What is Ledger Posting? Your Ultimate Guide

Ledgers are accounting’s filing cabinets – they organize journal entries into individual accounts to track balances. Without proper ledger posting, you can’t prepare financial statements. Let’s simplify this step-by-step!

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Why Ledgers Rule Accounting

The 3 Superpowers of Ledgers:

1. Balance Tracking
   • Know exact cash/debtor/creditor balances anytime
2. Financial Statement Foundation
   • Trial balances → Profit & Loss → Balance Sheet
3. Error Detection
   • Spot journal mistakes when Dr/Cr don’t match

📌 Real-Life Analogy:
Journal = Raw interview notes
Ledger = Organized employee file with all details

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Ledger Format Decoded (T-Account)

Every ledger has two sides – Debit (Left) and Credit (Right). Here’s what each column means:

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┌──────────────────────┬──────────────────────┐  
│   **Dr. (Left)**    │   **Cr. (Right)**    │  
├──────┬───────┬───┬───┼──────┬───────┬───┬───┤  
│ Date │ Part. │JF │Amt│ Date │ Part. │JF │Amt│  
└──────┴───────┴───┴───┴──────┴───────┴───┴───┘  

• Date: Transaction date
• Particulars: Opposite account name
• JF: Journal Folio (Page number)
• Amt: Transaction amount

🔥 Critical Conventions:

• DR Side: Write “To [Account Name]”
• CR Side: Write “By [Account Name]”

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Step-by-Step Ledger Posting (With Live Example)

📝 Journal Entry (1 Jan):

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Cash A/c        Dr. 1,00,000  
  To Sales A/c          1,00,000  
(Goods sold for cash)  

✅ Step 1: Identify Affected Accounts

• Cash A/c (Real Account – Debited)
• Sales A/c (Nominal Account – Credited)

✅ Step 2: Post to Cash Account (Debit Side)

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┌──────────────────────────────────────────┐  
│             **Cash Account**             │  
├──────┬────────────────┬───┬──────────────┤  
│ Date │ Particulars    │JF │   Amount     │  
├──────┼────────────────┼───┼──────────────┤  
│1/1/24│ To Sales A/c   │ 5 │  1,00,000   │  
└──────┴────────────────┴───┴──────────────┘  

Why “To”? Cash is receiving (Dr.), Sales is giving benefit.

✅ Step 3: Post to Sales Account (Credit Side)

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┌──────────────────────────────────────────┐  
│             **Sales Account**            │  
├──────┬────────────────┬───┬──────────────┤  
│ Date │ Particulars    │JF │   Amount     │  
├──────┼────────────────┼───┼──────────────┤  
│      │                │   │              │  
├──────┼────────────────┼───┼──────────────┤  
│      │ By Cash A/c    │ 5 │  1,00,000   │  
└──────┴────────────────┴───┴──────────────┘  

Why “By”? Sales is giving income (Cr.), Cash is the source.

Golden Rules for Error-Free Posting

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1. DR Entry = LEFT SIDE
   • Always write “To [Account]” in Particulars
2. CR Entry = RIGHT SIDE
   • Always write “By [Account]” in Particulars
3. Cross-Verify
   • Total Dr. entries = Total Cr. entries for each transaction

💡 Pro Tip: Circle “To” and “By” in different colors during exams!

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Practice Questions (With Templates)

Q1. Journal Entry:

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Rent A/c     Dr. 25,000  
  To Cash A/c       25,000  
(Paid office rent)  

Your Task:

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┌──────────────────────────────────────────┐  
│             **Rent Account**             │  
├──────┬────────────────┬───┬──────────────┤  
│ Date │ Particulars    │JF │   Amount     │  
├──────┼────────────────┼───┼──────────────┤  
│______│________________│___│____________│  
└──────┴────────────────┴───┴──────────────┘  

Q2. Journal Entry:

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Mohan's A/c   Dr. 60,000  
  To Sales A/c       60,000  
(Credit sale to Mohan)  

Your Task:

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┌──────────────────────────────────────────┐  
│           **Mohan's Account**            │  
├──────┬────────────────┬───┬──────────────┤  
│ Date │ Particulars    │JF │   Amount     │  
├──────┼────────────────┼───┼──────────────┤  
│______│________________│___│____________│  
└──────┴────────────────┴───┴──────────────┘  

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Solutions to Practice Questions

Q1 Solution:

Rent A/c (Dr. Side):

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├──────┼────────────────┼───┼──────────────┤  
│[Date]│ To Cash A/c    │[JF]│   25,000    │  

Cash A/c (Cr. Side):

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├──────┼────────────────┼───┼──────────────┤  
│      │ By Rent A/c    │[JF]│   25,000    │  

Q2 Solution:

Mohan’s A/c (Dr. Side):

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├──────┼────────────────┼───┼──────────────┤  
│[Date]│ To Sales A/c   │[JF]│   60,000    │  

Sales A/c (Cr. Side):

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├──────┼────────────────┼───┼──────────────┤  
│      │ By Mohan's A/c │[JF]│   60,000    │  

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5 Exam-Critical Checks

1. ☑️ “To” only on DR side
2. ☑️ “By” only on CR side
3. ☑️ JF numbers match journal
4. ☑️ Dates identical to journal
5. ☑️ Dr. total = Cr. total