Track 2 · Recording and posting
Posting to the ledger and T-accounts
Post journal entries to ledger accounts, use T-accounts to visualise them, and compute running balances.
You will be able to
- Post entries from the journal to ledger accounts.
- Use T-accounts and running balances to compute account balances.
- Interpret a balance on the unusual side.
Builds on
The journal records transactions in date order. The general ledger reorganises the same information by account, so you can see each account's history and balance. Nothing new is recorded when you post: each journal line is copied, unchanged, to the account it names.
Posting copies each journal line to its account: debits to the debit side, credits to the credit side, with the date, a short description and a posting reference — the journal page or entry number. The journal records the ledger reference in return, so anyone can trace an amount from the statements back to the ledger, to the journal and to the source document. That two-way trail is what makes errors findable. In accounting software, posting happens the moment an entry is saved, but the trail is the same.
A T-account is the classroom picture of a ledger account — a T with debits on the left and credits on the right. Real ledgers usually use the running-balance format instead: Debit, Credit and Balance columns, with the balance updated after every line.
The balance is the difference between the two sides, shown on the bigger side: - Assets, expenses and dividends normally have debit balances. - Liabilities, equity and revenue normally have credit balances. - Contra accounts take the opposite side of the account they reduce: accumulated depreciation is a credit; sales returns are a debit.
At the end of a period each account's closing balance is carried down as the opening balance of the next period for balance-sheet accounts. Forgetting the opening balance is the most common slip when computing a ledger balance.
A balance on the unusual side isn't automatically wrong, but it always needs an explanation. A credit balance on Cash at bank means an overdraft; a credit balance on a customer's receivable usually means they overpaid; a debit on Accounts payable may be a payment made twice. Investigate before you report.
| Date | Description | Ref | Debit | Credit | Balance |
|---|---|---|---|---|---|
| 07/01 | Balance brought down | b/d | 9,240 | 9,240 Dr | |
| 07/01 | Receipt from customer, invoice C-212 | J14 | 1,150 | 10,390 Dr | |
| 07/02 | July rent | J14 | 1,500 | 8,890 Dr | |
| 07/04 | Cash sales of parts | J15 | 620 | 9,510 Dr | |
| 07/05 | Payment to Spokewell Supplies | J15 | 2,310 | 7,200 Dr |
The closing balance of 7,200 is carried down as the opening balance for the next week. In T-account form: debits 11,010 on the left, credits 3,810 on the right, balance 7,200 debit.
Interactive
Post entries and watch the T-accounts
Post entries one at a time and follow each account's balance.
Last posted: Opening cash
Balance: 6,000 Dr
Balance: 2,400 Dr
Balance: 0
Balance: 0
Balance: 0
Balance: 2,400 Cr
Practice
Practising as a guest — attempts aren't saved.
Exercise 1 · Sequence
Put the steps of recording a credit sale in the order they happen, from the business event to the trial balance.
Exercise 2 · Calculate
Lumen's Cash at bank account opened May with a debit balance of 27,100. Its May postings are summarised below. What is the closing balance at 31 May?
Exercise 3 · Calculate
Lumen's Accounts payable opened May with a credit balance of 5,800. In May it received supplier invoices of 3,150 and 240, and posted debits of 720, 460, 2,000, 1,440, 1,000, 180 (five cheques to suppliers, one of them keyed as 460 instead of 640 and corrected with a 180 debit on 31 May). What is the closing credit balance?
Exercise 4 · Worksheet
Complete the running balance of Lumen's Accounts receivable for June's transactions. The account opened June with a debit balance of 8,150: Brightwater's 3,000, Pepper & Sage's 300 (its cheque bounced), Fable & Fern's 3,200 and Marsh Lane's 1,650.
Exercise 5 · Concept check
After posting, Cash at bank shows a credit balance of 300. What does that mean?
Exercise 6 · Classify
After posting, which balances are normal and which need investigating?
Exercise 7 · Calculate
Thistle Bakery's Accounts payable opened April with a credit balance of 1,720 and closed it with a credit balance of 2,240. Supplier invoices posted in April totalled 3,900. How much did Thistle pay suppliers in April?
Exercise 8 · Worksheet
Challenge: post Lumen's June transactions (listed below; the 30 June adjustments come later) to five accounts and find each balance before adjustments. Opening balances are Lumen's 31 May balances after May was closed — so Service revenue starts June at zero. Enter each balance as a positive amount on the account's normal side.
Key points
- The journal is in date order; the ledger is organised by account. Posting copies each line with a reference both ways.
- Balance = debits − credits, shown on the larger side, starting from the opening balance carried down.
- Know the normal side of every account, including contra accounts.
- A balance on the unusual side — an overdraft, a customer in credit — needs explaining before you rely on it.
Content review: answers and figures are checked by automated tests against the accounting engine, and the text has had an internal review against the standards; independent review by a qualified accountant is pending.