5.1 Prepare the General Ledger

5.1 Prepare the General Ledger

Quick Answer: Under TESDA Training Regulations for Bookkeeping NC III unit HCS412302 (Post transactions), Element 1 requires you to prepare ledgers for asset, liability, and equity titles and for income and expense titles in accordance with the approved Chart of Accounts. Before you transfer a single peso from the journal, every account sheet must exist, be titled correctly, and be ready to receive chronological postings.

Posting is not “copying numbers.” It is the systematic transfer of journal data into permanent account histories so management and assessors can read each account’s running story. If the general ledger is incomplete, mislabeled, or opened with the wrong form, every later skill—trial balance, adjustments, and financial statements—fails with it.

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What Element 1 Expects on Assessment Day

The performance criteria for preparing ledgers are practical and binary: either the set of ledger accounts matches the Chart of Accounts and is usable for posting, or it is not. Assessors look for:

1. Coverage — one ledger account for each title that will receive activity (and typically for titles that already have opening balances).
2. Classification — assets, liabilities, and equity (real/permanent accounts) prepared separately from income and expense (nominal/temporary accounts).
3. Identity — account name and code identical to the Chart of Accounts / accounting manual.
4. Form readiness — debit and credit columns (and usually a balance column) ruled and labeled before posting starts.

Code ranges above are illustrative. Always follow the Chart of Accounts provided in the TESDA work-related project or your firm’s accounting manual.

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T-Account Form vs Running-Balance Form

Philippine bookkeeping programs teach two visual forms of the same ledger account. You must recognize both; the assessment packet usually specifies which form to use for the project.

T-Account Form

The classic teaching shape looks like the letter T:

• Left side = Debit
• Right side = Credit
• Account title written across the top

T-accounts are fast for analyzing effects (“Cash increases on the debit side”) and for sketching solutions during the written exam. They are weaker for showing a continuous peso balance after every line when many postings accumulate.

Running-Balance (Three-Column / Four-Column) Form

Workplace and NC III practical projects commonly use a running-balance ledger sheet with columns such as:

Key features:

• Date of the journal entry being posted (not the date you physically write).
• Particulars briefly identify the counterpart or source (e.g., “Accounts Payable — ABC Trading,” “Cash Receipts Journal”).
• Folio / Journal Folio (J.F.) cross-references the journal page so an assessor can trace ₱12,500.00 back to SJ page 1.
• Debit and Credit money columns receive the posted amounts.
• Balance updates after each line so the account’s current standing is always visible.

Which Form Should You Use?

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Opening Ledger Accounts Step by Step

Use this checklist before Element 2 (transfer of journal entries) begins:

1. Obtain the Chart of Accounts used for the problem (same COA that guided journalizing).
2. List every title that has an opening balance or that appears in the journals for the period.
3. Prepare one sheet (or T) per title — do not combine “Cash in Bank” and “Petty Cash” on one page if the COA lists them separately.
4. Write the exact account title and code at the heading (e.g., 1100 Cash in Bank — BDO).
5. Enter the opening balance, if any, on the first money line:
   • Asset / expense / drawings openings normally appear as debit balances.
   • Liability / equity / income openings normally appear as credit balances.
   • Contra accounts follow their own normal balances (e.g., Accumulated Depreciation — Equipment is a credit balance).
6. Leave folio blank or mark “Bal. fwd.” / “Opening entry” for the opening line so it is not confused with a current-period journal transfer.
7. Rule columns neatly — peso amounts aligned; no erasures that hide figures (follow your assessment’s correction policy).

Philippine Example — Opening a Cash Ledger

Mabuhay Convenience Store (sole prop) starts January 2026 with Cash in Bank ₱85,000.00. The bookkeeper prepares running-balance Account 1100 Cash in Bank:

No journal folio is invented for a true balance forward. If the opening came from a formal opening general-journal entry on GJ page 1, the folio would show GJ1 and the debit column would show ₱85,000.00 with a matching credit somewhere in the equity/asset opening compound entry.

Philippine Example — Opening a Liability Ledger

Accounts Payable control starts with ₱42,300.00 credit. Account 2100 Accounts Payable opens:

The related accounts payable subsidiary ledger (covered in 5.2) must also be opened so that the sum of supplier balances equals ₱42,300.00 before new postings.

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Income and Expense Ledgers

Element 1 explicitly includes income and expense titles, not only balance-sheet accounts. Temporary accounts usually open at zero at the start of a new fiscal year after closing, but mid-period projects may give year-to-date balances.

Prepare the sheets even when the opening balance is zero so that the first sales or expense posting has a home. Assessors frequently deduct marks when a journalized title has no ledger page.

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Assessment Pitfalls When Preparing Ledgers

• Missing contra accounts — posting depreciation to Equipment alone without Accumulated Depreciation when the COA requires the contra title.
• Wrong entity titles — using “Owner’s Capital” for a corporation problem that requires Share Capital / Retained Earnings.
• Duplicate sheets for the same code under slightly different names (“Cash” vs “Cash in Bank”).
• Starting to post before all sheets exist — then inventing accounts midstream that do not match the COA.
• Ignoring special journals’ summary accounts — Cash, Sales, Purchases, AR, and AP still need general-ledger homes even when detail lives in special journals and subsidiaries.

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Link Forward

Once ledgers are prepared and opening balances verified, you are ready for subsidiary ledgers and control accounts (Section 5.2) and for transferring journal entries chronologically with full cross-references (Section 5.3). Element 1 ends when every required account sheet is correctly headed and primed—not when posting is finished.