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Posting can be said as the second step of the accounting process. Posting is mainly done to keep the records classified, giving easy access to any accounts’ ledgers. Firstly, the transactions are done in the general business journals and subsidiary books. After which, they are transferred to ledgers. The transfer from books to ledgers is posted. There are several types of subsidiary books, though. Posting from every book and journal implies different rules. However, everything is solved for you; all general information about all the transactions is given below.
Posting from Journal and Subsidiary Books: Overview
Firstly, posting is the process of entries from different business books, also known as ‘Subsidiary Books’ and ‘Journals’, to the primary ledger or business. Every entry and transaction of business is first analysed and recorded in business journals and subsidiary books as per its effect. This is known as journalizing, after which the process is carried out to make or fill the ledgers of every single entry recorded in one book or device to their corresponding accounts, respectively. Posting is done mainly for keeping business accounts handy and as a double safety of records.
Journal
Journal of general Journal is termed as the first-entry book in business, and every transaction is firstly recorded in this book. One has just to determine the effect of the transaction (Debit or Credit) on any of the involved accounts to do entries in the journal.
Subsidiary books
The meaning of subsidiary books can be defined as ‘special journals’. As the term refers, subsidiary books are special journals that record similar types of entries, such as all purchase entries and entries of all receivables. Subsidiary books are also known as day books.
Types of subsidiary books
There are mainly seven types of ‘Subsidiary Books’ or ‘Special Journals’.
Cashbook – Records cash transactions
Purchase Book – Records purchase transactions
Purchase return book – Records Purchase return transactions
Sales Book – Records sales transaction
Sales return book – Records sales return transaction
Bills payable book- liabilities outstanding
Bills receivable book- dues to be received from others
Posting from Journal Entries
As discussed before, all transactions are recorded in the form of entries in the journal. These entries are further classified, calculated and then a total of every account in order to make Trial Balance and balance sheets’. Before trial balance, it can get messy and complicated to search and classify accounts of each individual. Though, first, every general entry is transferred to an individual’s ledger in a specific book. The effect of the transaction is also kept in mind during the transfer. The first record in the journal is ‘recording’. After it, the process of putting it from a journal to a ledger book is ‘Posting’ or say from the journal.
Posting from Subsidiary Books
As there are seven types of subsidiary books, let’s see the posting from each.
Cash Book – Cash Book has two sections, Receipt and Payment. All accounts of the receipt section of books should be recorded as credit by putting ‘By (medium)’ in the ledger. Mostly, the medium of transactions is cash or bank. Conversely, all payment side records should be debited with cash or bank. Though, posting from the cash book is done.
[Note: posting personal accounts has additional recordings such as bad debts, discounts allowed/received, etc.]
Purchase Book- The total of each sundry creditor of nominal accounts should be first debited on the purchase ledger. Posting is done by writing the totals and writing the ‘To ‘XYZ’ as per the purchase book’. Similarly, the personal accounts of the ledger are credited with writing ‘By Purchase A/c’ during posting.
Purchase Return Books- The entries of debit notes should be credited to the purchase account in the ledger. ‘By ‘XYZ’ as per the Purchases Return Book’ should be the sentence to post the entries. Personal entries in this book would be debited with their amounts to the purchase return account.
Sales Book- It should be credited in the sales account the credit of the total sale shown by the sales book in the posting. Again, personal accounts should be posted from other accounts, and personal accounts from the sales book would be debited in ledgers with respective amounts.
Sales Return Book- The entries of all credit notes should be first credited to the sales account in the ledger. ‘By ‘XYZ’ as per the sales Return Book’ should be the sentence to post the entries. Personal entries in this book would be credited with their amounts and debited to the sales return account.
Bills Receivables Book- These are the bills received from sundry debtors. Firstly, a bill receivables account should be debited with all these amounts during posting. Personal accounts here should be credited with the number of bills in their ledgers.
Bills Payables Book- the converse of receivables posting, these are the bills. They are credited to the bills payable account and debited to the sundry creditors’ book account. Generally, these are the bills that are given to sundry creditors. Personal accounts should be debited with the number of bills in their ledgers.
Conclusion
We learned how the business entries are posted from general entries or subsidiary books to ledgers this far. We can now say that the posting is the process of transferring the entries from different journals to one place for easy assessment. Postings of all subsidiary books follow different accounting rules. Moreover, we also concluded that the personal accounts are somewhat acting converse from nominal accounts during posting.
