Tracking business activity with T accounts would be cumbersome because most businesses have a large number of transactions each day. These transactions are initially recorded on source documents, such as invoices or checks. The first step in the accounting process is to analyze each transaction and identify what effect it has on the accounts. After making this determination, an accountant enters the transactions in chronological order into a journal, a process called journalizing the transactions. Although many companies use specialized journals for certain transactions, all businesses use a general journal. In this book, the terms general journal and journal are used interchangeably.
The journal's page number appears near the upper right corner. In the example below, GJ1 stands for page 1 of the general journal. Many general journals have five columns: Date, Account Title and Description, Posting Reference, Debit, and Credit.
To record a journal entry, begin by entering the date of the transaction in the journal's date column. For convenience, include the year and month only at the top of each page and next to each month's first entry. In the next column, list each account affected by the transaction on a separate line, and enter a short description of the transaction immediately below the list of accounts. The accounts being debited always appear above the accounts being credited, which are indented slightly. The posting reference column remains blank until the journal entry is transferred to the accounts, a process called posting, at which time the account's number is placed in this column. Finally, enter the debit or credit amount for each account in the appropriate columns on the right side of the journal. Generally, one blank line separates each transaction.
Posting Reference
What is posting reference?
Posting reference is a field that facilitates cross-referencing or interlinking between the journal and the ledger in the posting process. Posting reference columns are present in both the journal and the ledger.
Also known as: Folio
Purpose of the Posting Reference
The posting reference facilitates referencing between the journal and the ledger. It is used in the posting process. Posting refers to the act of transferring information from the journal to the ledger.
In the journal, the posting reference cites the account number to which the entry was posted. In the ledger, it indicates the source of the entry, i.e. which journal (some businesses maintain a general journal and several special journals) and sometimes in what page of that journal can the entry be found.
Posting Reference in the Journal
The posting reference (PR), sometimes folio (F), column in the journal usually comes after the particulars or description column. During the posting process, the account number of account found in the ledger is entered in this field.
Posting Reference in the Ledger
In the ledger, two PR columns are found on each account – one after the particulars column of the debit side and one after that of the credit side. The source journal is placed in this field, e.g., GJ for general journal, SJ for sales journal, CRJ for cash receipts journal, etc. The page number may also be included (for example, GJ1, meaning page 1 of the general journal).
Account # - Account Title | ||||||
Example
On December 15, 2021, ABC Company collected $10,000 accounts receivable from its customers. After this transaction is recorded and posted, the journal entry would look like:
Cash | 1010 | 10,000 | |
Accounts Receivable | 1020 | 10,000 |
PR is filled with the account number of the respective account found in the ledger. In the ledger, the affected accounts would look like these. Assume it was recorded on page 5 of the general journal.
Account #1010 - Cash | ||||||
Collection | GJ5 | 10,000 | ||||
Account #1020 - Accounts Receivable | ||||||
12/15 | Collection | GJ5 | 10,000 | |||
Since the information came from the general journal, GJ is written in the PR fields. GJ5 indicates that the entry can be found on page 5 of the general journal.
Web link
APA format
Posting Reference - Accounting Dictionary (2022). Accountingverse.
//www.accountingverse.com/dictionary/p/posting-reference.html
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