Journal Entries
Ledger Posting
Transferring journal amounts to the general ledger.
Questions present simplified journal entries and ask for the correct ledger account, the resulting balance after posting, or the name of the process. The accounting cycle sequence is tested both in isolation and embedded in scenario-based questions.
What the exam tests
Definition-to-Term Identification
Identify 'Posting' as the specific act of transferring amounts from a journal to a ledger.
Ledger Classification
Distinguish between the General Ledger (master record of all account balances) and Subsidiary Ledgers (detailed records that roll up into the General Ledger).
Account Categorization
Identify which category a specific ledger item belongs to: Asset, Liability, Owner's Equity, Revenue, or Expense.
Process Sequencing
Demonstrate knowledge of the accounting cycle: transactions are recorded in a Journal first, then posted to the Ledger.
Structural Recognition
Key rules
- ›Journal: chronological record of every transaction (the 'book of original entry').
- ›General Ledger: master record organized by account: each account has its own running balance.
- ›Subsidiary Ledger: detailed breakdown of one General Ledger account (e.g., individual customer balances within A/R).
- ›Subsidiary Ledger totals must always equal the corresponding General Ledger control account balance.
Common traps
- !Confusing the Journal (chronological) with the Ledger (account-organized).
Accounting Cycle Sequencing
Key rules
- ›Correct order: Source Document → Journal Entry → Ledger Posting → Trial Balance → Financial Statements.
- ›Posting happens AFTER journalizing, never before.
Common traps
- !Placing Ledger Posting before Journal Entry in the cycle sequence.
Data Transfer Accuracy
Key rules
- ›Copy the amount exactly. Do not round or approximate.
- ›Preserve the debit/credit side: a debit in the journal posts as a debit in the ledger.
- ›Watch for transposed digits (e.g., posting 91 instead of 19), a common bookkeeping error.
Common traps
- !Reversing the debit/credit side when transferring to the ledger.
Arithmetical Proficiency
Key rules
- ›New ledger balance = prior balance ± posted amount (add if same side, subtract if opposite side).
- ›Verify the running balance after each posting before moving to the next entry.
Common traps
- !Adding a credit posting to a debit-balance account instead of subtracting.
Analytical Discrimination
Key rules
- ›Match each journal entry line to its specific ledger account using the Chart of Accounts.
- ›A single journal entry with three lines creates three separate ledger postings.
Common traps
- !Skipping a line of a compound journal entry and failing to post all accounts affected.
Try one
The act of transferring amounts from the journal to the ledger is called:
Posting is the specific act of transferring amounts from the journal (the book of original entry) to the individual ledger accounts.
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