

Note: All accounts in the chart should have its own ledger.

110

POSTING TO THE LEDGER

POSTING TO THE LEDGER


After 3analysing and journalizing of transactions, the next step
will be the posting or transferring of data from the journal to the
appropriate accounts in the ledger. This step is called posting. This step
is done through transferring the amount of debit and credit in the
journal entry to the ledger accounts. The purpose of posting is to classify
the effects of transactions on specific accounts (assets, liabilities, owner’s
equity, income and expenses) in order to produce a meaningful
information. Since data in the journal does not provide information on
Financial Accounting and Reporting Posting and Unadjusted Trial Balance

the total effect of all the transactions in each account, there is a need to
classify each transaction in order to produce the needed information.

The following are the steps in posting of transactions to the ledger:

1. Transfer the date of the transaction from the journal to the ledger.
(Note: Transferring of journal entries should be done
chronologically, meaning, it is arranged according to the date of
transactions.)
2. Explain the transactions briefly. (e.g. Investment by the owner.)
3. Transfer the page number from the journal to the journal
reference (J.R.) column of the ledger.
4. Post the debit amount in the journal as debit in the ledger and the
credit amount in the journal as a credit in the ledger.

5. Enter the account number in the posting reference (P.R.) column


in the journal. This is in order for you to check if all transactions
in the journal are already posted into the ledger.

Illustartion: Post the following transactions to the ledger

GJ-1
Account Titles and P.R
Date Debit Credit
Explanation .
2018

Cash 100,000.00

July
Store Furniture and Equipment 30,000.00
1
SDB, Capital 130,000.00
To record the initial investment.

July
Supplies 25,000.00
3
Cash
Financial Accounting and Reporting Posting and Unadjusted Trial Balance

25,000.00
To record the purchase of supplies.

Rent Expenses 15,000.00


July
4
Cash 15,000.00
To record payment of rent.

Purchases 45,000.00
July
5
Cash 45,000.00
To record the acquisition of merchandise.

Cash 30,000.00
July
6
Sales 30,000.00
To record the sales of inventory.

Solutions:
Financial Accounting and Reporting Posting and Unadjusted Trial Balance

Posting using a T-Account:


Example

SUMMARIZING THE LEDGER

After posting the journal entries to the ledger, the balance of the
account should be computed. Take note that the balance should be a
running balance, meaning, balances are computed after every
transaction. The balances of each account should be placed on their
appropriate normal balnce column (either debit or credit).
Financial Accounting and Reporting Posting and Unadjusted Trial Balance

Let us summarize the illustration above using a T-account

CASH
1-Jul-18 125,000
2-Jul 105,000
3-Jul 30000
4-Jul 50000
230,000 80000
Balance 150,000

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