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Ledger Accounts

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Format of Ledger

The ledger account or simply an account is a summarized statement of the financial transactions particularly relating to a subject, which may be a person, an asset, an expense or an income. It is a statement, which contains all transactions relating a particular thing for a specified period. The account has two main sides, left hand side and right hand side and in which all transactions relating to the subject concerned are recorded or either of its sides. The left-hand side of an account is popularly called debit side and the right-hand side the credit side.

Specimen of a ledger account

The format or ruling of a ledger account depends on the form of the account being prepared. An account can be either of a simple form or balancing form.

  • 'T' shaped form
    A simple form of ledger account is shaped like a English alphabet 'T' having two sides, left-hand side and the right-hand side which are commonly known as debit (Dr.) side and credit (Cr.) sides respectively. Each side of the account has the same four columns of date, particulars, journal folio, and amount.
  • Balancing Form
    It is the alternative form of a ledger account. In this form, the debit or credit balance can be readily ascertained after every entry is posted in the account. Generally, these forms of ledger accounts are used in the firm such as bank where ledger balances are required to be ascertained after every transaction is posted.

Posting into ledger accounts

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Posting means recording of transactions in the ledger book. It is the process of recording financial transactions in the concerned accounts contained in the ledger book. Posting is completed only when the two aspects of all financial transactions of a business that took place during a particular period are recorded in the ledger accounts. While posting in the ledger accounts, the following steps are taken:

  • Open the page on which the concerned account is located with the help of an index in the ledger book.
  • Enter the date of the transaction, in the 'Date'column on the concerned side of the account.
  • Record the concerned reference account in the 'Particulars' column of the concerned side with the appropriate word 'To or By'.
  • Enter the page number of either journal or subsidiary book 'Folio' column of the concerned side where the particular entry or account is located.
  • Write the relevant amount in the 'Amount' column on the concerned date.

Example

The following are the transactions of Sunita for the week of Baisakh:

Marga 1: Goods of Rs.10,000 purchased from Ronita.

Marga 3: Withdrew cash of Rs.7000 from the bank.

Marga 5: Cash of Rs. 5000 paid to Ronita.

Marga 7: Cash sales made for Rs. 500.

Required

  1. Journal entries
  2. Ledger account

Journal Entries

Date

Particular

L.F

Debit Rs.

Credit Rs.

Marga 1

Purchase a/c.............................Dr.

10,000

To Ronita's a/c

10,000

(Being goods purchased from Ronita)

Marga 3

Cash a/c....................................Dr.

7000

To Bank a/c

7000

(Being cash withdrew from bank for office use)

Marga 5

Ronita's a/c................................Dr.

5000

To Cash a/c

5000

(Being cash paid to Ronita)

Marga 7

Cash a/c...................................Dr.

500

To Sales a/c

500

(Being cash sales)

Total

22,500

22,500

As per journal entries shown above the following accounts are required to open in the ledger:

  1. Purchase a/c
  2. Ronita's a/c
  3. Cash a/c
  4. Bank a/c
  5. Sales a/c

Dr. Purchase Account Cr.

Date

Particular

JF

Amount

Date

Particular

JF

Amount

Marga 1

To Ronita's a/c

10,000

Marga 30

By balance c/d

10,000

10,000

10,000

Poush 1

To balance b/d

10,000

Dr. Ronita's Account Cr.

Date

Particular

JF

Amount

Date

Particular

JF

Amount

Marga 5

To Cash a/c

5000

Marga 1

By Purchase a/c

5000

5000

5000

Dr. Cash Account Cr.

Date

Particular

JF

Amount

Date

Particular

JF

Amount

Marga 3

Marga 7

To Bank a/c

To Sales a/c

7000

500

Marga 5

Marga 30

By Ronita's a/c

By Balance c/d

5000

2500

7500

7500

Poush 1

To Balance b/d

2500

Dr. Bank Account Cr.

Date

Particular

JF

Amount

Date

Particular

JF

Amount

Marga 30

To Balance c/d

7000

Marga 3

By Cash a/c

7000

7000

7000

Poush 1

By Balance b/d

7000

Dr. Sales Account Cr.

Date

Particular

JF

Amount

Date

Particular

JF

Amount

Marga 30

To Balance c/d

500

Marga 7

By Cash a/c

500

500

500

Poush 1

By Balance b/d

500

Posting without Journal Entries

The financial transactions of a business can also be posted in ledger accounts without preparing the journal. While posting into the ledger without journal entries, the following steps are to be taken:

  1. Identify the two aspects of each of he transactions.
  2. Recognize the name of accounts for the two aspects of each of the transactions.
  3. Judge the accounts to be debited and credited for the transactions.
  4. Post into the concerned accounts on the relevant side along with the appropriate amounts.



  • The ledger account or simply an account is a summarized statement of the financial transactions particularly relating to a subject, which may be a person, an asset, an expense or an income.
  • The format or ruling of a ledger account depends on the form of the account being prepared.
  • Posting means recording of transactions in the ledger book.
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Very Short Questions

Solution

Journal Entries

Date

Particulars

L.F.

