Posting in accounting is a process that involves the shifting of the balances in the general journal and those in the sub-ledgers into the general journal. Only the totals of the sub-ledger transferred to the general ledger and not the individual transactions. Posting can be done daily or monthly depending on the accounting manager’s decision (Bragg, 2013). The following are the steps involved in the posting in the accounting system.
Identify and analyze transactions: Once the transaction is identified, it’s analyzed to see the accounts affected and the figures to be recorded (Franzel, 2009). The steps involved in this stage include preparation of the source document used as the basis for recording transactions.
Recording in the journal: The recording is done by the use of double entry a system of bookkeeping. The journal entry used contains at least two accounts i.e. debit and credit accounts.
Posting to ledger: Ledgers are books of the final entry, it involves a collection of accounts that shows the adjustment made to individual accounts from the past transactions and their current balances. This helps to determine the balances of different accounts.
Unadjusted Trial Balance: the only vital role of the trial balance is to check on the equality of the total credit and total debt.
Adjusting entries: this stage ensures accounts are updated before transferred to the financial statements for the summary. They act as an application of the accrual basis of accounting.
Adjusted trial balance: this tests if the debit totals are equal to the credit totals after adjustments are made in the previous procedure.
Financial statements: these are the end products of the accounting system. They are prepared once the equality of the debit and credit have checked and accounts are up to date.
Closing entries: temporary accounts like income statements are closed to prepare the system for the next accounting period. Permanent accounts like the balance sheet are not closed.
Post-closing trial balance: this the last stage and it involves checking on the equality of the debit and credit balances after closing entries are made. At this stage, the temporary accounts are already closed and therefore it only contains real accounts only.
References
Bragg, S. (2013). Accounting best practices. Hoboken, N.J.: John Wiley & Sons.
Franzel, J. (2009). Management report. Washington, DC: U.S. Govt. Accountability Office.
