LEDGER The main function of a ledger is to classify or sort out all items appearing in the journal under their appropriate accounts. At the end of the accounting period each account will contain the entire information of all the transactions in a summarized or condensed form. Con…

All the transactions are recorded first in the journal and then from the journal they are posted in the respective accounts in the ledger. Ledger is a book where all the transactions would ultimately find their place under the respective heads of accounts. Con…

Con… Question.1. What is a Ledger? Answer. Ledger is a book where all the transactions find their place under the respective heads of accounts. Question.2. What is the main function of a Ledger? Answer. The main function of a ledger is to classify or sort out all items appearing in the journal under their appropriate accounts. Con…

HOW TO OPEN AN ACCOUNT IN THE LEDGER The page is divided into two parts by vertical line in between. The left hand side is used as a debit side of an account having four columns and the right hand side is used as a credit side also having four columns. Total columns in a ledger account are eight. Con…

------------Name (Account) Dr. Cr. Date Particulars J.F. Amount

Con… Question.3. How many columns are in a Ledger? Answer. There are eight columns in a Ledger. Question.4. Name the left hand side of the Ledger. Answer. Left hand side of the ledger is called debit side. Question.5. Name the right hand side of the Ledger. Answer. Right hand side of the ledger is called credit side. Con…

POSTING Every transaction is first recorded in the journal and then it is posted into the ledger. Posting is made to the debit side account which is debited in the journal entry and to the credit side of an account which is credited in the journal entry. Con…

Name of the credit account is written on the debit account and the name of debit account is written on the credit side of account. Entry on the debit side of an account starts with “To” whereas on the credit side starts with “By”. Con…

CLOSING OF ACCOUNTS The object of recording the business transactions in various ledger accounts to enable a trader to ascertain balance of an account easily at any time. For the preparation of Trial balance all accounts are to be closed. Con…

TRIAL BALANCE A trial balance is a summary of all the ledger balances outstanding as on particular date. List of debit balances and credit balances should be equal. It said that Trial balance is tallied. When trial balance tallies it establishes the arithmetical accuracy of record. Con…

Performa of Trial Balance is as follows: Trial Balance as on ………… Serial No. Name of Account Amount 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Capital Drawings Sales Sales return (Return Inwards) Purchases Purchases return (Return Outwards) Expenses Incomes Carriage Inwards Carriage Outwards Bad Debts Trade Expenses Insurance Rent, Rates & Taxes Traveling Expenses -  

16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 Discount Received Discount Allowed Loan taken Stock (Opening) Interest Paid Loan Given Interest received Suppliers (Creditors) Investment Goodwill Cash Patents Machinery Furniture & Fixture Plant Land Building Debtors Bills Receivables Bills Payables -  

36 37 38 39 40 41 42 Bank Overdraft Printing & Stationery Wages Salaries Advertisement Motor Car Exp. Cash at Bank - TOTAL

Question.6. What is a Trial Balance? Answer. A trial balance is a summary of all the ledger balances outstanding as on particular date. Question.7. Fill in the blank Answer. Debit side and credit side of a Trial Balance must be ………….. (Equal) OR (Unequal) Con…

Example.1. Prepare a Trial Balance from the following items: Particulars Totals Capital Furniture & Fixture Land & Building Plant & Machinery Drawings Patents Stock Purchases Wages Salaries Sundry Debtors Sales Sales Returns Purchases Returns Loan from Adil Rent, Rates & Taxes Bad Debts Sundry Creditors Discount received Trade Expenses Interest on Loan Insurance Traveling Expenses Cash in Hand Cash at Bank 7,63,050 40,000 4,03,000 2,00,000 60,000 20,000 4,00,000 9,50,000 50,000 72,000 3,50,000 13,20,000 61,000 10,000 48,000 4,000 2,24,000 9,000 700 4,500 6,500 3,000 2,100 51,250

Solution. 1. Trial Balance as on__________ Serial No. Name of Account Amount 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Capital Furniture & Fixture Land & Building Plant & Machinery Drawings Patents Stock Purchases Wages Salaries Sundry Debtors Sales Sales Returns Purchases Returns Loan from Adil Rent, Rates & Taxes Bad Debts Sundry Creditors Discount received Trade Expenses Interest on Loan Insurance Traveling Expenses Cash in Hand Cash at Bank 40,000 4,03,000 2,00,000 60,000 20,000 4,00,000 9,50,000 50,000 72,000 3,50,000   61,000 48,000 4,000 700 4,500 6,500 3,000 2,100 51,250 7,63,050 13,20,000 10,000 2,24,000 9,000 TOTAL 27,26,050