1. LEDGER

2. JOURNAL-LEDGER
Journal is a book of records where daily monetary transactions of a business is posted. Though it brings all the transactions together, it creates confusion between small and important expenses.
Thus, a ledger was introduced, where all the transactions are recorded under the individual accounts.

3. Thus, a group of accounts is known as ledger.
WHAT IS A LEDGER:
A ledger account can be defined as a summary statement of all the transactions relating to a person, asset, expense or income which have taken place during a given period of time and shows their net effect.
Thus, a group of accounts is known as ledger.

4. LEDGER: IN A NUTSHELL Ledger contains same information as journal.
It summarizes the transactions relating to person, asset, expense or income.
It is a book of accounts as it helps in achieving the objective of accounts.
It’s easier to understand and maintain than journal.

5. A ledger should answer:
What are the total sales to an individual customer?
What are the total purchases from an individual supplier?
How much amount is owed by debtors?
How much amount is owed to debtors?
What is the amount of profit or loss made during a particular period?
What is the financial position of the firm on a particular date?

6. TYPES OF LEDGER: GENERAL LEDGER SUBSIDIARY LEDGER
A collection of group of accounts that supports the value items shown in the major financial statements
SUBSIDIARY LEDGER
Subset of general ledger

7. FORMAT OF LEDGER: Dr. Cr. DATE PARTICU-LARS F. AMOUNT
To Name Of Credit Account
Rs.
By Name Of Debit Account

8. ITEMS IN LEDGER:
Each account in the ledger is divided into two equal parts by a vertical line.
The left hand side is known as debit (Dr.) side.
The right hand side is known as credit (Cr.) side.
The two sides are further divided into four columns, date, particulars, folio and amount.
‘F’ is the folio page number of the journal or subsidiary book.

9. LEDGER POSTING OF JOURNAL:
Every transaction is initially recorded in journal as journal entry. From the journal, it’s transferred to the respective accounts in the ledger.
This process of transferring from the journal to ledger is known as posting.
Lets see how do we post an entry from journal to ledger:

10. Now, lets see how the posting on ledger takes place:
Journal entry:
2010, April 1. Goods sold for cash Rs. 2,500
Dr Cr.
2010
April 1
Cash Account Dr.
To Sales Account
Rs.
2,500
Now, lets see how the posting on ledger takes place:

11. CASH ACCOUNT SALES ACCOUNT DATE PARTICU-LARS F. AMOUNT 2010 APRIL 1
To Sales Account
Rs.
2,500
SALES ACCOUNT
DATE
PARTICU-LARS F.
AMOUNT
Rs.
2010
April 1
By Cash Account
2,500

12. Now lets see how the posting in ledger takes place:
Now lets see how the compound journal entry works:
Ledger posting of compound journal entry is:
2010, April 30 paid for: Charity- Rs. 101
Salaries- Rs. 2,000
Stationery- Rs. 199
Dr Cr.
2010
April 30
Charity Account Dr.
Salaries Account Dr.
Stationery Account Dr.
To Cash Account
(Being amount paid for charity, salaries and stationery)
Rs.
101
2,000
199
2,300
Now lets see how the posting in ledger takes place:

13. CHARITY ACCOUNT SALARIES ACCOUNT DATE PARTICU-LARS F. AMOUNT 2010
APRIL 30
To Cash Account
Rs.
101
SALARIES ACCOUNT
DATE
PARTICU-LARS F.
AMOUNT
2010
APRIL 30
To Cash Account
Rs.
2,000

14. STATIONERY ACCOUNT CASH ACCOUNT DATE PARTICU-LARS F. AMOUNT 2010
APRIL 1
To Sales Account
Rs.
2,500
CASH ACCOUNT
DATE
PARTICU-LARS F.
AMOUNT
2010
APRIL 1
To Sales Account
Rs.
2,500

15. EXAMPLE:
Question: Post the following transactions in the ledger of Imran:
Rs.
Jan. 1 Started business with cash ,000
Jan. 2 Paid into bank ,000
Jan. 2 Goods purchased for cash , 000
Jan. 3 Purchase of Furniture and payment by cheque ,000
Jan. 5 Sold goods for cash ,500
Jan. 8 Sold goods to Arvind Walia ,000
Jan. 10 Good purchased from Amrit Lal ,000
Jan. 12 Goods returned to Amrit Lal ,000
Jan. 15 Goods returned to Arvind Walia

