POSTING

The process of transferring the debit and credit from the general journal to the proper ledger accounts is called posting the debit column of the journal is posted by entering it on the debit side of an account listed in the credit column of the journal is posted to the credit side of a ledger account.The posting may very some what with the preferences of the individual.The following sequence is commonly used.

1- Locate in the ledger first account named in the journal entry.
2- Enter in the debit column of the ledger account the amount of the debt as shown in the journal.
3- Enter the date of the transaction in the ledger account.
4- Enter in the reference column of the ledger accounts the number of the journal page from which the entry is being posted.
5-The recording of the debit in the ledger account.

GENERAL JOURNAL ENTRY

The information about each business transaction is initally recorded in an accounting record called the journal After the transaction has been recorded in the journal the debit and credit changes in the individual accounts are entered in the ledger the journal is the accounting record in which transaction are first recorded it is called the book of original entry.The journal is a chronological day by day record of business transaction the information record about each transaction includes the date of the transaction the debit and credit changes in specific ledger accounts of the transaction.

ILLUSTRATION:

The pervaz started his business with cash Rs.75000 in the name of pervaz&sons

purchase merchandise on cash Rs.22000,paid shop rent for two month Rs.4500 P.M,purchase furniture on cash Rs.3500,sold merchandise on cash Rs.3000,purchase merchandise on credit from hamid&sons Rs.11750, cash deposited into bank Rs.20000

Required :prepare a General journal entries.

DOUBLE ENTRY ACCOUNTING

The rules for debit and credit are design so that every transaction is recorded by equal dollar amount of debit and credit the reason for this equality lies in the relationship of the debit and credit rules to accounting equation.

ASSETS=LIABILITIES+OWNER EQUITY

According to the debit and credit rules that we have just described,increases in the left side of the assets equation are recorded by debits while increase in the right side liabilities and owner equity are recorded by credit.

This system is often called double entry accounting the phrase double entry refers to the need for both debit entries and credit entries equal amount to record every transaction.

DEBIT AND CREDIT ENTRIES

AN amount recorded on the left or debit side of an amount is a debit side or a debit entry an amount entered on the right or credit entry .
the act of recording a debit in an account the recording of a credit is called crediting account.
Accountant use debit to mean an entry on the left hand side of an account and credit to mean an entry on the right hand side  debit and credit simply mean left and right with out any hidden implications.

USES OF LEDGER

A ledger account is a means of accumulating in one place all the information about changes in a specific assets a liabilities or owner equity. for example A ledger account for the assets cash provides a record of the amount of cash receipts, cash payments and the current cash balance . BY maintain a cash account management can keep track of the amount of cash available for meetings payroll and for making current purchases of assets or service this record of cash is also useful in planning future operations and in advance planning of applications for bank loans . Its simplest from an account has on;y three elements a little consisting of the name of the particular assets liabilities or owner equity. A left side which is called the debit side and a right side which is called the credit side this form of account is called a T-account.

LEDGER

An accounting system includes a separate record for each item that appear in the balance sheet.
A separate record is kept for the assets cash showing all the increase and decrease in cash which result from the many transaction in which cash is received or paid .A similar record is kept for every other assets for every liabilities and for owner equity
the form of record used to increase and decreases in a single balance sheet item is called an account .
some ledger account all these separate accounts are usually kept in a loose leaf binder and the entire group of accounts is called a ledger.
many business use computer for maintaining accounting records they store data on magnetic disc rather then in ledger an understanding of accounting concepts mostly easily acquired by study of a manual accounting system.
The knowledge gained by working with manually accounting records is readily transferable to any type of automated accounting system.
Ledger accounts in our study of basic accounting concept these written records continue to be used by a great many business our purpose they should be viewed as conceptual devices rather than as physical components of an accounting system.

ACCOUNTING AND BOOK KEEPING

Accounting may fail to understand the distinction between accounting and book keeping .
book keeping refers to the daily operation of an accounting system that is recording and classifying routine transaction.
Book keeping is a skill that an individual might acquire with in a few week or month .Most book keeping function can be performed most efficieently.through the use of a computer.

A professional accountant must have a far broader range of knowledge and skill then a book keeper Accountant need an under standing of financial reporting requirments income tax regulations and the regulatory requirements affecting specific industries .
they should be able to design accounting system of internal control interper and record complex transaction and assist manager in interpreting all type of accounting information s.
Accounting is more than a skill it is a profession ,exprience and a commit ment to continually updating and expanding one knowledge.