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Chapter 3 · Lesson 6 of 6 · ⏱ 35 min

Ledger and posting: from the journal to each account

🎯 After this lesson you will be able to:
  • Explain what a ledger is and why it is called the principal book
  • Draw the ledger (T-account) format and distinguish the journal from the ledger
  • Post simple and compound journal entries to the correct side of each account
  • Balance an account and understand debit and credit balances

The journal tells the story of the business day by day. But suppose the owner asks, “How much cash do I have right now?” or “How much does Rohan still owe me?” To answer from the journal, you would have to read every page and pick out the right lines. That is slow and risky. So accountants take each journal entry and copy its parts into separate accounts, one page per account. That book of accounts is the ledger, and the copying is called posting. Today you will learn the format, the posting steps, and how to find the balance of any account.

1. What is a ledger?

Priya Mehta runs Mehta Mobile Store in Bulandshahr. On 20 April a supplier, Galaxy Distributors, calls: “Madam, how much do you still owe us?” Priya opens her ledger to the page titled Galaxy Distributors Account. On the right side she sees the purchase of ₹80,000; on the left, the ₹50,000 she paid. In ten seconds she answers: “₹30,000.” The journal has the same facts, but scattered across many dates. The ledger groups them in one place.

Ledger: the book that contains all the accounts of a business, to which entries are transferred from the books of original entry. It is the principal book (main book) of accounting.

Posting: the process of transferring entries from the journal (book of original entry) to the respective accounts in the ledger.

A ledger may be a bound register, a set of cards, or loose sheets in a binder; today it is usually a screen in Tally or other accounting software. Each account is kept on a separate page (or card). To find accounts quickly, they are opened in a fixed order (for example, the order in which they appear in the Profit and Loss Account and the Balance Sheet), an index is kept at the beginning, and in big organisations each account gets a code number.

Why is the ledger so useful?

  • It shows the net result of all transactions of one account on any date: total cash, total sales, amount due from a customer, amount due to a supplier.
  • These figures are almost impossible to get quickly from the journal, because the journal is in date order and is not classified by account.
  • The balances from the ledger are used to prepare the trial balance and then the financial statements.

2. Format of a ledger account

Dr.Name of the AccountCr.
DateParticularsJ.F.₹DateParticularsJ.F.₹

Because it has two sides like the letter T, it is also called a T-account.

  • Title: the name of the account, written at the top and ending with the word “Account” (e.g. Cash Account, Rohan’s Account).
  • Dr. and Cr.: the left half is the debit side, the right half is the credit side.
  • Date: year, month and date of the transaction, in date order.
  • Particulars: the name of the other account involved in the journal entry. Traditionally, entries on the debit side begin with “To” and entries on the credit side begin with “By”.
  • J.F. (Journal Folio): the page number of the journal where the entry is recorded. It is filled at the time of posting.
  • Amount: the amount taken from the journal entry.

L.F. lives in the journal and points to the ledger page. J.F. lives in the ledger and points back to the journal page. Together they form a two-way link, so any figure can be traced both ways. If a J.F./L.F. is blank, that entry has not been posted yet.

3. Journal vs ledger

BasisJournalLedger
StageBook of first (original) entryBook of second entry (principal book)
Nature of recordChronological (date-wise)Analytical (account-wise)
Basis of classificationTransactionAccount
Legal evidenceGreater value, as the first record made from source documentsLess value than the journal
Name of the processJournalisingPosting

4. Classification of ledger accounts

You already know the five categories: assets, liabilities, capital, revenues/gains and expenses/losses. For the ledger, they are grouped into two:

Permanent accountsTemporary accounts
Which onesAssets, liabilities, capitalRevenues and expenses
At the end of the yearBalanced and carried forward to the next yearClosed by transfer to the Trading and Profit and Loss Account
Appear inBalance SheetTrading and Profit and Loss Account
ExamplesCash, Bank, Furniture, Creditors, CapitalSales, Purchases, Rent, Salaries, Commission Received

5. How to post: step by step

Posting the debit part of an entry:

  1. Find (or open) in the ledger the account that is debited in the journal.
  2. On its debit side, write the date.
  3. In Particulars, write “To” + the name of the account that is credited in the entry.
  4. Write the journal page number in the J.F. column (and this ledger page number in the L.F. column of the journal).
  5. Write the amount on the debit side.

Posting the credit part: do the same on the credit side of the credited account, writing “By” + the name of the debited account.

