Posting To The Ledger From The Cash Book
Peter Marshall Bsc (Econ) BA MBIM is a Fellow of the Society of Business Teachers, and an experienced educator in business subjects. He is also a prolific author and his books have been translated and sold worldwide. He lives in London, UK.
The cash book entries are, by their very nature, one side of the double entry. All you have to do now is to make the other side of the entry:
Step by step
- 1.Every time you post in the cash book, make an opposite posting to the relevant personal account in the bought or sales ledger as appropriate. The narration against each of these postings will be ‘cash’ (if the payment was in the cash column of the cash book) or ‘bank’ (if it was in the bank column). Now you have to post any discounts from the discounts column. Remember, although the cash book is part of the ledger, this column does not have such status; it is a single entry element sitting inside a ledger division, while not exactly being part of it. So the postings from the discounts column must be twofold, just as for any other prime entry source.
- 2.Post the discounts to the correct personal accounts, making sure they are to the opposite sides to the ones on which they appear in the cash book.
- 3.Post the column totals to the other side of the ‘Discount allowed’ or ‘Discount received’ accounts in the nominal ledger as applicable, to complete your dual posting. Use the name of the account to which the dual posting has gone for this purpose in all ledger posting.
Posting from the petty cash book
The petty cash book may, or may not, be treated as part of the double entry system. If it is, as with the cash book, its entries will themselves already contain one side of the ledger posting; you have only to make the other. However, this one aspect of the dual entry is itself split into various postings to nominal ledger accounts and this is why analysis columns have been used. Their individual totals, together with the VAT column total, provide the figures to be posted to the various accounts denoted by their column headings. The net invoice total column is not posted anywhere.