by Journalizing means recording business transactions in the journal in date wise order. Each transaction is written with debit and credit entries following the rules of accounts. After journal entries are prepared, all items are transferred to their respective ledger accounts. This is called posting. Ledger is the main book where all accounts are maintained separately, like Cash Account, Sales Account and Purchases Account. Posting helps find balances of each account at the end of a period. This process can be done manually in notebooks or very easily in Excel using simple columns and formulas.
A. Journalizing Transactions Manually
Below is a sample format.
Journal Book Format
| Date | Particulars | L F | Debit (₹) | Credit (₹) |
|---|---|---|---|---|
| 01 Apr | Cash A c Dr. | – | 10,000 | – |
| To Capital A c | – | – | 10,000 | |
| (Capital introduced) | – | – | – |
Recording is done after checking which account to debit and which to credit.
B. Posting to Ledger Manually
Cash Account
| Date | Particulars | Debit (₹) | Credit (₹) | Balance |
|---|---|---|---|---|
| 01 Apr | To Capital | 10,000 | 10,000 |
Capital Account
| Date | Particulars | Debit (₹) | Credit (₹) | Balance |
|---|---|---|---|---|
| 01 Apr | By Cash | 10,000 | 10,000 |
Posting means transferring the debit entry of Cash into Cash Account and the credit entry of Capital into Capital Account.
C. Journalizing in Excel
You can create columns like this:
Date
Particulars
L F
Debit
Credit
After writing journal entries, create another sheet named Ledger.
In Ledger sheet, create separate tables for each account. Use formulas like SUMIF to calculate balances easily.
Example
Balance equals sum of all debit entries minus sum of all credit entries.
D. Posting Ledger in Excel
Make headings for each account
Cash Account
Capital Account
Copy debit and credit entries from Journal sheet or use filters to pick entries.
Use formulas to automate balances.
