Posting

(e Second Step)

It is the process of transferring the recorded transactions from the journal to the ledger.

Ledger

It is the systematic compilation of several accounts and used as a tool to classify the recorded
transactions for the purpose of getting the final balance of each account. It is also referred to as the
Book of Final Entry.

Account (or Ledger Account)

A device that summarizes the increases and decreases in a particular accounting element. e
simplest form (skeleton) of an account is the “T-account” because the appearance is like a capital
letter “T”.

Form of the Ledger Account

1. Standard (T-account) form - divided into two halves, each half containing four columns to
provide for the date, explanation, posting reference (F), and amount (debit for the le half and
credit for the right half). It is necessary to foot (get the column total) the debit and credit side of
the ledger to obtain the balance of a particular account.

• Sample of a standard (T-account) form:

Cash

Date Particulars F Debit Credit Date Particulars F Debit Credit

2. Running Balance (three-money column) or Bostonian form - this type of ledger allows the
bookkeeper to maintain a running balance of a particular account. If the balance of the account is
not the normal balance, the amount is indicated in parenthesis. Below is a sample:
 Date Explanation F Debit Credit Balance

3. Expanded Running Balance form - this is an expanded version of the Bostonian ledger account.
Here, the balance of the amount can be written either as debit or credit without the necessity of
writing the amount in parenthesis in case the balance is negative (opposite the normal balance).

• Sample of the Expanded Bostonian Ledger Account.

Balance
Date Explanation F Debit Credit
Debit Credit