Posting To The Ledger From The Day Books
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.
What you will need
- The ledger in all its parts—all the books or sheets that make up the complete ledger or at least the part you are concerned with, e.g. the purchase ledger.
- All the books of prime entry, or those you are concerned with, e.g. the purchase day book.
Posting from the purchase day book to the ledger
- 1.Turn to the start of the entries in the purchase day book as yet un-posted to the ledger. Your first job is to post each purchase invoice (gross) to the credit of the supplier concerned, in his personal ledger account. The personal ledger should have an index of supplier’s names, telling you on what page in the ledger you will find their account. (If no account exists, you will need to open one. Just head a new page with the supplier’s name, and remember to list it in the index.)
- 2.In the first (date) column, write the date of entry.
- 3.Write the name of the account to which the other side of the transaction will be posted, in column 2 (’particulars’).
- 4.In the fourth (cash) column record the gross value, in other words including VAT, of the transaction.
- 5.Now make the dual aspect of these postings: post the column totals for the net amount (i.e. net goods value) and VAT, to the debit of purchases and VAT accounts respectively. The procedure is the same as for posting the personal side of the transaction, following steps 1 to 4.
Posting from the purchase returns day book to the ledger
This is the reverse of posting from the purchase day book. This time you debit personal accounts in the bought ledger, and credit the VAT account and a purchase returns account in the nominal ledger.
Posting from the sales day book
This is just like posting from the purchase day book, except that you debit personal accounts in the sales ledger, and credit the VAT account and a sales account in the nominal ledger.
Posting from the sales returns day book
This is the reverse of posting from the sales day book: you credit personal accounts in the sales ledger, and debit the VAT account and a sales account in the nominal ledger.
1. Postings to the purchase ledger
Suppose that, as at the last day of April 200X, A. Frazer owed A. T. Office Supplies the sum of £380.00. On the 26 May the firm purchased further goods from A. T. Office Supplies for £620. On 28 May the firm paid its April statement by cheque. This is what the ledger postings would look like (and remember, they have to be recorded in the books of prime entry first).
2. Postings to the sales ledger
Suppose that K. Gange is a customer of A. Frazer, and at the close of last month (January 200X) his a/c balance stood at £2,100.00. Suppose that on 4 February Gange returned goods to the value of £100.00. On 6 February Gange purchased a further £1,000 worth of goods. On 12 February he paid his January a/c, after deducting the returned goods and a 2½% agreed discount for payment within 14 days. Gange then purchased a further £980.00 worth of goods on 18 February and then £220.00 worth of goods on 26 February. This is what the ledger postings would look like: