Posting Entries in the Ledger

The ledger is a book of accounts where all the financial transactions of a business are recorded. Posting entries in the ledger is an essential part of the accounting process. Let's understand how it is done.

Source of Posting Entries
The entries in the ledger are posted from the journal. The journal is the book of original entry where all the transactions are recorded in chronological order. Every transaction is recorded in the journal with the help of a voucher. A voucher is a document that provides details of the transaction such as date, amount, nature of the transaction, etc.

Process of Posting Entries
The process of posting entries in the ledger is as follows:

1. Identify the accounts
Before posting the entries in the ledger, we need to identify the accounts affected by the transaction. Each account has a unique name and a code. For example, cash account is represented by the code 'CASH', and sales account is represented by the code 'SALES'.

2. Determine the type of account
After identifying the accounts, we need to determine the type of account. There are three types of accounts in the ledger - personal, real, and nominal. For example, cash account is a real account, sales account is a nominal account, and the account of a debtor is a personal account.

3. Determine the side of the ledger
After identifying the type of account, we need to determine the side of the ledger on which the entry will be posted. There are two sides of the ledger - debit and credit. The debit side represents the increase in assets and decrease in liabilities, while the credit side represents the increase in liabilities and decrease in assets.

4. Post the entry
Finally, we need to post the entry in the ledger in the respective account on the determined side. The entry is recorded with the help of a journal entry. The journal entry consists of the date, the accounts affected, the amount, and the narration.

Conclusion
Thus, we can conclude that posting entries in the ledger is done from the journal. The journal is the book of original entry where all the transactions are recorded in chronological order. The process of posting entries in the ledger involves identifying the accounts, determining the type of account, determining the side of the ledger, and posting the entry in the respective account on the determined side.