If posting is interrupted, the accounting personnel know to resume posting
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We have covered a lot of new words and concepts in this chapter, this video gives you a preview of what happens next when we organize the journal entry information: Show A journal entry is like a set of instructions. The carrying out of these instructions is known as posting. The video provides a clear description of where in the accounting cycle posting occurs. As stated earlier, posting is recording in the ledger accounts the information contained in the journal. The good news is you have already done the hard part — you have analyzed the transactions and created the journal entries. When you post, you will not change your journal entries. If you debit an account in a journal entry, you will debit the same account in posting. If you credit an account in a journal entry, you will credit the same account in posting. After transactions are journalized, they can be posted either to a T-account or a general ledger. Remember – a ledger is a listing of all transactions in a single account, allowing you to know the balance of each account. The ledger for an account is typically used in practice instead of a T-account but T-accounts are often used for demonstration because they are quicker and sometimes easier to understand. The general ledger is a compilation of the ledgers for each account for a business. Below is an example of what the T-Accounts would look like for a company.  In contrast to the two-sided T-account, the three-column ledger card format has columns for debit, credit, balance, and item description. The three-column form ledger card has the advantage of showing the balance of the account after each item has been posted. It is very important for you to understand the debit and credit rules for each account type or you may not calculate the balance correctly. Notice that we give an explanation for each item in the ledger accounts. Often accountants omit these explanations because each item can be traced back to the general journal for the explanation. The following are examples of Ledger cards for the some of the accounts from the same company shown in T-accounts above (see how you get the same balance under either approach). Notice in these ledger examples that Cash is an asset and a debit increases an asset and a credit decreases an asset. Accounts Payable is a liability account and Design Services Revenue is a revenue account but both accounts increase with a credit and decrease with a debit. Posting is always from the journal to the ledger accounts. Postings can be made (1) at the time the transaction is journalized; (2) at the end of the day, week, or month; or (3) as each journal page is filled. The choice is a matter of personal taste. When posting the general journal, the date used in the ledger accounts is the date the transaction was recorded in the journal, not the date the journal entry was posted to the ledger accounts. The accounting equation serves as an error detection tool. If at any point the sum of debits for all accounts does not equal the corresponding sum of credits for all accounts, an error has occurred. It follows that the sum of debits and the sum of the credits must be equal in value. Double-entry bookkeeping is not a guarantee that no errors have been made—for example, the wrong ledger account may have been debited or credited, or the entries completely reversed. If you would like to see what it looks like to move journal postings into a general ledger in Excel, watch this additional video. TermDefinition The number assigned to an account.Term Definition A journal entry made to correct an error in the ledger.Term Definition The procedure for arranging accounts in a general ledger, assigning account numbers, and keeping records current.Term Definition A ledger that contains all accounts needed to prepare financial statements.Term Definition Term Define opening an accountDefinition Writing an account title and number on the heading of an account.Term Definition Transferring information from a journal entry to a ledger account.Term Definition Determining that the amount of cash agrees with the balance of the cash account in the accounting records.Term T/F Because an account form has columns for the debit and credit balance of an account, it is often referred to as the balance-ruled account form.Definition Term T/F The asset division accounts for Encore Music are numbered in the 100s.Definition Term T/F The cash account is the first asset account and is numbered 110.Definition Term T/F The second division of Encore Music's chart of accounts is the owner's equity division.Definition Term T/F The first digit of account numbers for accounts in the owner's equity ledger division is 3.Definition Term T/F The last two digits in a 3-digit account number indicate the general ledger division of the account.Definition Term T/F When adding a new expense account between accounts numbered 510 and 520, the new account is assigned the account number 515.Definition Term T/F Encore Music arranges expense accounts in chronological order in its general ledger.Definition Term T/F The two steps for opening an account are writing the account title and recording the balance.Definition Term T/F Each amount in the Debit and Credit columns in a general journal is posted to the account written in the Account Title column.Definition Term T/F The posting reference should always be recorded in the journal's Post. Ref. column before amounts are recorded in the ledger.Definition