Chapter 4
The Accounting Cycle: Journals and Ledgers
88
Account: Cash
gl no. 101
date
description
Pr dr Cr
Balance
________________
FIgure 4.9
Each entry in the journal must be posted to the appropriate ledger account. To maintain up-to-
date records, posting to the ledger accounts should be completed regularly, whether daily, weekly
or monthly. The posting of the first journal entry to the general ledger is completed in Figure
4.10.The cash account has an opening balance of $3,000.
JournAl
PAge 1
date
2016
Account Titles and explanation
Pr debit
Credit
Jan 2 Cash
101
1,500
Service revenue
400
1,500
Completed work for client
Account: Cash
gl no. 101
date
description
Pr
dr
Cr
Balance
2016
Jan 1 Opening Balance
3,000 Dr
Jan 2
J1
1,500
4,500 Dr
6
3
5
2
1
4
Account: service revenue
gl. no. 400
date
description
Pr dr Cr Balance
2016
Jan 2
J1
1,500 1,500 Cr
________________
FIgure 4.10
7
There are a number of steps to complete when posting items from the journal to the general ledger.
1
Transfer the date of the transaction.
2
The description in the ledger does not have to be completed for every transaction, provided
you have a description already recorded in the journal.
3
Transfer the page number of the journal to the posting reference column in the ledger.
4
Enter the transaction amount into the appropriate debit or credit column.
5
Calculate the new account balance (i.e. the ending, or closing balance). Increase and decrease
the previous balance according to the debit and credit rules in Figure 4.1.
