How to post to the general ledger
/What is Posting in Accounting?
Posting in accounting is when the balances in subledgers and the general journal are shifted into the general ledger. Posting only transfers the total balance in a subledger into the general ledger, not the individual transactions in the subledger. An accounting manager may elect to engage in posting relatively infrequently, such as once a month, or perhaps as frequently as once a day.
What is the General Ledger?
A general ledger is the master set of accounts that summarize all transactions occurring within an entity. There may be a subsidiary set of ledgers that summarize into the general ledger. The general ledger, in turn, is used to aggregate information into the financial statements of a business.
Posting to the General Ledger
Posting to the general ledger involves recording detailed accounting transactions in the general ledger. It involves aggregating financial transactions from where they are stored in specialized ledgers and transferring the information into the general ledger. Initially, transactions that are completed in volume are usually recorded in a specialty ledger, such as the sales ledger. Doing so keeps the general ledger from being awash in the detail for thousands of transactions. The information in the general ledger is then aggregated into a set of financial statements for each reporting period.
Information in one of the specialty ledgers is aggregated at regular intervals, at which point a summary-level entry is made and posted in the general ledger. In a manual bookkeeping environment, the aggregation may occur at fixed intervals, such as once a day or once a month. For example, if the source ledger were the sales ledger, the aggregated posting entry might include a debit to the accounts receivable account, and credits to the sales account and various sales tax liability accounts. When posting this entry in the general ledger, a notation could be made in the description field, stating the date range to which the entry applies. This is useful for providing additional clarity to a user of the general ledger who might be researching certain transactions.
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Posting in a Computerized Environment
In a computerized bookkeeping environment, posting to the general ledger may be unnoticeable. The software simply does so at regular intervals, or asks if you want to post, and then handles the underlying general ledger posting automatically. It is possible that no posting transaction even appears in the reports generated by the system.
Posting Low-Volume Transactions
Posting to the general ledger does not occur for lower-volume transactions, which are already recorded in the general ledger. For example, fixed asset purchases may be so infrequent that there is no need for a specialty ledger to house these transactions, so they are instead recorded directly in the general ledger.
How to Research Accounting Transactions
If anyone wants to research a detailed transaction, they typically start with one of the financial statements, drill down to the relevant account in the general ledger, and then reference the specialty ledger that contains detailed information about the transaction in question.