General Ledger

The General ledger INTRODUCING THE LEDGER CONCEPT:  As you just saw, the general journal is, in essence, a notebook that contains page after page of detailed accounting transactions.  In contrast, the general ledger is, in essence, another notebook that contains a page for each and every account in use by a company.  The ledger account for Xao would include the Cash page as illustrated.  Xao's transactions utilized all of the following accounts: Cash Accounts Receivable Land Accounts Payable Notes Payable Capital Stock Service Revenue Advertising Expense Utilities Expense Therefore, Xao Corporation's general ledger will include a separate page for each of these nine accounts. POSTING:  Before diving into the details of each account, let's consider what we are about to do.  We are going to determine the balance of each specific account by posting.  To do this, we will copy ("post") the entries listed in the journal into their respective ledger accounts.  In other words, the debits and credits in the journal will be accumulated ("transferred"/"sorted")  into the appropriate debit and credit columns of each ledger page.  Here is an illustration of posting to the Cash account.  A similar process would occur for each of the other accounts: Below are all of the ledger pages for Xao that would result after posting all of the journal entries: _____________________________________________ _____________________________________________   TO REVIEW:  Thus far you should have grasped the following accounting "steps": STEP 1:  Each transaction is analyzed to determine the accounts involved STEP 2:  A journal entry is entered into the general journal for each transaction STEP 3:  Periodically, the journal entries are posted to the appropriate general ledger pages