Definition
POST in accounting refers to the process of transferring entries from a journal to individual accounts in the ledger. This ensures that all financial transactions are recorded in detailed accounts, providing an accurate record of a company’s financial activities. Traditionally, banks posted deposits and withdrawals from checking accounts in a ledger before summarizing these transactions on a monthly bank statement. However, with advancements in technology, these processes are largely computerized.
Examples
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Bank Transactions:
- Journal Entry: On March 1, a bank receives a deposit of $1,000. A journal entry is recorded.
- Posting: This transaction is then posted to the bank’s ledger, typically into the customer’s account, increasing the account balance by $1,000.
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Sales Transactions:
- Journal Entry: A business sells goods worth $500 on credit. A journal entry records the sale.
- Posting: This transaction is posted to the sales ledger and the accounts receivable ledger.
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Expense Recording:
- Journal Entry: A company incurs $200 in office supplies expenses.
- Posting: The $200 is posted to the supplies expense account in the ledger.
Frequently Asked Questions (FAQs)
Q1: What is the purpose of POST in accounting? A1: The purpose of posting in accounting is to ensure that financial transactions recorded in the journals (chronological records) are properly reflected in the ledger accounts (systematic records), providing a detailed and organized financial record.
Q2: Do modern businesses still use physical ledgers for POST? A2: Most modern businesses use computerized accounting systems, which automate the process of posting journal entries to ledgers, although the fundamental principles remain the same.
Q3: How does POST differ from journalizing? A3: Journalizing refers to the initial recording of financial transactions in a journal in chronological order, while posting is the process of transferring those journal entries to the appropriate ledger accounts.
Q4: What is the importance of posting in bank transactions? A4: Posting bank transactions ensures that all deposits and withdrawals are accurately recorded in the customer’s account and properly summarized in monthly statements, providing a clear record of financial activity.
Q5: Can errors occur during the posting process? A5: Yes, errors can occur if entries are posted to incorrect accounts or with incorrect amounts. Regular reconciliation and use of computerized accounting systems help minimize such errors.
Related Terms with Definitions
- Journal: A chronological record of all financial transactions made by a business.
- Ledger: A book or other collection of financial accounts.
- Trial Balance: A statement that lists the total debits and credits in all ledger accounts to ensure they balance.
- Chart of Accounts: A listing of all accounts used in the general ledger of an organization, organized by account type.
- Double-Entry Accounting: An accounting system in which every transaction affects two accounts, requiring both a debit and a credit.
Online References
- Investopedia - Posting Definition
- Wikipedia - Posting in Accounting
- AccountingTools - Posting to the General Ledger
Suggested Books for Further Studies
- “Accounting Made Simple: Accounting Explained in 100 Pages or Less” by Mike Piper
- “Financial Accounting” by Jerry J. Weygandt
- “Principles of Accounting” by Mitchell Franklin, Patty Graybeal, and Dixon Cooper
- “Accounting for Non-Accountants” by Wayne Label
Fundamentals of POST in Accounting: Accounting Basics Quiz
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