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Post

When we post, we take the journal entry and transfer the amount of the debit to the associated account in the general ledger, and we do the same for the credit. The general ledger is a book in which each account has its own page. Each page is considered a ‘‘T’’ account, so named because in the old days a large ‘‘T’’ was drawn on the page. The name of the account was written across the top. The left side was used for the debits, and the right side was used for the credits (consistent with our previous statement that debits are on the left and credits on the right). In our sample entry, we were debiting $10,000 to the Cash account and crediting $10,000 to the Sales account. The T account for the Cash account is shown in Figure 3-2, and the T account for the Sales account is shown in Figure 3-3.

Any time you want to figure out the balance in an account, you take all the debits and add them to get the total debits. Then you take all the credits and add them to get the total
credits. Then you subtract the total debits from the total credits or vice versa and write the difference on whichever side is larger. For example, if the Cash account had debits of $10,000, $20,000, and $5,000 and there was one credit of $15,000, the account would have a debit balance of $20,000. [The total debits are $10,000 + $20,000+$5,000 = $35,000, and the total credits are $15,000. Subtracting the total debits and total credits produces $20,000 ($35,000 - $15,000), which we write on the larger side, in this case the debit side.] The T account for this situation is shown in Figure 3-4.

Another way to show the balance in the T account is by writing the subtotals for debits and credits and then writing the balance underneath the larger side, as shown in Figure 3-5.
It is customary to draw a line before writing the balance. Today, general ledger pages often do not have a large T drawn on them, but the essential information remains the same—the
name of the account, debits in a column on the left, and credits in a column on the right. There can be additional columns for a running balance (see Figure 3-6), or the balance can be
written under the larger side. The basics of the T account are applicable to any general ledger page in any manual or computerized system.
Taken From : Accounting Demystified

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