Financial Accounting

Example of ledger postings

As we know that after the entries have been journalized, the next process is to transfer these entries to respective Ledger accounts. This process of transferring the entries from the General Journal to the Ledger is known ‘Posting’.

Under this process, various debit and credit transactions are posted to the ledger and at the end of a certain period, this debit and credit balanced is compared. Following is an example which will make clear how posting to the ledger is done:

Illustration

Post the-the following transactions in the books of a trader:-

Debit Balance on January 1, 2013

Cash in Hand $ 8,000, Cash at Bank $ 25,000, Stock of Goods $ 20,000, Building

$ 10,000. Sundry Debtors: Victor $ 2,000 and Rita $ 2,000.

Credit Balances on January 1, 2013:

Sundry Creditors: Albert $ 5,000. Capital $ 55,000

Following were further transactions in the month of January 2013:

Jan. 1               Purchased goods worth $ 5,000 for cashless 20% trade discount and 5% cash discount.

Jan. 4                 Received $ 1,980 from Victor and allowed him $ 20 as discount.

Jan. 8               Purchased plant from Michael for $ 5,000 and paid $ 100 as cartage for bringing the plant to the factory and another $ 200 as installation charges.

Jan. 12               Sold goods to Robert on credit $ 600.

Jan. 15               Robert became insolvent and could pay only 50 cent in a $.

Jan. 18              Sold goods to Steve for cash $ 1,000.

Solution

Cash A/c

Dr.      Cr.
Date

 

2013

ParticularJ.F.$Date

 

2013

ParticularJ.F.$
 Jan 1To Balance b/d 8000 Jan 1By Purchase A/c 3800
Jan 4To Victor 1980 Jan 8By Plant A/c 300
Jan 15To Robert 300 Jan 31 By balance c/d 7180
Jan 18To Sales A/c 1000    
   11280   11280
Feb 1To balance b/d 7180    

Bank A/c

Dr.      Cr.
DateParticularJ.F.$DateParticularJ.F.$ 
 Jan 1To balance b/d  25000Jan 31By Balance c/d 25000 
   25000   25000 
Feb 1To balance b/d 25000     
            

Stock A/c

DateParticularJ.F.$DateParticularJ.F.$
 Jan 1To balance b/d  20000 Jan 31By balance c/d 20000
   20000   20000
 Feb 1To Balance b/d 20000    

Building A/c

DateParticularJ.F.$DateParticularJ.F.$
 Jan 1To Balance b/d 10000 Jan 31By Balance c/d  10000
   10000    10000
 Feb 1To Balance b/d  10000    

Victor A/c

DateParticularJ.F.$DateParticularJ.F.$
 Jan 1To balance b/d  2000 Jan 4By cash A/c 1980
     By Discount A/c 20
    2000   2000

Rita A/c

DateParticularJ.F.$DateParticularJ.F.$
 Jan 1To Balance b/d  2000 Jan 31By Balance c/d 2000
   2000   2000
Feb 1To Balance b/d 2000    

Albert’s A/c

DateParticularJ.F.$DateParticularJ.F.$
 Jan 31To balance c/d  5000 Jan 1By Balance b/d 5000
   5000   5000
     Feb 1By Balance b/d 5000

Capital A/c

DateParticularJ.F.$DateParticularJ.F.$
 Jan 31To balance c/d 55000 Jan 1By Balance b/d  55000
    55000    55000
     Feb 1By Balance b/d 55000

Purchase A/c

DateParticularJ.F.$DateParticularJ.F.$
 Jan 1To cash A/c  3800 Jan 31By balance c/d  4000
 To Discount A/c 200    
    4000    4000
Feb 1To balance b/d 4000    

Discount A/c

DateParticularJ.F.$DateParticularJ.F.$
 Jan 4To Victor 20 Jan 1By Purchases A/c 200
Jan 31To balance c/d 180    
    200   200
    Feb 1By Balance b/d 180

Plant A/c

DateParticularJ.F.$DateParticularJ.F.$
 Jan 8To Michael A/c 5000Jan 31By Balance c/d 5300
 Jan 8To Cash A/c 300    
   5300    5300
Feb 1To Balance b/d 5300    

Michael

DateParticularJ.F.$DateParticularJ.F.$
 Jan 31To balance c/d 5000 Jan 8By plant A/c 5000
    5000   5000
     Feb 1By balance b/d 5000

Sales A/c

DateParticularJ.F.$DateParticularJ.F.$
 Jan 31To balance c/d 1600 Jan 12By Robert 600
     Jan 18By Cash 1000
    1600   1600
    Feb 1By Balance b/d 1600

Robert’s A/c

DateParticularJ.F.$DateParticularJ.F.$
 Jan 12To Sales A/c 600 Jan 15By Cash A/c 300
    Jan 15By Bad Debts A/c 300
    600   600

Bad Debts A/c

DateParticularJ.F.$DateParticularJ.F.$
 Jan 15To Robert 300Jan 31By Balance c/d 300
    300    300
 Feb 1To balance b/d 300    

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