Posting follows journalizing. In this step, journal entries are posted to the general ledger, also known as the book of final entry. Although routine and procedural, errors in posting also affect final balances carried to the financial statements. Posting is less analytical compared to journalizing, posting because it just involves copying (or posting) information from the general journal to the general ledger. It requires accuracy and errors in posting will affect the balances reported in financial statements. Otherwise, it is a simple, straightforward procedure.
The posting process groups transactions of similar nature, identified by their account titles. Account titles are labels of the same transactions that share common characteristics that meet the definition of an element of financial statements. Each account under an element has other unique characteristics to distinguish it from other accounts in the same element.
The general ledger is called the book of final entry because posting is the last act of recording a transaction in its original form. All other subsequent procedures do not record transactions but involve computations, summarization, analysis, or comparisons of data from the general ledger, or about a transaction already reported and recorded in the books. If journal entries are to be made because of these analyses, summaries, computations, or comparisons, these are no longer original entries involving a new transaction. Posting requires accuracy. Details should be posted to the correct accounts under the proper debit or credit columns
An accounting system may maintain other records such as registers and subsidiary ledgers, inventory cards, bank statements, and statements of accounts from banks and creditors, and stock and transfer books, These other records are not substituting for the general ledger but contain detailed information about an account or transaction that are not found in the general ledger. The information supports the amounts in the general ledger. The important link between these records and the general ledger are the balances of the accounts in the respective records.
The final balances of the accounts in the general ledger are reported in the entity’s financial statements. The general ledger provides a method to group and summarize similar transactions, based on the accounts involved. This is necessary to determine the balance of the account. Any error or discrepancy between the general ledger control accounts and the other records should be resolved before these amounts are carried over to the financial statements. The general ledger balances and the balances in the other records should match. None of these records copy transactions from the other. Instead, the entries are recorded by separate individuals doing their tasks independently of one another. Proper segregation of duties provides assurance about the fairness of the balances in the general ledger.
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