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Accounting Foundations for UAE Business Owners/Double-Entry Bookkeeping
15 min

Posting to the General Ledger

Learn to post journal entries to the general ledger, balance T-accounts, extract a trial balance, and identify common posting errors.

Learning Objectives

By the end of this lesson, you will be able to:

  1. Post a series of transactions to the general ledger using journal entries.
  2. Balance T-accounts and calculate closing balances.
  3. Extract a trial balance from the ledger.
  4. Identify common posting errors.

From Transaction to Journal Entry

A journal entry is the formal record of a transaction, showing:

  • The date
  • The accounts to debit and credit
  • The amounts
  • A brief narration (description)

The format is:

Date: 2026-03-15
  Debit: Cash                    AED 50,000
  Credit: Sales revenue           AED 50,000
  Narration: Cash sale to customer

Posting to the General Ledger

Posting means transferring each journal entry to the relevant account in the general ledger. Each account has its own T-account in the ledger.

Let's post a full month of transactions for a UAE trading LLC:

Journal Entries for March 2026

  1. Mar 1 — Owner invests AED 500,000 cash — Dr Cash 500,000 / Cr Share capital 500,000
  2. Mar 5 — Buy inventory on credit for AED 120,000 — Dr Inventory 120,000 / Cr Accounts payable 120,000
  3. Mar 10 — Sell inventory for AED 200,000 cash (cost AED 120,000) — Dr Cash 200,000 / Cr Sales revenue 200,000 and Dr Cost of sales 120,000 / Cr Inventory 120,000
  4. Mar 15 — Pay rent AED 30,000 — Dr Rent expense 30,000 / Cr Cash 30,000
  5. Mar 20 — Pay supplier AED 80,000 — Dr Accounts payable 80,000 / Cr Cash 80,000
  6. Mar 25 — Pay salaries AED 40,000 — Dr Salaries expense 40,000 / Cr Cash 40,000

Balancing the T-Accounts

After posting, we balance each account by totaling debits and credits and calculating the closing balance.

Cash Account: Debits total 700,000 (500k + 200k), Credits total 150,000 (30k + 80k + 40k), Balance = 550,000.

Inventory Account: Debit 120,000, Credit 120,000, Balance = 0.

Accounts Payable: Credit 120,000, Debit 80,000, Balance = 40,000 (credit).

Share Capital: Credit 500,000, Balance = 500,000.

Sales Revenue: Credit 200,000, Balance = 200,000.

Cost of Sales: Debit 120,000, Balance = 120,000.

Rent Expense: Debit 30,000, Balance = 30,000.

Salaries Expense: Debit 40,000, Balance = 40,000.

Extracting the Trial Balance

The trial balance lists all account balances at a point in time:

| Account | Debit (AED) | Credit (AED) | |---------|-------------|-------------| | Cash | 550,000 | | | Accounts payable | | 40,000 | | Share capital | | 500,000 | | Sales revenue | | 200,000 | | Cost of sales | 120,000 | | | Rent expense | 30,000 | | | Salaries expense | 40,000 | | | Total | 740,000 | 740,000 |

The trial balance balances, confirming that total debits equal total credits.

Common Posting Errors

Not all errors are caught by the trial balance. The trial balance only confirms that debits equal credits. It does not catch:

  • Errors of omission — a transaction not recorded at all.
  • Errors of commission — posting to the wrong account of the same type.
  • Errors of principle — posting to the wrong account type (e.g., an expense as an asset).
  • Errors of original entry — the wrong amount entered in both debit and credit.
  • Compensating errors — two errors that cancel each other out.

These errors require manual review and reconciliation to detect.

Summary

A journal entry records the date, accounts, amounts, and narration of a transaction. Posting transfers each entry to the relevant T-account in the general ledger. The trial balance lists all balances and confirms that total debits equal total credits. Some errors (omission, commission, principle) are not caught by the trial balance and require manual review.

This lesson is general educational content, not individualized tax or legal advice.

Practical UAE example

**For a Business Owner:** Khalid wants to know his business position at month-end. His accountant extracts the trial balance, which shows Cash AED 430,000, Accounts payable AED 40,000, Share capital AED 500,000, Revenue AED 200,000, Cost of sales AED 120,000, Rent AED 30,000, Salaries AED 40,000. Khalid can see his business has AED 430,000 in cash, owes AED 40,000, and has earned AED 10,000 net profit (200,000 - 120,000 - 30,000 - 40,000). --- **For a Junior Accountant:** Fatima posts 15 journal entries for March. After balancing all T-accounts, she extracts the trial balance. The totals are Debits AED 950,000 and Credits AED 945,000 — a AED 5,000 difference. She must find the error before preparing financial statements. She checks whether any entry was posted only on one side, whether any amount was transposed, and whether any balance was carried forward incorrectly. She finds that a AED 5,000 rent payment was debited but not credited to cash — a one-sided posting error.

Key takeaways

  • A journal entry records the date, accounts, amounts, and narration of a transaction.
  • Posting transfers each entry to the relevant T-account in the general ledger.
  • The trial balance lists all account balances and confirms that total debits equal total credits.
  • The trial balance does not catch errors of omission, commission, principle, original entry, or compensating errors — these require manual review.
Knowledge check

1. Which of the following errors would NOT be detected by a trial balance?

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This lesson is general educational content, not individualized tax or legal advice. Always consult a qualified professional for your specific situation.