16. Jan. 18 Cash received from Arvind Walia Rs. 3,760 and
discount allowed to him
Jan. 21 Withdrew from bank for private use ,000
Withdrew from bank for use in the business ,000
Jan. 25 Paid telephone rent for one year
Jan. 28 Cash paid to Amrit Lal in full settlement of his account 5,940
Jan. 30 Paid for: Stationery
Rent ,000
Salaries to staff ,500

17. CASH ACCOUNT DATE PARTICU-LARS F. AMOUNT 2010 JAN. 1 5 18 21 31
To Capital A/c
To Sales A/c
To Arvind Walia
To Bank A/c
To Balance b/d
Rs.
45,000
8,500
3,760
5,000
62,260
12,220 2 25 28 30
By Bank A/c
By Purchase A/c
By Telephone rent A/c
By Amrit Lal
By Stationery A/c
By Rent A/c
By Salaries A/c
By Balances c/d
25,000
15,000
400
5,940
200
1,000
2,500

18. CAPITAL ACCOUNT DATE PARTICU-LARS F. AMOUNT 2010 JAN 30 To Balance c/d
45,000 1
DEC.1
By Cash A/c
By Balance b/d

19. BANK ACCOUNT DATE PARTICU-LARS F. AMOUNT 2010 JAN 1 31 To Cash A/c
To Balance b/d
Rs.
25,000
14,000 3 21 30
By Furniture A/c
By Drawings A/c
By Cash A/c
By Balance c/d
5,000
45,000

20. PURCHASES ACCOUNT DATE PARTICU-LARS F. AMOUNT 2010 JAN 2 10 31
To Cash A/c
To Amrit Lal
To Balance b/d
Rs.
15,000
7,000
22,000
14,000 30
By Balance c/d

21. FURNITURE ACCOUNT DATE PARTICU-LARS F. AMOUNT 2010 JAN 3 31
To Bank A/c
To Balance b/d
Rs.
5,000 30
By Balance c/d

22. SALES ACCOUNT DATE PARTICU-LARS F. AMOUNT 2010 JAN 30 31
To Balance c/d
To Balance b/d
Rs.
12,500
14,000 5 8
By Cash A/c
By Arvind Walia
8,500
4,000

23. ARVIND WALIA DATE PARTICU-LARS F. AMOUNT 2010 JAN 8 To Sales A/c Rs.
4,000
22,000 15 18
By Returns Inwards
By Cash A/c
By Discount A/c
200
3,760 40

24. AMRIT LAL DATE PARTICU-LARS F. AMOUNT 2010 JAN 12 28
To Returns Outwards
To Cash A/c
To Discount A/c
Rs.
1,000
5,940 60
7,000 10
By Purchase A/c

25. RETURNS INWARDS ACCOUNT
DATE
PARTICU-LARS F.
AMOUNT
2010
JAN 15 31
To Arvind Walia
To Balance b/d
Rs.
200 30
By Balance c/d

26. RETURNS OUTWARDS ACCOUNT
DATE
PARTICU-LARS F.
AMOUNT
2010
JAN 30
To Balance c/d
Rs.
1,000 12 31
By Amrit Lal
To Balance b/d

27. DISCOUNT ACCOUNT DATE PARTICU-LARS F. AMOUNT 2010 JAN 18 10
To Arvind Walia
To Amrit Lal
Rs. 40 20 60 28 31
By Amrit Lal
By Balance b/d

28. DRAWINGS ACCOUNT DATE PARTICU-LARS F. AMOUNT 2010 JAN 21 31
To Bank A/c
To Balance b/d
Rs.
1,000 30
By Balance c/d

29. TELEPHONE RENT ACCOUNT
DATE
PARTICU-LARS F.
AMOUNT
2010
JAN 25 10 31
To Cash A/c
To Amrit Lal
To Balance b/d
Rs.
15,000
7,000
22,000
14,000 30
By Balance c/d

30. SALARY ACCOUNT DATE PARTICU-LARS F. AMOUNT 2010 JAN 30 31 To Cash A/c
To Balance b/d
Rs.
200
By Balance c/d

31. RENT ACCOUNT DATE PARTICU-LARS F. AMOUNT 2010 JAN 30 31 To Cash A/c
To Balance b/d
Rs.
1,000
By Balance c/d

32. SALARIES ACCOUNT DATE PARTICU-LARS F. AMOUNT 2010 JAN 30 31
To Cash A/c
To Balance b/d
Rs.
2,500
By Balance c/d

33. THANK YOU