Debit Rs.

Credit Rs.

a)

Nima’s a/c………………….Dr.

10,000

To sales a/c

10,000

(Being goods sold on credit)

b)

Cash a/c…………………..Dr.

4,000

Loss on sales a/c……………………Dr.

1,000

To furniture a/c

5,000

(Being furniture sold at loss)

c)

Cash a/c…………………Dr.

9,000

Discount allowed a/c………………..Dr.

1,000

To Nima’s a/c

10,000

(Being cash received from Nima and allowed discount to him)

d)

Cash a/c………………….Dr.

8,000

To bank loan a/c

8,000

(being loan received from bank)

Dr.

Nima’s a/c

Cr.

Date

Particulars

JF

Amount (Rs.)

Date

Particulars

JF

Amount (Rs.)

a)

To sales a/c

10,000

c)

By cash a/c

9,000

By discount allowed a/c

1,000

10,000

10,000

Solution:

Journal Entries

Date

Particulars

L.F.

Debit Rs.

Credit Rs.

2070/10/10

Furniture a/c…………………Dr.

20,000

To Gandaki Furniture workshop’s a/c

20,000

(Being furniture purchased on credit)

2070/10/15

Debtor’s a/c……………………Dr.

5,000

To sales a/c

5,000

(Being goods sold on credit)

2070/10/25

Cash a/c…………………..Dr.

5,500

To furniture a/c

5,000

To profit on sales a/c

500

(Being furniture sold on cash)

2070/10/27

Cash a/c………………Dr.

4,900

Discount allowed a/c……………Dr.

100

To debtor’s a/c

5,000

(Being cash collected from debtors and allowed discount)

Dr.

Furniture a/c

Cr.

Date

Particulars

JF

Amount (Rs.)

Date

Particulars

JF

Amount (Rs.)

2070/10/10

To Gandaki Furniture Workshop a/c

20,000

2070/10/25

By cash a/c

5,500

2070/10/25

To profit on sales a/c

500

2070/10/30

By balance c/d

15,000

20,500

20,500

2070/11/01

To balance b/d

15,000

Solution

Journal Entries

Date

Particulars

L.F.

Debit Rs.

Credit Rs.

2062/01/01

Purchase a/c……………….Dr.

10,000

To cash a/c

10,000

(Being goods purchased)

2062/01/09

Cash a/c…………..Dr.

25,000

To sales a/c

25,000

(Being cash sales made)

2062/01/18

Purchase a/c…………………..Dr.

30,000

To Rishav’s a/c

30,000

(Being goods purchased from Rishav)

2062/01/28

Rishav’s a/c

30,000

To cash a/c

29,000

To discount received a/c

1,000

(Being paid to Rishav and received discount)

Dr.

Purchase a/c

Cr.

Date

Particulars

JF

Amount (Rs.)

Date

Particulars

JF

Amount (Rs.)

2062/01/01

To cash a/c

10,000

2062/01/30

By balance c/d

40,000

2062/01/18

To Rishav’s a/c

30,000

40,000

40,000

2062/02/01

To balance b/d

40,000

Solution:

Journal Entries

Date

Particulars

L.F.

Debit Rs.

Credit Rs.

a)

Bank a/c………………..Dr.

3,500

Loss on sales a/c………………Dr.

500

To furniture a/c

4,000

(Being furniture sold at a loss of Rs.500)

b)

Suman’s a/c……………………Dr.

9,000

To sales a/c

9,000

(Being goods sold on credit)

c)

Cash a/c……………………Dr.

8,000

To bank a/c

8,000

(Being cash withdrawn from bank for office use)

d)

Cash a/c……………………Dr.

8,500

Discount allowed a/c…………………Dr.

500

To Suman’s a/c

9,000

(Being cash received from Suman and allowed him discount)

Dr.

Suman’s a/c

Cr.

Date

Particulars

JF

Amount (Rs.)

Date

Particulars

JF

Amount (Rs.)

b)

To sales a/c

9,000

d)

By cash a/c

8,500

By discount allowed a/c

500

9,000

9,000

While posting into the ledger without journal entries, the following steps are to be taken:

  1. Identify the two aspects of each of he transactions.
  2. Recognize the name of accounts for the two aspects of each of the transactions.
  3. Judge the accounts to be debited and credited for the transactions.
  4. Post into the concerned accounts on the relevant side along with the appropriate amounts.

0%
  • While posting the account from journal to the ledger, the rules of ______ should be followed.

    closing


    balancing


    journalising


    posting


  • The name of account should be mentioned at the ______.

    bottom-center


    top-right


    top-center


    top-left


  • What is the full form of JF?

    Journal Folio


    Journal Files


    Journal Filler


    Journal Fax


  • Account debited in a journal should be ______ in the ledger account.

    debited


    not be posted


    none of the options are correct


    credited


  • Account credited in the journal should be ______ in the ledger account.

    not be posted


    debited


    none of the options are correct


    credited


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