Posting is the process of copying journal information to the individual ledger accounts. Every debit and credit entry in the journal should be posted to its respective ledger account in the order in which it appears in the journal.

To demonstrate the posting process, the first two General Journal entries for Cartier Window Coverings (discussed in Chapter 2) will be illustrated and explained. As you read through the following steps, refer to Figure 3.2, which shows the posting of Tom Cartier's transactions from the journal to the ledger accounts. Follow the arrows as the amounts are transferred from the journal to the ledger accounts:

1. Locate the ledger for the first account named in the first General Journal entry. In this case, the account is Bank (account 101). 2. Enter the date of the transaction in the Date column of the ledger account. The month and year are usually recorded only for the first entry in each account. It is not necessary to repeat them for subsequent entries in the same account, except when the account transactions are continued on a new page or when the month or year changes.

3. Write a suitable explanation in the memo column, if one is required. This might include an invoice number, a cheque number, or a special notation 4. Enter the amount ($80,000) that appears in the debit column of the journal in the debit column of the ledger account. Take care to ensure that all amounts are copied accurately. Be sure to write all numbers neatly. 5. Calculate the balance of the account and enter it in the Balance column. Since this is the first entry in the Bank account, the balance will be the same amount ($80,000). Later, when the second transaction is posted to the Bank account (the credit side of the June 3 entry), that transaction amount will be deducted from this balance to arrive at a new balance ($80,000 - $25,000 = $55,000). 6. Mark the status of this balance in the DR/CR column located between the Credit column and Balance column. You will write either Dr. or Cr. (indicating debit or credit) depending on the current status of each new balance. Here is an easy way to determine the status of an account balance: add up all the entries in the debit column, then add up all the entries in the credit column. Which column is larger? If the debit is larger, the balance is a debit. If the credit is larger, the balance is a credit. In the Bank account on June 1, there was a debit entry recorded but no credit entries; therefore, the $80,000 balance on that date is a debit balance. Later, when the June 3 entry is posted, the debit column will have a total of $80,000 and the credit column will have a total of $25,000. Since the debit column is still larger than the credit column, the new balance of $55,000 is a debit balance. 7. Enter the two folios (often called posting marks or posting references) that provide a cross-reference between the journal and the ledger account. (a) In the Folio (F.) column of the ledger account, write GJ1 to indicate that the transaction was transferred from page 1 of the General Journal. (b) In the Folio (F.) column in the General Journal, write the ledger account number (101 in this case) to indicate that the transaction was posted to that specific ledger account. These folios serve two important purposes: (1) they show that the transfer of the entry is complete; and (2) they assist in locating an entry that may be questionable or requires a correction. Folios provide an audit trail, which is the means of following a transaction from the source document to the journal and to the various ledger accounts, or from the ledger accounts back to the journal entry and back to the source document. 8. Repeat the posting process for the credit side of the transaction (Capital) in the journal. To avoid errors and missed entries, it is advisable to post the debit and credit entries line by line in the order they are written on the journal page. In Cartier's journal, we first post to Bank, then to Capital, then to Land, and then to Bank again. Balances in the ledger accounts should be calculated after each entry has been posted. This provides a running balance of each account.