105 – MANASVI DHRUV

112 – KHAYATI GANDHI

119 – SHRADDHA KAPADIA

128 – DEVIKA PADH

136 - DHRUVIL SHAH

145 - SALONI SHAH

152 – YASH TRIVEDI

169 – CHARMI PABARI

LEDGER

WHAT IS A LEDGER?

A ledger is an accounting book that facilitates the transfer of all journal entries in a chronological sequence to individual accounts.

The process of recording journal entries into the ledger is called posting.

SALES LEDGERGENERAL

LEDGER

PURCHASE LEDGER

TYPES OF LEDGER

PURCHASE LEDGER

1. The purchase ledger is a sub ledger in which you record all purchases made by a business.

2. The purchase ledger contains the individual accounts of suppliers from whom the business has made purchases on credit.

3. The purchase ledger shows which purchases have been paid for and which purchases remain outstanding.

4. The purchase ledger will ordinarily hold a credit balance, unless credit notes or over-payments exceed the credit balance.

SALES LEDGER

1. The sale ledger is a sub ledger in which you record all sales made by a business.

2. The sale ledger contains the individual accounts of customers to whom the business has made sales on credit.

3. The purchase ledger will ordinarily hold a credit balance.

GENERAL LEDGER

§ The general ledger accumulates information from journals.

§ Each month all journals are totalled and posted to the General Ledger.

§ The purpose of the General Ledger is therefore to organise and summarise the individual transactions listed in all the journals.

Format of a ledger sheet

Date Particular JF Amount Date Particular JF Amount

Dr. Cr.

_____A/C

• The ledger page is actually a T-account in a more detailed format. It has the account title and its corresponding account number on top. It also has two sides, namely, the debit side and the credit side. Each T-account or ledger account has the following columns namely:

a. Dateb. Particularsc. Journal Foliod. Amount

EXPLANATION OF LEDGER ACCOUNTS

DEBIT SIDEo Date (debit side) - the date of the debit

entry is entered in this column.

o Explanation (debit side) - A brief explanation of the debit entry is entered in this column.

o “F” or folio (debit side) - The journal page number from where the debit entry was taken is entered in this column.

o Debit - The amount of the debit entry is entered in this column.

CREDIT SIDEDate (credit side) - the date of the credit entry is entered in this column.

Explanation (credit side) - A brief explanation of the credit entry is entered in this column.

“F” or folio (credit side)- The journal page number from where the credit entry was taken is entered in this column.

Credit - The amount of the credit entry is entered in this column

We will journalise the following transactions in the books of ABC Company and ledger accounts will be balanced on 15th August, 2008.2008Aug. 1 Purchase goods for Rs. 1,000.Aug. 10 Goods sold for Rs. 5,000

DATE PARTICULARS L.F DEBIT(Rs) CREDIT(Rs)

2008Aug. 1

Purchase A/C Dr. To Cash A/C (Being goods sold)

1000 1000

Aug. 10Cash A/C Dr. To Sales A/c (Being goods sold)

5000 5000

In the books ofABC Company

EXERCISE 1

LEDGER ACCOUNTS

Date Particulars JF. Amount (Rs)

Date Particulars JF. Amount(Rs)

Aug.1

Aug.16

To Cash A/C

To Balance b/d

1000

1000

1000

Aug.15 By Balance c/d 1000

1000

Dr. Cr.

Purchase A/C

Date Particulars JF. Amount (Rs)

Date Particulars JF. Amount(Rs)

Aug.1

Aug.16

To Sales A/C

To Balance b/d

5000

5000

4000

Aug.15

Aug.15

By Purchase c/d

By Balance c/d

1000

4000

5000

Dr. Cr. Cash Account

LIMITATIONS

Purchase as well as Sales are considered as a single account i.e. goods account.

It is easy when the number of transaction are less.

But if the organization is big and number of transactions are large, goods account Is opened with different names such as Purchase Account, Purchase Return Account, Sales Account, and Sales Return Account.

TRIAL BALANCE

Definition of 'Trial Balance'

A bookkeeping worksheet in which the balances of all ledgers are compiled into debit and credit columns.

A company prepares a trial balance periodically,

usually at the end of every reporting period. The general purpose of producing a trial

balance is to ensure the entries in a company's bookkeeping system are mathematically correct.

Types Of Trial

Balance

Balanced

TRIAL

BALANCEUNBALANCE

D TRAIL BALANCE

Balanced Trial Balance If all of your journal entries were posted properly in the general ledger, your debit grand total and credit grand total should balance, and you can move on in the accounting cycle. If the debit and credit grand totals do not balance, then you have an error to find somewhere in your transaction posting process. . Examples of problems that would not show up in the trial balance include: Putting the credit amount in the debit column and the debit amount in the credit column for a particular transaction;Recording a transaction in an incorrect account;Forgetting to record a journal entry as a general ledger transaction;Neglecting to make a journal entry at all.

Unbalanced Trial Balance If you have an unbalanced trial balance, then you have an error

somewhere in the accounting process. Examples of problemsthat can unbalance a trial balance include:

Adding the debits and credits for the trial balance incorrectly;

Putting the ledger account balances in the wrong debit/credit column in the trial balance;

Writing the wrong ledger account balances in the trial balance columns;

Miscalculating the ledger account totals;

Posting a journal entry incorrectly to the general ledger, whether using the wrong number or getting your debits/credits mixed up

ABC LTDTrial Balance as at 31 December 2011

Account TitleDebit Credit

$ $

Share Capital 15,000

Furniture & Fixture 5,000

Building 10,000

Creditor 5,000

Debtors 3,000

Cash 2,000

Sales 10,000

Cost of sales 8,000

General and Administration Expense 2,000

Total 30,000 30,000

Example:Following is an example of what a simple Trial Balance looks like:

LIMITATIONS OF A TRIAL BALANCE

A trial balance does not prove that all transactions have been recorded or that the ledger is correct.Numerous errors may exist even though the trial balance columns agree.The trial balance may balance even when:

A. a transaction is not journalized,B. a correct journal entry is not posted,C. a journal entry is posted twice,D. incorrect accounts are used in journalizing or

posting, E. offsetting errors are made in recording the

amount of the transaction.