An account is opened only once in the ledger. All later entries for that account go on the same page, on the debit or the credit side as the case may be.

Post these two journal entries (journal page 1) of Mehta Mobile Store:
(a) Apr 6: Furniture A/c Dr. ₹25,000 To Bank A/c ₹25,000.
(b) Apr 25: Cash A/c Dr. ₹9,800, Discount Allowed A/c Dr. ₹200 To Anil’s A/c ₹10,000.
  1. (a) Furniture is debited → on the debit side of Furniture A/c write “To Bank A/c ₹25,000”. Bank is credited → on the credit side of Bank A/c write “By Furniture A/c ₹25,000”. Each account names the other account.
  2. (b) is compound. Cash A/c (debit side): “To Anil’s A/c ₹9,800”. Discount Allowed A/c (debit side): “To Anil’s A/c ₹200”.
  3. Anil’s A/c (credit side) gets two separate lines: “By Cash A/c ₹9,800” and “By Discount Allowed A/c ₹200”. Do not post a single “₹10,000” line: the ledger must show how the amount was settled.
Dr.Furniture AccountCr.
DateParticularsJ.F.₹DateParticularsJ.F.₹
2026
Apr 6		To Bank A/c125,000
Dr.Bank AccountCr.
DateParticularsJ.F.₹DateParticularsJ.F.₹
2026
Apr 6		By Furniture A/c125,000
Dr.Anil’s AccountCr.
DateParticularsJ.F.₹DateParticularsJ.F.₹
2026
Apr 25		By Cash A/c19,800
Apr 25By Discount Allowed A/c1200

(Cash A/c and Discount Allowed A/c each get one line on the debit side: “To Anil’s A/c”.)

Never write the account’s own name in its particulars. In Furniture A/c you write “To Bank A/c”, not “To Furniture A/c”. The particulars answer the question: “Where did this debit (or credit) come from?”

The entry “Cash A/c Dr. To Sales A/c ₹30,000” is being posted. On which side of Sales Account will ₹30,000 appear?

Sales is the account credited in the journal.
Sales A/c is credited in the journal, so it is posted on the credit side of Sales Account as “By Cash A/c ₹30,000”.

6. Balancing an account

After posting, each account has amounts on both sides. The balance is the difference between the two sides. It tells you where the account stands: how much cash is left, how much a customer still owes, and so on. Balancing is normally done at the end of a period (a month or a year).

Steps to balance an account:

  1. Add both sides separately.
  2. Find the difference.
  3. Write the difference on the side with the smaller total, as “To Balance c/d” (debit side) or “By Balance c/d” (credit side). c/d = carried down.
  4. Now both sides are equal; write the same total on both sides, on the same line.
  5. On the first day of the next period, bring the balance down on the opposite side (the bigger side) as “To Balance b/d” or “By Balance b/d”. b/d = brought down.
If the debit side is biggerIf the credit side is biggerIf both sides are equal
Debit balance. Usual for assets, expenses, losses and debtors.Credit balance. Usual for liabilities, capital, revenues, gains and creditors.No balance; the account is closed (e.g. a debtor who has paid in full).

“c/d goes to the lighter side; b/d comes back to the heavier side.” The heavier side decides the name: a heavier debit side means a debit balance.

At the end of the year, asset, liability and capital accounts are balanced and carried forward. Revenue and expense accounts are not carried forward; they are closed by transfer to the Trading and Profit and Loss Account. You will study balancing in more detail in Chapter 4 and the closing of accounts when you prepare financial statements.

