Preparation of Trading Account

The balances in sub-ledgers are transferred into the general ledger during posting in accounting and not the transaction data in the sub-ledger. The process of exchanging recorded business occurrences from the general journal to the ledger is known as posting journal entries. In other words, following journalizing, posting is the next phase of the process.

Identifying events and analyzing them to see how they change the accounting equation is the first step in the accounting cycle. After occurrences have been identified, they can be recorded using a diary entry in the general journal. The effect of the transaction on the accounting question in the accounting system is recorded in these entries.

The transaction must be forwarded to the ledger accounts after it has been recorded. This is referred to as posting. All of the journal entries from the general journal are moved to the individual account ledgers in this section. The posting method is similar to tanking journal entries and moving them to T-accounts. This allows us to balance each account and maintain track of its balance throughout the day.

Example

If the accounting cycle didn’t involve the posting procedure, the general journal at the conclusion of the accounting period would just be a massive list of journal entries with no method to total what’s in each account. The journal is organized into account balances by posting.

The journal entry number is normally placed next to the entry in the T-account when each entry is posted to its ledger account. This creates an audit trail that can be used to trace all of the ledger entries back to the initial journal entries.

This procedure must be followed for each and every entry in the general journal. Trying to manually post every entry would, as you can guess, be a full-time task. As soon as an entry is made in the journal, modern computerized accounting systems conduct the posting procedure automatically.

Tabular System

Posting of entries in tabular form is called a tabular system. The transference of journal entries to just a general ledger, which normally has a separate class for each account, is known as posting. Journals keep track of transactions chronologically, whereas ledgers keep track of transactions by account.

Journal vs  Ledger: What’s the Difference?

All transactions are first documented in a journal, also known as the primary book of accounts, where all transactions are recorded in a progressive order. 

All ledger accounts are recorded in a ledger, often known as the chief book of accounts, where journal posting takes place.

Journal Entries and Journal Posting

Entries in a Journal

1. Journalizing refers to the act of documenting a financial occurrence in a diary; nonetheless, the entry published in the notebook is referred to as a “journal entry.” With the use of a double-entry bookkeeping system, it is a record of a transaction’s debit and credit aspects.
2. One of the most important distinctions between journal entry and journal posting is “time.” Journal entry comes after preparing vouchers and preceding journal posting.

Simple journal entries and complex journal entries are the two forms of journal entries.

Publishing in a Journal

1. Journal posting is the process of converting a journal entry into a ledger account. Transferring debits and credits from the journal book to the ledger accounts is part of this process.
2. After a journal entry, the next stage is journal posting, which comes before balancing the ledger.

Conclusion

The importance of ledger entries can be attributed to a number of factors. Entries in the ledger:

• Maintain your organization.
• Make transactions easy to find
• Separate transactions into categories.
• Make it possible for you to understand the overall picture of your company’s financial health.
• Show you income and expense patterns.

In addition to the benefits listed above, submitting entries to the general ledger aids in the detection of accounting errors in your records. Early detection of errors helps you avoid more serious issues later on, such as erroneous financial reports and tax filings. Maintaining an up-to-date ledger will help you avoid penalties and guarantee that your financial records provide you with an accurate view of your company’s finances.