Ledger Posting
Module 1:
Foundations of Accounting
Duration:
45-60 minutes
Level:
Beginner to Diploma-Level
Lesson Objectives
➛ Define a ledger and explain its purpose in accounting.
➛ Transfer | post | journal entries into T-accounts.
➛ Understand how debits and credits appear in ledger accounts.
➛ Balance a ledger account correctly.
➛ Prepare simple ledger postings from a given journal.
Key Vocabulary
➛ Ledger
➛ Posting
➛ T-Account
➛ Account Balance
➛ Folio
➛ Debit Side
➛ Credit Side
What is a Ledger?
The ledger is called the book of final entry because all transactions from the journal end up here.
Each account has its own page in the ledger.
Example accounts
➛ Cash
➛ Capital
➛ Rent Expense
➛ Sales Revenue
➛ etc.
What is Posting?
Posting means transferring journal entries to the ledger.
Steps
➛ Identify the accounts involved.
➛ Post the debit entry in the debit side of that account.
➛ Post the credit entry in the credit side of the other account.
➛ Write narration|folio if needed.
The T-Account Format
Cash Account
Debit (Dr)
Credit (Cr)
Left side = Debit
Right side = Credit
Balancing an Account
➛ Total the debit side.
➛ Total the credit side.
➛ Find the difference.
➛ Insert Balance c/d | carried down.
➛ Bring it down next period as Balance b/d | brought down.
Posting a Journal Entry
Journal Entry
Date
10/25
10/25
Cash
Dr 1,000
Dr 1,000
Capital
Cr 1,000
Cr 1,000
Narration
Cash received for investment
Ledger Posting
Cash Account
Debit
10/25
1,000
From Capital
10/25
1,000
From Capital
Credit
Capital Account
Debit
Credit
10/25
1,000
From Cash
10/25
1,000
From Cash
Identify Debit or Credit
State whether the account is debited or credited:
➛ Bought office supplies for cash
➛ Owner invested capital
➛ Paid rent
➛ Sold goods for cash
➛ Business took a loan
Post to Ledger | T-Accounts
Post the following journal entries
Cash
Dr 500
Dr 500
Sales Revenue
Cr 500
Cr 500
Rent Expense
Dr 200
Dr 200
Cash
Cr 200
Cr 200
Equipment
Dr 1,000
Dr 1,000
Accounts Payable
Cr 1,000
Cr 1,000
Balance the T-Account
Given this Cash Account
Cash Account
Debit
1,000
500
400
1,000
500
400
Credit
300
200
300
200
Find the closing balance.
Folio Linking Practice
Match the items
Journal Folio
J1
J2
J3
J1
J2
J3
Ledger Folio
L3
L1
L2
L3
L1
L2
Match them like this
J1 ➧ ?
J2 ➧ ?
J3 ➧ ?
There is no “correct” accounting answer - this tests understanding of the cross-reference system.
Mini Case Study
A small tech shop recorded these transactions in the journal
➛ Owner invested $4,000 cash.
➛ Bought a printer for $300 on credit.
➛ Paid $150 for electricity.
➛ Received $500 from a customer.
➛ Returned defective goods worth $100 to supplier.
________________
➛ Prepare the journal entries.
➛ Post them to ledger accounts (Cash, Capital, Accounts Payable, Equipment, Electricity Expense, Sales Revenue, Purchase Returns).
➛ Balance the Cash Account after all postings.
Quick Quiz
➛ What is a ledger?
➛ What is posting?
➛ On which side of the ledger do debits appear?
➛ True or False | Balancing means making the debit equal to the credit.
➛ What is the purpose of account folios?
Answers ➧ Here
Trial Balance ➧ Here