The Four Column Ledger Account Form
After journalizing a transaction, the journal should be posted in the respective ledger account. The ledger has four columns, and includes two sets of debit and two sets of credit columns. It is known as the four-column ledger.
The first two debit and credit columns are used to record the debit and credit entries. The second debit and credit columns are used to enter the balance after the journal is posted in the ledger account.
The transactions should be recorded according to the accounting rules: if there is a debit balance, it should be entered in the debit column; if there is a credit balance, it should be entered in the credit column.
The ledger account is posted according to the following accounting equation:
- The assets appear on the left side of the account and increase with a debit.
- The liability and owner’s equity account appear on the right side of the account and increase with credits.
Remember:
- Assets and Expenses – Debit Balance
- Liability, Revenue, and Owner’s Equity Account – Credit Balance
When a transaction occurs, its details are recorded in a journal. However, only the effect of the event on a specific item is recorded in the ledger; the journal is updated on a regular basis, while the ledger is posted only periodically.
Click on the Play button to understand the ledger account opening balance.