22408925 journal ledger trial balance ppt

7/25/2019 22408925 Journal Ledger Trial Balance Ppt

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Presentation

Topics covered:

Accounting Equation

Journal

Ledger

Trial Balance

Presented By: Bhawana and Esha

PGDM st

!e"


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A##$%&T'&G E(%AT'$&

$)

D%AL #$EPT

Each Business transaction has a two *old e**ect and it is re*erred to

as dual aspect or duality o* a transaction+The dual aspect states

that *or each de,it there is a credit i+e -*or every de,it there is a

credit.+

An acconting equation is a state"ent o* equality ,etween the

assets and the sources through which the assets have ,een

*inanced and this can ,e e/pressed as

Assets0!ources

Assets0Lia,ilities1 #apital

Assets0Lia,ilities1$wner2s equity


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#LA!!'3'#AT'$&

$3

A##$%&T!:

Personal Account:4 &atural Personal Account i+e+ account o* natural or physical persons

e+g )a"2s A5c6

!ita2s A5c etc+

Arti*icial Personal Accounts i+e accounts o* arti*icial or legal persone+g+accounts o* *ir"s6co"panies6,an7s6govern"ent6schools andcolleges etc+

)epresentative personal accounts 8these accounts are calledrepresentative personal account as they represent certain person,ehind the" e+g outstanding e/penses account6inco"e receivedaccount


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Impersonal Account:-

)eal Account: )eal accounts are accounts o* properties6assets or things owned ,y a

concern and with which the ,usiness is carried on+)eal or assets accounts "ay ,e4

9Tangi,le Assets4assets such as goods account6cashaccount6*urniture account etc+

9'ntangi,le Assets4 such as goodwill account6patentaccount6copyrights etc+

&o"inal Account: &o"inal or *ictitious accounts are accounts o* the e/penses and

loses and inco"e and gains which a concern earn in the course o* its ,usiness4

9inco"e account4accounts o* revenue6inco"e6gains etc

9E/penses account4accounts o* loses such as ,ad de,ts 6discount

allowed+


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)%LE! $3 DEB'T A&D #)ED'T

Personal Accounts:

De,it the receiver

and

credit the giver

)eal Accounts:

De,it what co"es in

and

#redit what goes out

&o"inal Account:

De,it e/penses and loses

and

#redit inco"es and gains


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J$%)&AL

; Acc to #ropper -A


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&E#E!!'T= $3 J$%)&AL

#onvenient recording o* transaction

Maintaining and preserving the identity o*

transaction

Ascertaining the true nature o* transaction

Maintaining per"anent record o*

in*or"ation


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3%T'$&! $3 J$%)&AL

To analyse each transaction into de,it and

credit so as to ena,le their posting in the

ledger

To arrange transaction 6chronological i+e

in order o* date+


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AD>A&TAGE! $3 J$%)&AL

; !how all necessary in*or"ation relating to

a transaction

; Provide the e/planation o* the transaction

; Date wise record o* all the transaction can

,e o,tained

; ?elp in locating and preventing the errors


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L'M'TAT'$&! $3 J$%)&AL

; )ecording all the transaction in a


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LEDGE)

; 't is the principal ,oo7 o* accounts where

si"ilar transactions relating to particular

person or thing are recorded

; Acc to cooper -ledger epito"i@es the

general operations o* principles o* ,oo7

7eeping.


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3EAT%)E! $3 LEDGE)

; Boo7 o* principal entry

; #lassi*ied and su""ari@ed record

; Posting


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ADVANTAGES

; Transactions relating to a particular person6 ite" or heading o*e/penditure or inco"e are grouped in the concerned account at

one place+

; hen each account is periodically ,alanced it re*lects the net

position o* that account+

; Ledger is the stepping stone *or preparing Trial Balance 4 whichtests the arith"etical accuracy o* the accounting ,oo7s+

; !ince the entries recorded in the


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It is a statement of all the balancesIt is a statement of all the balancesfrom the ledger and cash book on afrom the ledger and cash book on a

particular date.particular date.

Total debits should be equal to totalTotal debits should be equal to total

credits.credits.

Acc to carterAcc to carter trial balance is the list ofdebit and credit balances ,taken out fromledger it also includes the balances ofcash and bank taken from cash book

TRIAL BALANCE


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3eatureso* trial ,alance

; Particular date

; Agree"ent

; Arith"etical accuracy; Errors

; &ot conclusive

; Journalising and Ledger ,alancesrequired


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o,


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Adantages

;correct ledger balance

;!elps in preparation of final accounts

;Arithmetical accurac"

;errors are reealed

If the total debit is not equal to the credit#it reeals the presence of some errors during

the process of $ournalising or posting.


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Limitations of Trial Balance%

A Trial Balance does notnecessaril" proe that all the transactions

hae been recorded.

It also does not sho&s the profit n loss of thebusiness

It does not gie the information about eachaccount

There are some kinds of error that can still

cause the Trial Balance to balance and not

eas" to detect.


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Errors that can affect the Trial Balance'

Errors of calculation

Errors of omission of one entr"

(osting to the &rong side of an account

Errors in amount


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Errors not reealed b" the Trial Balance'

Errors of Commission

Errors of )mission

Errors of (rinciple

Compensating errors

Errors of )riginal entr"

Complete Reersal of entries


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Methods *or preparation o* trial

,alance; Total "ethod

Trail ,alance is

prepared ,y ta7ing

into account the totalso* de,it and credit

,alances o* each

account recorded in

the ledger+

; Balances "ethod

; Trail ,alance is "ade

on the ,asis o* the

,alances o* theaccounts+ it is also

7nown as net trial

,alance+


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22408925 journal ledger trial balance ppt

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