Term T/F The only reason for the Post. Ref. columns of the journal and general ledger is to indicate which entries in the journal still need to be posted if posting is interrupted.Definition Term T/F The steps for posting are to write the date, journal page number, amount, and balance.Definition Term T/F If the previous account balance and the current entry posted to an account are both debits, the new account balance is a debit.Definition Term T/F When all posting is complete, the journal's Post. Ref. column is completely filled.Definition Term T/F Cash is proved by comparing the cash balance shown in the checkbook with th ecash balance in the general ledger cash account.Definition Term Definition Term Normal balance of owner's capital account.Definition Term Account balance column in which the account balance is recorded when the only entry is a credit.Definition Term Balance column in the capital account after an intial investment is posted.Definition Term Normal balance of Supplies.Definition Term Column in the accounts payable account in which an entry for supplies bought on account is posted.Definition Term Account balance column in which the new account balance is recorded when the previous balance is a debit of $500.00 and the current entry is a credit of $200.00.Definition Term Definition Term Normal balance of Rent ExpenseDefinition Term Balance column in the cash account which is compared with the checkbook to prove cash.Definition Term Account numbers may be assigned by 10s so that new accounts can be easily added.Definition Term T/F A journal shows in one place all the changes in a single account.Definition Term T/F The procedure of arranging accounts in a general ledger, assigning account numbers, and keeping records current is posting.Definition Term T/F If a business has only two asset accounts, Cash and Supplies, the two accounts are numbered 110 and 120.Definition Term T/F If a new account is located between accounts numbered 510 and 520, the new account number should be 115.Definition Term T/F A journal page number is written in the Post. Ref. column of an account to show that posting of the entry is completed.Definition Term T/F The account number is placed in the Post. Ref. column of the journal as the last step in the posting procedure.Definition Term T/F If the previous account balance and the current entry posted to an account are both debits, the new account balance is a debit.Definition Term T/F The Cash account is the first asset account and is numbered 100.Definition Term T/F When adding a new expense account between accounts numbered 510 and 520, the new account is assigned the account number 515.Definition Term T/F The two steps for opening an account are writing the account title and recording the balance.Definition Term T/F The posting reference should always be recorded in the journal's Post. Ref. column before amounts are recorded in the ledger.Definition Term T/F The only reason for the Post. Ref. columns of the journal and general ledger is to indicate which entries in the journal still need to be posted if posting is interrupted.Definition Term T/F When all posting is complete, the journal's Post. Ref. column is completely filled.Definition Term T/F The first digit in the account number 120 means that the account is in the liability division of the general ledger.Definition Term T/F When accounts are arranged in a general ledger, account numbers are assigned, and the chart of accounts is kept up to date, the accounting personnel are doing the file maintenance.Definition Term T/F The procedure for transferring information from a journal entry to a ledger account is journalizing.Definition Term T/F The first step in the posting procedure is writing the journal page number in the Post. Ref. column of the account.Definition Term T/F The last step in the posting procedure is writing the entry amount in the Debit or Credit column of the account.Definition Term T/F An account number in the journal's Post. Ref. column shows the account to which an amount is posted.Definition Term T/F Posting references in a journal are not necessary.Definition Term T/F If posting is interrupted, the accounting personnel know to resume posting the next day.Definition Term T/F When the previous balance of an account is zero and a credit amount is posted to the account, the new balance is a credit.Definition Term T/F Determining that the amount of cash agrees with the accounting records is proving cash.Definition Term Definition What are the rules of posting in accounting?A general rule of posting is that both credited and debited entries must be equal when an accountant posts them in the general ledger. The accountant simply has to enter the same amount from the first entry to the second entry. You can create two different columns to denote credit versus debit.
How does an accountant know if a journal entry has been posted from the journal to the ledger?Definition: A posting reference column, often abbreviated PR, is a column in the general journal that is used to indicate when entries have been posted to the ledger accounts.
What is the second step in the posting procedure?The second step in the posting procedure is to write the transaction information from the journal in each relevant account ledger. The account ledgers allow you to see every transaction in a given account on its own dedicated sheet.
What is the last step in the posting procedure?The Posting Reference is always recorded in the journal as the last step in the posting procedure!
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