Entering Accounting Data in the General Ledger: Posting:

Once events are recorded in the general journal, the effects on the accounts are organized in one place called the general ledger. Data from the general journal are transferred to the general ledger through a very simple process called posting. When data from a journal entry are posted to the general ledger, that data simply updates the appropriate general ledger accounts. For example, recall the October 3 entry in which cash was debited for $1,300 and accounts receivable was credited for $1,300. This entry would be posted to the general ledger by entering a $1,300 debit to the general ledger cash account and entering a $1,300 credit to the accounts receivable account. As an example of information contained in a general ledger, the cash page from the Guitar Lessons Corporation's general ledger is shown below.
 

Guitar Lessons Corporation
General Ledger 

Account Name: Cash 

Account Number: 111 

Date 

Item 

Post.
Ref. 

Debits 

Credits 

Balance
Debits 

Balance
Credits 

Oct. 1 

Balance

 

 

 

9,120 

 

Receivable collection 

J1 

1,300 

 

10,420 

 

13 

Services provided 

J1 

1,100 

 

11,520 

 

19 

Payable payment 

J1 

 

550 

10,970 

 

26 

Dividend payment 

J1 

 

90 

10,880 

 

31 

October wages 

J1 

 

600 

10,280 

 

Note the October 3 $1,300 debit to cash in the general ledger cash page above. The $1,300 was posted (transferred) from the October 3 general journal entry to the cash page in the general ledger. In a similar manner, all other debits and credits from the general journal would be posted to the general ledger, updating all the general ledger accounts. As a result of the posting process, all the events that affected the Guitar Lessons Corporation's accounts are summarized in one place, the company's general ledger. In simplified T account form, the Guitar Lesson Corporation's general ledger, after all October journal entries were posted, is shown below.

Guitar Lessons Corporation
General Ledger
October 31

 

Cash

 

Accounts Receivable

 

Supplies

$9,120

 

 

$1,300

 

 

$575

 

$1,300

$550

 

$1,200

$1,300

 

$400

$450

$1,100

$90

 

$1,200

 

 

$525

 

 

$600

 

 

 

 

 

 

$10,280

 

 

 

 

 

 

 


 

Accounts Payable

 

Common Stock 

 

Retained Earnings 

 

$550

 

 

$7,000

 

 

$3,445

$550

$400

 

 

$7,000

 

 

$3,445

 

$400

 

 

 

 

 

 


 

Dividends

 

Fees Revenue 

 

Supplies Expense 

 

 

 

 

 

 

 

 

$90

 

 

 

$1,100

 

$450

 

$90

 

 

 

$1,200

 

$450

 

 

 

 

 

$2,300

 

 

 


 

Wages Expense 

 

 

 

 

 

 

 

 

 

 

 

 

$600

 

 

 

 

 

 

 

$600

 

 

 

 

 

 

 

Note in the above general ledger that the balance in each T account was calculated as the difference between the total debits and total credits. For example, the $525 debit balance in supplies was calculated by adding the two debits ($575 + $400) and subtracting the one credit ($450).
 

** You now have the background to do text exercises 3.3 and 3.4.

 

 

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