Journal Posting in Accounting: How an Entry Reaches the Ledger, and How a Posted One Is Corrected
Journal posting in accounting moves each journal entry into the general ledger, where every account keeps a running balance. A posted entry that proves wrong is fixed with a correcting journal entry; for records kept electronically, the CRA's guidance says a change must be made by journal entry.
General information, not tax advice. We do not file your tax returns, and we do not give tax, legal or financial advice. Confirm your own situation with your accountant or the Canada Revenue Agency.
The Bookkeeping Service keeps books the same way: "Every posted entry is permanent and numbered, and a correction is a visible reversal plus a repost rather than a silent edit."
The journal, the ledger and the trial balance at a glance
| Record | What it holds | What it is for | Source |
|---|---|---|---|
| Journal | Every transaction, as debits and credits | The first place a transaction enters the books | OpenStax 3.5 |
| Chart of accounts | The numbered list of accounts | Orders them as the financial statements do | OpenStax 3.2 |
| General ledger | Each account and its balance | Shows balances without re-reading every entry | OpenStax 3.5 |
| Trial balance | Every account with a nonzero balance | Checks that total debits equal total credits | OpenStax 3.6 |
What is a journal entry in accounting?
A journal entry records a transaction as debits and credits to named accounts. Intermediate Financial Accounting 1, an open textbook published through eCampusOntario, defines it as "the means by which transactions are recorded in the general ledger". In OpenStax's Principles of Accounting, the journal is "the first place information is entered into the accounting system."
Each entry carries a date, at least one debit and at least one credit, and a short description. The same text is firm that "The dollar value of the debits must equal the dollar value of the credits or else the equation will go out of balance."
What is a chart of accounts?
A chart of accounts is the numbered list of accounts a business records its transactions in. A company begins with "a list of all the accounts used in day-to-day transactions", gives each account a number, and, in the OpenStax text's words, "We call this account numbering system a chart of accounts."
The numbers follow the financial statements: "The accounts are presented in the chart of accounts in the order in which they appear on the financial statements, beginning with the balance sheet accounts and then the income statement accounts."
On the Bookkeeping Service, AI prepares each entry and you "never approve categories yourself". The plans are on the pricing page.
What is a general ledger, and what does posting do?
The general ledger is the set of accounts the journal feeds, and posting is the step that feeds it. The OpenStax text puts it simply: "Posting takes all transactions from the journal during a period and moves the information to a general ledger, or ledger." The journal is organised by transaction; the ledger is organised by account.
Posting copies; it does not decide. A debit in the journal entry goes to the debit column of that account in the ledger, and a credit goes to the credit column, beside "a balance column that keeps a running total of the balance in the account after every transaction."
For the day-to-day job around these records, read what a bookkeeper does next.
What is the difference between a debit and a credit?
A debit is an entry on the left side of an account and a credit is an entry on the right. The type of account decides whether each one is an increase or a decrease. In Intermediate Financial Accounting 1's words, "For financial transactions that affect assets, dividends, and expenses, increases are recorded by debits and decreases by credits."
Other accounts run the other way. In the OpenStax examples, "A liability account increases on the credit side", and "Revenue accounts increase on the credit side".
Every change is matched by another. If one item in the accounting equation changes, another must change to balance it, and, as Intermediate Financial Accounting 1 puts it, "This equality is the essence of double-entry accounting."
How do you fix a bookkeeping mistake?
Find it first, then correct it with a new journal entry. A trial balance catches some mistakes; as OpenStax puts it, "If the two balances are not equal, there is a mistake in at least one of the columns." Once the error is found, Lumen Learning's open Financial Accounting text says to "make correcting journal entries."
When the totals differ, the OpenStax text starts with arithmetic: divide the difference by two and look for that amount on the side with the higher total, or divide it by nine, because "If the outcome of the difference is a whole number, then you may have transposed a figure."
A balanced trial balance is a smoke alarm, not an inspection. The same text warns that "We can have errors and still be mathematically in balance." Which mistakes are worth watching for is the subject of our guide to common bookkeeping mistakes.
Can you change a posted journal entry?
Not by editing it in place, if your records are electronic and you follow the Canada Revenue Agency's guidance. Its circular on electronic record keeping, written for "A person carrying on a business with an electronic business system", lists controls "to ensure there is no accidental or intentional editing or deletion of recorded or completed transactions."
The same paragraph sets out how: "Changes to any recorded transaction must be made by journal entry, be adequately documented, and at least include the following". The list is who made the change, when, the transaction details before and after, and why (IC05-1R1, Electronic Record Keeping).
Example: correcting a posted entry
Example, with illustrative amounts. A $300 rent payment was posted to Advertising. The Bookkeeping Service corrects it by reversing the original and posting a replacement:
| Entry | Debit | Credit |
|---|---|---|
| 1. The original, as posted | Advertising $300 | Cash $300 |
| 2. Reversal of entry 1 | Cash $300 | Advertising $300 |
| 3. The replacement | Rent $300 | Cash $300 |
Advertising ends where it started, Rent carries the $300, and Cash has gone down by $300 once.
How the Bookkeeping Service handles a posted entry
Our service page says: "Every write goes through one posting engine. A posted entry is frozen. If something is wrong, the fix is a reversal and a repost, both numbered and both visible in the register." The same page adds: "Both entries stay in the register, both are numbered, and the link between them is visible. Nothing is edited in place and nothing disappears, which is what makes the books defensible later."
Entries are checked before they post. When the AI is not confident, "the entry does not post: it goes to a review queue worked by a trained reviewer on our staff, who opens the source document and decides the treatment."
Whether to trust software with the books at all is the subject of how reliable AI bookkeeping is.
Frequently asked questions
Is posting the same as journalizing? No. Recording a transaction in the journal is the second step of the accounting cycle; posting it to the ledger is the third.
What is a compound entry? One with more than one debit or credit line, where, in OpenStax's words, "there is more than one account listed under the debit and/or credit column of a journal entry". The totals must still match.
How long do I have to keep my records in Canada? Generally six years. The CRA says "you must keep all required records and supporting documents for a period of six years from the end of the last tax year they relate to." For individuals the tax year is the calendar year, while a corporation counts from its fiscal period; our guide to CRA bookkeeping requirements covers the rest.
What is an audit trail? The CRA defines it as "the information that is needed to recreate a sequence of events related to a business transaction." It also says electronic records "must show an audit trail from supporting documents, whether paper or electronic, to the summarized financial accounts."
When you would rather the posting was done for you
The Bookkeeping Service keeps the books through the year: you send receipts and invoices, each entry is prepared and validated before it posts, and anything uncertain goes to a reviewer on our staff. "Your accountant does year-end, adjusting entries and tax." We do not file your tax returns, and we do not give tax, legal or financial advice.
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