POST (Posting in Accounting)

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

1. 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.

2. 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.

3. 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

1. Journal: A chronological record of all financial transactions made by a business.
2. Ledger: A book or other collection of financial accounts.
3. Trial Balance: A statement that lists the total debits and credits in all ledger accounts to ensure they balance.
4. Chart of Accounts: A listing of all accounts used in the general ledger of an organization, organized by account type.
5. Double-Entry Accounting: An accounting system in which every transaction affects two accounts, requiring both a debit and a credit.

Online References

1. Investopedia - Posting Definition
2. Wikipedia - Posting in Accounting
3. AccountingTools - Posting to the General Ledger

Suggested Books for Further Studies

1. “Accounting Made Simple: Accounting Explained in 100 Pages or Less” by Mike Piper
2. “Financial Accounting” by Jerry J. Weygandt
3. “Principles of Accounting” by Mitchell Franklin, Patty Graybeal, and Dixon Cooper
4. “Accounting for Non-Accountants” by Wayne Label

Fundamentals of POST in Accounting: Accounting Basics Quiz

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