After journal entries are made, the next step in the transaction amounts in the proper accounts found in
accounting cycle is to post the journal entries into the the company's general ledger.
ledger. Explanation
Posting refers to the process of transferring entries in
An accounting ledger can be a book or database of
the journal into the accounts in the ledger. Posting to accounts. The term general ledger refers to the book or
the ledger is the classifying phase of accounting. database containing assets, liabilities, owner's equity,
revenues and expenses. Subsidiary ledgers can be used
to hold specific subgroups, such as assets, which then
An accounting ledger refers to a book that consists of roll up to the general ledger.
all accounts used by the company, the debits and
As part of the accounting cycle, journal entries are
credits under each account, and the resulting balances.
posted to the company's general ledger. This process
While the journal is referred to as Books of Original involves recording in the proper ledger account the
Entry, the ledger is known as Books of Final Entry. dollar value associated with each transaction's debit
and credit.
The Posting Process Once a debit or credit is posted to the general ledger, a
reference number is recorded alongside, or assigned to,
the corresponding journal entry. This process provides
Definition the accounting department with a tracking mechanism
The financial accounting term posting to the ledger to ensure all journal entries are eventually posted to the
refers to the process of analyzing the credits and debits company's general ledger.
appearing in journal entries, and recording those
2. Fill in all the account titles and record their
Preparing a Trial Balance for Your Business
balances in the appropriate debit or credit columns.
The first step toward interpreting the financial results of 3. Total the debit and credit columns.
your business is preparing a trial
4. Compare the column totals.
balance report. Basically, a trial balance is a worksheet
prepared manually or spit out by your computer
accounting system that lists all the accounts in your
General Ledger at the end of an accounting period
A successful trial balance is no guarantee that your
(whether that’s at the end of a month, the end of a
books are totally free of errors; it just means that all
quarter, or the end of a year).
your transactions have been entered in balance. You
still may have errors in the books related to how you
If you’ve been entering transactions manually, you
entered your transactions, including:
create a trial balance by listing all the accounts with
their ending debit or credit balances. Then, you total
the debit and credit columns. If the totals at the bottom
You forgot to put a transaction in a journal or in
of the two columns are the same, the trial is a success,
the General Ledger.
and your books are in balance.
You forgot to post a journal entry to the
General Ledger.
The four basic steps to developing a trial balance are:
You posted a journal entry twice in either the
General Ledger or in the journal itself.
1. Prepare a worksheet with three columns. You posted the wrong amount.
One column is for account titles, another is for debits, You posted a transaction to the wrong account
and the other is for credits.