7. Complete example: journal, posting and balancing

Journalise the following transactions of Mehta Mobile Store, post them to the ledger, and balance the Cash, Bank and Galaxy Distributors accounts on 30 April 2026. (Ignore GST.)
Apr 1 Priya Mehta started business with cash ₹2,00,000.
Apr 2 Deposited ₹1,20,000 into a bank account.
Apr 4 Bought mobile phones from Galaxy Distributors on credit ₹80,000.
Apr 6 Bought furniture, paid by cheque ₹25,000.
Apr 10 Cash sales ₹30,000.
Apr 14 Sold phones to Rohan on credit ₹18,000.
Apr 18 Paid Galaxy Distributors by cheque ₹50,000.
Apr 22 Received cash from Rohan ₹18,000.
Apr 25 Paid shop rent in cash ₹8,000.
Apr 28 Withdrew cash for personal use ₹5,000.
Apr 30 Paid salary by UPI ₹12,000.
  1. Journal (page 1). The L.F. column shows the ledger page of each account, filled while posting.
    DateParticularsL.F.Dr (₹)Cr (₹)
    2026
    Apr 1    		Cash A/c Dr.12,00,000
    To Capital A/c22,00,000
    (Being business started with cash)
    Apr 2Bank A/c Dr.31,20,000
    To Cash A/c11,20,000
    (Being cash deposited into bank)
    Apr 4Purchases A/c Dr.480,000
    To Galaxy Distributors A/c580,000
    (Being goods bought on credit)
    Apr 6Furniture A/c Dr.625,000
    To Bank A/c325,000
    (Being furniture bought, paid by cheque)
    Apr 10Cash A/c Dr.130,000
    To Sales A/c730,000
    (Being goods sold for cash)
    Apr 14Rohan’s A/c Dr.818,000
    To Sales A/c718,000
    (Being goods sold on credit)
    Apr 18Galaxy Distributors A/c Dr.550,000
    To Bank A/c350,000
    (Being payment made by cheque)
    Apr 22Cash A/c Dr.118,000
    To Rohan’s A/c818,000
    (Being cash received from Rohan)
    Apr 25Rent A/c Dr.98,000
    To Cash A/c18,000
    (Being shop rent paid)
    Apr 28Drawings A/c Dr.105,000
    To Cash A/c15,000
    (Being cash withdrawn for personal use)
    Apr 30Salaries A/c Dr.1112,000
    To Bank A/c312,000
    (Being salary paid by UPI)
    Total5,66,0005,66,000
  2. Balancing Cash A/c: debit side = 2,00,000 + 30,000 + 18,000 = 2,48,000; credit side = 1,20,000 + 8,000 + 5,000 = 1,33,000. Difference = ₹1,15,000, written on the credit (smaller) side as “By Balance c/d”.
  3. Balancing Bank A/c: debit = 1,20,000; credit = 25,000 + 50,000 + 12,000 = 87,000. Balance c/d = ₹33,000 (credit side).
  4. Balancing Galaxy Distributors A/c: credit = 80,000; debit = 50,000. Balance c/d = ₹30,000, written on the debit (smaller) side; it is a credit balance, meaning we still owe Galaxy ₹30,000.
  5. Rohan’s A/c: both sides ₹18,000, so it is closed. The other accounts have one entry each.

Ledger of Mehta Mobile Store

Dr.Cash AccountCr.
DateParticularsJ.F.₹DateParticularsJ.F.₹
2026
Apr 1		To Capital A/c12,00,0002026
Apr 2		By Bank A/c11,20,000
Apr 10To Sales A/c130,000Apr 25By Rent A/c18,000
Apr 22To Rohan’s A/c118,000Apr 28By Drawings A/c15,000
Apr 30By Balance c/d1,15,000
2,48,0002,48,000
May 1To Balance b/d1,15,000
Dr.Capital AccountCr.
DateParticularsJ.F.₹DateParticularsJ.F.₹
2026
Apr 1		By Cash A/c12,00,000
Dr.Bank AccountCr.
DateParticularsJ.F.₹DateParticularsJ.F.₹
2026
Apr 2		To Cash A/c11,20,0002026
Apr 6		By Furniture A/c125,000
Apr 18By Galaxy Distributors A/c150,000
Apr 30By Salaries A/c112,000
Apr 30By Balance c/d33,000
1,20,0001,20,000
May 1To Balance b/d33,000
Dr.Purchases AccountCr.
DateParticularsJ.F.₹DateParticularsJ.F.₹
2026
Apr 4		To Galaxy Distributors A/c180,000
Dr.Galaxy Distributors AccountCr.
DateParticularsJ.F.₹DateParticularsJ.F.₹
2026
Apr 18		To Bank A/c150,0002026
Apr 4		By Purchases A/c180,000
Apr 30To Balance c/d30,000
80,00080,000
May 1By Balance b/d30,000
Dr.Furniture AccountCr.
DateParticularsJ.F.₹DateParticularsJ.F.₹
2026
Apr 6		To Bank A/c125,000
Dr.Sales AccountCr.
DateParticularsJ.F.₹DateParticularsJ.F.₹
2026
Apr 10		By Cash A/c130,000
Apr 14By Rohan’s A/c118,000
Dr.Rohan’s AccountCr.
DateParticularsJ.F.₹DateParticularsJ.F.₹
2026
Apr 14		To Sales A/c118,0002026
Apr 22		By Cash A/c118,000
18,00018,000
Dr.Rent AccountCr.
DateParticularsJ.F.₹DateParticularsJ.F.₹
2026
Apr 25		To Cash A/c18,000
Dr.Drawings AccountCr.
DateParticularsJ.F.₹DateParticularsJ.F.₹
2026
Apr 28		To Cash A/c15,000
Dr.Salaries AccountCr.
DateParticularsJ.F.₹DateParticularsJ.F.₹
2026
Apr 30		To Bank A/c112,000

