Difference Between Journalizing vs Posting
Which of the following is the final step in the journalizing and posting process? In order to answer this question, it’s important to first answer the question, “what is the difference between journalizing and posting?” To begin with, both are stages in the accounting cycle. These two concepts are often misinterpreted as one and the same, but they’re dissimilar.
Definition of Journalizing
The definition of journalizing is the entry of financial data (normally obtained from a journal voucher) referring to a particular transaction in the context of double-entry accounting. Journalizing is a procedure that involves taking into account five details about the transaction: the date, the general ledger account involved in the debit or credit, and the corresponding values in the stated currency of each, a concise summary of the transactions, and a specific cross-reference to the general book.
Basically, it’s a sequential recording of both single or repetitive items of business transactions, and the documents produced from the journalizing serve as a fundamental source of financial histories. This process can be tedious, but it must be done with accuracy, or it will cause financial gaps in the future. Specifically, the steps in this process are as follows:
- Classify the transaction’s nature by examining it.
- Find the relevant financial records. To do this, the author must recognize and determine which documents in the general ledgers are influenced by the identified transaction.
- Start the entry by entering the transaction for the accounting system. The keeper must ensure that the reason for its creation is clear.
Definition of Posting
The definition of posting is the act of moving balances realized from the journal entries and subledgers to the main book. In other words, the purpose of posting is to transfer the recorded figures from the journalizing to the ledger. Accuracy is as important in this step as in the previous step. To begin with:
- Specify the transaction date.
- Supply the journal entry page number in the column for the referenced post.
- Indicate the deduction or accumulation data.
- Supply the new balance in the column for debits or credits.
- Provide the book account specifications in the general book’s referenced post.
- Iterate the steps as necessary.
Posting is a crucial stage in the process and ensures that the book account accurately reflects all transactions.
Main Differences Between Journalizing vs Posting
|Basis of Comparison
|Taking note of a business transaction from evidence documents
|Transferring journal inputs to the book
|Business Dealing Details
|Order in the cycle
The table of the main differences between the two demonstrates their discrepancies in the process.
Difference Between Journalizing and Posting: Conclusion
Journalizing and posting are two steps in accounting. Amidst the difference, there is sometimes a misperception between these two factors, so a comparison of journalizing vs posting should help to further differentiate the latter from the former. It is essential to understand them, but it is also essential to understand the accounting cycle before starting it.