How to post from the journal to the ledger

Ledger

What you need

• A complete journal entry showing the date, the account debited, the account credited, the amount and the folio column.
• Knowledge of the rules of debit and credit according to the type of account (asset, liability, capital, income, expense).
• A ledger book containing the relevant accounts in ledger format (T-account or three-column).
• An understanding of the purpose of the folio column for cross-referencing between the journal and the ledger.

Step by step

1. 1

   Read and understand the journal entry

   Check the entry in the journal to identify the transaction date, the account debited, the account credited and the amount. Example: on 1 May 2024, Perniagaan Setia started business by bringing in cash of RM50,000 as capital. The entry in the General Journal is Debit Cash Account RM50,000; Credit Capital Account RM50,000. Make sure the total debit equals the total credit before you begin posting.

2. 2

   Identify and open the ledger accounts involved

   Open a ledger account for each account named in the entry. For this example, open the Cash Account and the Capital Account. If an account does not yet exist, set up a new one and give it a folio page number, for example the Cash Account on page L1 and the Capital Account on page L2.

3. 3

   Post the debit amount to the debit side of that account

   Go to the account debited in the journal (the Cash Account) and record the amount on its debit side. Fill in the date (2024 May 1), the particulars (the name of the opposite account, 'Capital'), the folio and the amount (RM50,000). So the debit side of the Cash Account reads: May 1, particulars Capital, RM50,000.

4. 4

   Post the credit amount to the credit side of that account

   Go to the account credited in the journal (the Capital Account) and record the amount on its credit side. Fill in the date May 1, the particulars 'Cash' (the name of the opposite account) and the amount RM50,000. So the credit side of the Capital Account reads: May 1, particulars Cash, RM50,000. Remember that the particulars are always the name of the opposite account, never the account's own name.

5. 5

   Fill in the folio column for cross-referencing

   In the ledger, fill in the folio column with a reference to the opposite account. In the Cash Account the folio shows L2 (the page of the Capital Account); in the Capital Account the folio shows L1 (the page of the Cash Account). Back in the journal, fill in the folio column with L1 and L2 to mark that the entry has been posted. This cross-reference makes entries easy to trace.

6. 6

   Repeat the process for all journal entries

   Repeat steps 3 to 5 for every other transaction in date order. Example: on 3 May, Perniagaan Setia bought furniture for RM4,000 cash: Debit Furniture Account RM4,000; Credit Cash Account RM4,000. Post the RM4,000 to the debit side of the Furniture Account (particulars Cash) and to the credit side of the Cash Account (particulars Furniture).

7. 7

   Check the accuracy of the posting

   After all entries are posted, check that every debit amount in the journal has been posted to the debit side of the ledger and every credit amount to the credit side. Make sure the date, amount and particulars are correct and that no side of an entry is left out. This check helps ensure the Trial Balance will balance later.

Second example

An example with a creditor account: on 5 May 2024, Perniagaan Setia bought office equipment worth RM3,000 on credit from Kedai Harmoni (Invoice 305). A credit purchase of a non-current asset is recorded in the General Journal: Debit Office Equipment Account RM3,000; Credit Kedai Harmoni Account (creditor) RM3,000. To post, record RM3,000 on the debit side of the Office Equipment Account with particulars 'Kedai Harmoni', and RM3,000 on the credit side of the Kedai Harmoni Account with particulars 'Office Equipment'. Fill in the folio column of both accounts for cross-referencing and mark the folio in the journal once done. Although no cash changes hands, the posting rule is the same: debits go to the debit side and credits to the credit side.

Common mistakes

Related chapter: Ledger →

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