You must record every transaction in business as each of them holds great significance. Follow a systematic process while you record the transaction. Accounting is a process of steps taken carefully to record business transactions. Here, we identify ledger is posting from journal entries homework answers.
The first step of accounting is journal entries. You start off with journal entry and proceed further to subsequent ledger posting, income statement and balance sheet. Journal entry runs through an exhaustive list of business transactions. Each line of journal entry is incomplete without date, description and the amount of transaction.
Classification of accounts:
Journal entries are broadly categorized into the following accounts
Sub-categories of the heads do exist to simplify the process of ledger posting from journal entries homework answers.
Debit and credit are classic examples of equal and opposite entries which balance out the entire transaction giving clarity to the process. Debit and credit associated with journal entries have different impact on each of these account heads. The below table reveals the various impact the journal entry of debit and credit has on account heads.
Letâ€™s elucidate our statement with the help of an example:
We have formulated a typical journal entry in a tabulated form to understand the process of ledger posting from journal entries homework answers.
|6/17||Cash||Deposited money into bank||20000|
|6/26||Expense||Paid rentals for business||1500|
We get the following after breaking down each journal entry
Journal entries are simple basic entries that follow certain rules to pave the way for little more complicated ledger postings. Ledger postings ensure you get all the detail of an account at one glance at these postings instead of searching through various journal entries. Itâ€™s difficult in a business to go through all journal entries to make a connection with all transaction done for one particular account. This leads to the necessity of the requirement for ledger posting.
How to post journal entries to ledger?
You can either use an accounting software or ERP for posting ledger accounts or do those manually using Excel spreadsheet. Before the advent of digitization, junior accountant of a firm used to do these calculations using pen and paper.
To differentiate ledger posting from journal entries homework answers, we tabulate the ledger postings as well.
This is how a T-ledger looks like.
Significance of ledger postings
Ledger posting from journal entries homework answers how a robust audit process relies more on ledger postings before moving ahead to income statement and balance sheet.