Recording Transactions

Posting from Journal and Cash Book

During the preparation of accounts, an accountant is required to post various entries from various journals and cash books to the ledger accounts. Let us take a look at the process of posting such journal entries from the books of accounts in various ledgers.

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Journal and Ledger

Posting from Journal and Cash Book

A Journal is simply a chronological record of all the business transactions that take place in an organization. However, if we want to know the net effect of various transactions that affect an item, we need to go through the entire journal, which takes a lot of time.

A Ledger is a book which contains a summarized and classified form of complete record of all transactions. Since it contains complete information about various transactions, it is called the ‘Principal Book’.

Browse more Topics under Recording Transactions

Is the Cask Book also a Journal?

A cash book plays the role as a book of original entry, as well as a ledger. The cash book is a subsidiary book because all cash transactions are firstly recorded in the cash book and then after recording them there, they are posted to various accounts in the ledger. The recording of transactions in the cash book takes the shape of a ledger account.

As receipts of cash are entered on the debit side and cash payments on the credit side, there is no need of cash account in the ledger books of a firm. Thus Cash Book serves the purpose of ledger account as well as a journal.

Posting from Journal to Ledger

Final accounts of a business are prepared on the basis of the ledger. The following is a format of a ledger account:


Dr.                                                                                                                                                 Cr.

Date Particulars JF Amount Date Particulars JF Amount

Posting into a ledger is made from the journal entries which are passed in the journal. It is important to mention that every journal entry will have to be posted to all accounts which have been debited and credited in the journal entry.

For example, for goods purchased for cash, Purchases Account is debited and Cash Account is credited. While posting this entry into the ledger, it will be posted both in Purchase Account as well as in Cash Account. All real accounts relate to assets, hence, show the debit balance only. The balance in nominal accounts indicates profit and loss. The balance in nominal accounts is transferred to Profit and Loss Account.

Let us take the example of the following journal entries to illustrate how the posting process is accomplished:

  • Introduction of cash, Rs 50,000 in the business of Mr. A:

Cash A/c – Dr.             50,000

To Capital A/c             50,000

  • Purchase of furniture for Rs 10,000

Furniture A/c – Dr.                  10,000

To Cash A/c                             10,000

These entries shall be displayed in their respective accounts as follows:

Cash A/c

Date Particulars JF Amount Date Particulars JF Amount
XX To Capital 50,000  By Furniture  10,000

Capital A/c

Date Particulars JF Amount Date Particulars JF Amount
XX  By Cash  50,000

Furniture A/c

Date Particulars JF Amount Date Particulars JF Amount
XX To Cash 10,000

Solved Question for You

Q: Post the following transactions in Purchases account.

Bought goods from Mr. A on credit for INR 65,000

Purchased computer and printer for INR 70,000 for office use

Answer – The accounts will be as follows

Purchases A/c

Dr.                                                                                                                                        Cr.

Date Particulars JF Amount Date Particulars JF Amount
XX To Mr. A A/c 65,000

The second effect of the entry will be recording it on the credit side of Mr. A’s account.

As for the second entry, it will not be recorded in purchases account.

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