Introduction of Ledger Posting in Accounting

Ledger Posting in Accounting plays a very important role in maintaining accounts books or records of transactions. At the time of preparing accounts in any organization (business), preparing different ledger accounts, and also finding balance in each account is very important.

Meaning of Ledger Posting in Accounting

Accounting is a process of recording the financial transactions of the business. The objective of the organization is to get useful information relating to business from the recorded entries. for example, in the ledger posting accounting, we can find details of total sales during the financial year, details of purchases, types and amounts of expenses, types & amounts of income, total liabilities & assets, profit & loss suffered, etc. 

In view of the above information, separate accounts are prepared for the specific information from the accounting entries. The different types of accounts are prepared in a separate book, which is known as a Ledger Book.

Meaning of Posting

From journal books, a process of recording as per the rules of accounting, either on the debit or credit side of an affected account is known as posting.

Utility or advantages of Ledger Posting in Accounting

The purpose of accounting is not only limited to recording monetary receipts and payments. Based on the summary of accounts, proper decisions regarding the business policy can be taken. Necessary and useful information to an organization as well as different summaries can be easily and quickly obtained from the ledger. Thus the fulfillment of the main objects of accounting is possible with the help of the ledger only. Therefore ledger is known as the King of Books.

Ledger posting in accounting becomes useful to get the following information

Capital Ratio:

It gives information about how much capital is employed in the business.


Different types of assets are purchased in the business. It gives information about the number of different assets at the end of the year.

Receivable & Payables:

It gives information about how much is the amount of receivable & payables at the end of the year in a business.

Expenses and Incomes:

It gives information on different expenses and incomes during the accounting year and also its total and individual amounts.

Purchase & Sales:

It gives the information for total purchases, total sales, total purchase return, total sales return, and also outflow of goods other than sales during the accounting year.

Trial Balance Preparation:

It helps to prepare a trial balance to get information about the balances of all accounts from the ledger. 

Final Account Preparation:

It gives information about the different accounts of a ledger for the preparation of the final accounts of a business at the end of the year.

Policymaking Decisions:

It helps an organization by giving useful and important information from ledgers for policy-making decisions.

Statistical Information:

It gives useful statistical information from accounts and also points out statistical or principal mistakes.

Indexing of Ledger Posting in Accounting

All accounts arising from business transactions are maintained in a ledger. There are numerous such accounts. At the time of the posting process, too much time is wasted to find out which account is on which page.

Therefore, for the sake of convenience at the beginning of the ledger itself, a list of all accounts is maintained, which is known as indexing or exponent of a ledger. Such a list is prepared alphabetically. Here each page is serially numbered and therefore against each account. Its page number is shown and because of this, any account can be found from the ledger quickly and easily. For example

Name of Account Ledger Page Number
Sohan’s A/c 1
Mohan’s A/c 4
State Bank of India’s  55
Telephone & Mobile Exp. A/c 65

Form of Ledger

The form in which a ledger book is to be maintained depends upon the business requirement capacity to afford the same and business facilities. Three forms of the ledger are in practice

1. Bound Book Ledger:

Generally, most organizations or small businesses prefer these types of ledger. This type of ledger is the overall less expensive and easy form viewpoint of preservation. This ledger is in the form of a bound book. At the beginning of it, the index is given and thereafter each page is serially numbered. As and When required, a new page can’t be added in this type of ledger because it is a book in bound form.

2. Loose Leaf ledger:

This type of ledger is in a filed form in between two thick paper covers or in between two metal sheets. The structure is connected with a special type of lock. As with the lock system, It ensures the facility with safe. Here each page is serially numbered. Here, a trader can increase or decrease the number of pages according to his requirements.

3. Card Ledger:

This form of a ledger is a safe form with convenience. Here for each account instead of a page, a card is used. All these cards are arranged with a steel bar. All the cards are preserved in a special steel or wooden cabinet. Of course, overall it is an expensive form. Here We can increase or decrease the number of cards as per their requirements. In this form for indexing, separate cards are required to be arranged.

But nowadays a computer is widely increasing in accounting entries and ledger.

Process for Ledger Posting in Accounting

There are two types of process of posting.

(1) Posting of Journal entries 

Journal entries are passed in the book of account for the financial transaction of a business. Journal entries are classified into two parts, Simple journal entries & combined journal entries. A simple journal entry is affected by only two accounts out of which one gets a debit effect and the other one gets a credit effect. In the combined entry, three or more three accounts are affected. In this type of journal entry either on the debit or credit side, more than one affected account are there. Sometimes on both the debit and credit side, there is more than one affected account because this posting process of combined entry requires more care.

(2) Posting from Daybooks

Each one keeps the day book as per their business requirements. Generally, the following day books are used in a large business. for example, Cashbook, Purchase book, Sales book, Purchase & sales return book, Bills receivable & payable books & Journal Book. There is a large-scale business that may keep their daybooks with different columns as per their requirements of ledger posting in accounting.


One response to “Ledger Posting in Accounting”

  1. […] Ledger Posting in Accounting is a very important role to prepare different ledger accounts and also to find balance in each account.  […]

Leave a Reply