Closing position on 30 April: Cash ₹1,15,000 (Dr.), Bank ₹33,000 (Dr.), Galaxy Distributors ₹30,000 (Cr.).

Quick self-check: every journal entry has equal debits and credits, and each is posted once to each side. So the total of all debit postings in the ledger equals the total of all credit postings (here ₹5,66,000 each). This idea is the base of the trial balance in Chapter 6.

In the example above, what is written in the Particulars column on the debit side of Galaxy Distributors Account for 18 April?

In the journal, Galaxy was debited. Which account was credited in the same entry?
The entry was “Galaxy Distributors A/c Dr. To Bank A/c”. On Galaxy’s debit side we write the other account: To Bank A/c ₹50,000.

A stationery shop’s Cash Account for May 2026 shows on the debit side: opening balance ₹50,000, cash sales ₹12,000 and cash from a debtor ₹8,500. The credit side shows: purchases ₹20,000, wages ₹6,000 and electricity ₹3,500. What is the closing balance of cash (in ₹)?

Total each side, then subtract the smaller from the bigger.
Debit total = 50,000 + 12,000 + 8,500 = 70,500. Credit total = 20,000 + 6,000 + 3,500 = 29,500. Balance = 70,500 − 29,500 = ₹41,000 (debit balance), shown as “By Balance c/d” on the credit side.

Verma Suppliers’ Account (a creditor) shows: credit side: purchases ₹60,000 and ₹25,000; debit side: payment by bank ₹40,000, goods returned ₹5,000 and discount received ₹1,000. What is the balance of this account (in ₹)? (It is a credit balance.)

Credit total − debit total.
Credit = 60,000 + 25,000 = 85,000. Debit = 40,000 + 5,000 + 1,000 = 46,000. Balance = 85,000 − 46,000 = ₹39,000 credit balance: the shop still owes Verma Suppliers this amount.

8. Play with a T-account

Post entries to the debit and credit sides and watch the balance change.

9. Exam tips

  • In “journalise and post” questions (usually 6 marks), marks are split between the journal and the ledger. Draw every ledger account neatly with Dr./Cr. and the title.
  • Post in date order. Write the year once at the top of each side.
  • Post compound entries line by line: each credited account appears separately in the debited account, and vice versa.
  • When asked to balance, always show c/d, equal totals on the same line, and b/d on the next date.
The J.F. column of a ledger account records:
  • the page number of the ledger
  • the page number of the journal where the entry is recorded
  • the date of posting
  • the voucher number
J.F. = Journal Folio, the page of the journal from which the amount was posted. It helps trace the ledger figure back to the original entry.
The credit side of an account totals ₹72,000 and the debit side ₹90,000. The account shows:
  • a credit balance of ₹18,000, written as “To Balance c/d”
  • a debit balance of ₹18,000, written as “To Balance c/d”
  • a debit balance of ₹18,000, written as “By Balance c/d”
  • a credit balance of ₹1,62,000
The debit side is heavier, so it is a debit balance of 90,000 − 72,000 = ₹18,000. The c/d figure goes on the lighter (credit) side, so it begins with “By”.

📌 Points to remember (Quick Revision)

  • Ledger = principal book containing all accounts; posting = transferring journal entries to the ledger accounts.
  • Format: Dr. side and Cr. side, each with Date | Particulars | J.F. | Amount. Debit-side particulars begin with “To”, credit-side with “By”, and name the other account.
  • Journal: chronological, first entry, journalising. Ledger: analytical, second entry, posting. L.F. and J.F. link the two.
  • Permanent accounts (assets, liabilities, capital) are balanced and carried forward; temporary accounts (revenues, expenses) are closed to the Trading and Profit and Loss Account.
  • Balancing: total both sides, write the difference as Balance c/d on the lighter side, equal totals, then Balance b/d on the heavier side.

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