Posting to the ledger

The journal is in date order; the ledger is in account order. Posting is the re-sort, and it is what turns a list of events into a balance you can report.

Reading: 8 min
Teaches: 6
Sources: 1

A journal in date order cannot answer "how much cash do we have?" without reading all of it. So every line is copied to the account it names, and each account keeps a running balance. That copy is posting, and the accounts together are the general ledger.

01Something happens
02Journal
03LedgerPosted to the accounts it touches.
04Trial balance
05Adjust
06Statements
07Close

1000 Cash — operating register
Date	Ref	Memo	Debit	Credit	Balance
2026-09-01	JE-1	The founders pay $60,000 into the company's bank account for their shares.	60,000.00		60,000.00
2026-09-01	JE-2	Northwind buys a delivery van outright for $24,000.		24,000.00	36,000.00
2026-09-02	JE-3	Twelve months of insurance is paid up front: $7,200.		7,200.00	28,800.00
2026-09-08	JE-5	A walk-in customer buys $9,500 of goods and pays on the spot.	9,500.00		38,300.00
2026-09-20	JE-9	Northwind pays $12,000 against the supplier's bill.		12,000.00	26,300.00
2026-09-22	JE-10	The trade customer pays $14,000 of the September invoice.	14,000.00		40,300.00
2026-09-25	JE-11	September payroll of $8,400 is paid. (Kept simple: no withholding or payroll taxes.)		8,400.00	31,900.00
2026-09-26	JE-12	A customer pays a $3,000 deposit for goods to be delivered in October.	3,000.00		34,900.00
2026-09-28	JE-13	September rent of $2,000 is paid.		2,000.00	32,900.00

The cash account as a register: every movement, in date order, with the balance after each.

Fig 6.1General ledger

Hover to pull the drawers · click to replay26 postings

Northwind's September transactions, filed line by line into five drawers. Each card carries its drawer's running balance on the drawer's normal side — the same re-sort the register above does for one account.

Two things about a posted line are worth saying plainly. First, it keeps its reference — JE-9 on this row is a link back to the entry that produced it and to the evidence behind that entry. A balance you cannot walk back to a document is not evidence of anything. Second, a posted entry is never edited or deleted. If it is wrong, it is corrected by a reversal and a new entry, so the record of what was believed, and when, survives.

Wrong

UPDATE journal_lines SET amount = 8400 WHERE id = 219

Right

Post JE-14 reversing JE-11, then post JE-15 with the right figure

The audit trail is the product. A system that lets you edit a posted entry cannot tell an auditor what the books said last Tuesday.

Fig 6.2Posting & reversal

Drag to turn · click to replayJE-11 posted

JE-11 keyed as $4,800 instead of $8,400. The posted entry stays exactly as it was; JE-14 reverses it line for line and JE-15 posts the right figure, so the record of what was believed, and when, survives.

Where the balances end up

1200Accounts receivable

Debit	Credit
JE-722,000.00	JE-1014,000.00
Total22,000.00	Total14,000.00

Balance 8,000.00 on the debit side — the difference between the two columns.

Accounts receivable: $22,000 invoiced, $14,000 collected, $8,000 still owed at 30 September.

Control accounts and subledgers

That receivable account has a second job. With one customer it is easy to read, but a real business invoices hundreds, and the general ledger should not carry an account per customer. So 1200 is a control account: one balance in the ledger, with the detail — which customer, which invoice, how old — kept in a subledger underneath it. Northwind's receivables subledger has exactly one open invoice, the trade customer's, with $8,000 left on it. The rule that makes the arrangement safe is that the subledger must always sum to the control account; lesson 13 is where that gets proved.

Post every line of every transaction and you have twelve accounts with a balance each. That set of balances is the next lesson — and the moment you can prove the whole month arithmetically.

Your turn

Post every movement through Cash

Nine entries touched cash in September. They are listed in date order with the amounts blanked from row four down — fill them in from the entries in this lesson and watch the running balance. The ledger should land on $32,900 at 30 September.

Post every movement through Cash
Row	ARef	BWhat happened	CDebitCash in	DCreditCash out
1
2
3
4
5
6
7
8
9
10
11
12

Cash in60,000.00

Cash out31,200.00

Balance28,800.00

Ref	Debit	Credit	Balance
JE-1	60,000.00		60,000.00
JE-2		24,000.00	36,000.00
JE-3		7,200.00	28,800.00

Your closing cash is 28,800.00; the book says 32,900.00. You are out by 4,100.00.

Check yourself

JE-11 was posted with payroll of 4,800 instead of 8,400. What is the fix?

Where this lesson's rules come from

Requirements, conventions and mechanics are three different things. These are the sources behind the requirements — and the ones marked as conventions are ours, not the standard-setters'.

SEC Release 33-8238 (June 2003) — Sarbanes-Oxley §404Management's report on internal control over financial reportingFree to read

The full map is in US GAAP, and where these rules come from.

The words this lesson teaches

Each links to its definition in the glossary, where it also states the authority behind it and the components that render it.

In the founder glossary

The ideas in this lesson, explained for the founder who runs the company. Each has its own entry in the founder glossary.

Reversals