Function of the Posting Reference (PR) Column
The Posting Reference (PR) column is a crucial element in accounting, serving as a tool to enhance organization and clarity in the posting process. Its primary purpose is to indicate when entries have been posted to the ledger accounts, ensuring that each journal entry is posted only once.
Key Facts
- Purpose: The PR column, which stands for Posting Reference, is used to indicate when entries have been posted to the ledger accounts.
- Organization and Clarity: The PR column enhances organization and clarity in accounting. It serves as a cross-reference between the journal and the ledger, guiding bookkeepers to the ledger account where transactions posted to a specific account are stored.
- Marking Posted Entries: Bookkeepers use the PR column to mark the posted journal entries and keep track of the ones that still need to be posted in the future.
- Double Purpose: The PR column serves a double purpose. It not only indicates that the entry has been posted but also shows the account to which it was posted.
The PR column is typically located between the account description column and the debit column of the general journal. When a bookkeeper posts journal entries to the ledger accounts, they enter the number of the posting account in the PR column next to the debit or credit. This serves as a cross-reference between the journal and the ledger, guiding bookkeepers to the ledger account where transactions posted to a specific account are stored.
By marking posted entries, the PR column helps bookkeepers keep track of the entries that still need to be posted in the future. This is particularly useful when dealing with general journals that contain hundreds or even thousands of entries, preventing errors and improper balances from occurring.
Furthermore, the PR column serves a double purpose. It not only indicates that the entry has been posted but also shows the account to which it was posted. This additional information provides a clear record of the posting process, making it easier to track and verify transactions.
Conclusion
The Posting Reference column is an essential tool in accounting, contributing to the accuracy and efficiency of the posting process. By providing a clear indication of posted entries and the ledger accounts to which they were posted, the PR column enhances organization, clarity, and accountability in accounting records.
References
FAQs
What is the primary purpose of the PR column?
The primary purpose of the PR column is to indicate when entries have been posted to the ledger accounts, ensuring that each journal entry is posted only once.
Where is the PR column typically located?
The PR column is typically located between the account description column and the debit column of the general journal.
How does the PR column enhance organization and clarity in accounting?
The PR column serves as a cross-reference between the journal and the ledger, guiding bookkeepers to the ledger account where transactions posted to a specific account are stored.
What is the double purpose of the PR column?
The PR column serves a double purpose. It not only indicates that the entry has been posted but also shows the account to which it was posted.
How does the PR column help bookkeepers keep track of unposted entries?
By marking posted entries, the PR column helps bookkeepers keep track of the entries that still need to be posted in the future.
Is the PR column mandatory in accounting?
While the PR column is not strictly mandatory, it is highly recommended as a best practice to ensure accuracy and efficiency in the posting process.
Can the PR column be used for other purposes besides posting references?
No, the PR column is specifically designed for indicating posted entries and should not be used for other purposes.
Is the PR column visible in financial statements?
No, the PR column is an internal tool used by bookkeepers and is not visible in financial statements.