When posting occurs, the accounting cycle becomes source document → transaction → journal → ledger.

Question

BlackTom AI · Accepted Answer

Posting is the process of transferring journal entries to the ledger, so the sequence source document → transaction → journal → ledger is correct.

1) Relevant knowledge points and concepts
- Source document: original evidence of a transaction (invoice, receipt, bank statement).
- Transaction analysis: deciding which accounts are affected and whether they increase or decrease.
- Journalizing: recording the transaction as a journal entry with debits and credits, date, and explanation.
- Posting: transferring the amounts from the journal to the appropriate ledger (T-accounts or account balances) and recording folio references.

2) Step-by-step reasoning
- Step 1: A source document is created when an economic event occurs (e.g., supplier invoice for $500 supplies).
- Step 2: The transaction is analyzed to determine affected accounts (Supplies and Cash) and the amounts.
- Step 3: The transaction is journalized: Journal entry: Debit Supplies $500; Credit Cash $500.
- Step 4: Posting occurs: the $500 debit is posted to the Supplies ledger account and the $500 credit is posted to the Cash ledger account. Each ledger account balance is updated and cross-referenced with journal folio numbers.

3) Intermediate steps (example)
- Source document: Invoice for $500.
- Analyze: Supplies (+asset), Cash (-asset).
- Journal: Supplies Dr $500; Cash Cr $500.
- Post: Add $500 debit to Supplies ledger; add $500 credit to Cash ledger; record folio references.

4) Why the correct answer is correct
Because posting is explicitly the activity that moves journalized transactions into ledger accounts, the accounting sequence indeed proceeds from source document to transaction analysis to journal entry to ledger posting.

5) Why the other option is incorrect
- “False” would imply posting does not follow journalizing or that the ledger is not updated from the journal, which contradicts standard accounting procedure. Posting is the standard next step after journalizing.

6) Conclusion
The statement is True, which matches the provided answer.

When posting occurs, the accounting cycle becomes source document → transaction → journal → ledger.True/False

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