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• This process is carried throughout the year and at the end of the financial

year the ledger accounts are closed and are totaled and balanced. This

process is called the balancing of the ledger accounts

Rules for posting of entries in the ledger

1. A separate account is opened for each account and entries from the journal

are posted in respective ledger account accordingly.

2. The words like ‘To’ and ‘By’ are used while posting the entries in the ledger

accounts.

3. ‘To’ is used when accounts are posted in the debit side column of a

particular account.

4. ‘By’ is used when accounts are posted in the credit side column of a

particular account.

5. These words may not have meaning but are used to represent the debit

and credit accounts.

The account which is debited in the journal should also be debited

in the ledger book but the reference should be of respective credit

account

Balancing of Ledger

• At the end of every accounting year all the accounts which are operated

in the ledger book are closed, totalled and balanced.