Table of Contents
Standard Form of Ledger Account:
To understand clearly as to how to write the accounts in ledger, the standard form of an account is given below with two separate transactions:
Date |
Particulars |
J.R |
Amount |
Date |
Particulars |
J.R |
Amount |
2005 |
Cash A/C |
1,200 |
2005 Dec. 17 |
Purchases A/C |
2,000 |
It appears that each account in the ledger has two similar sides – left hand side is called debit side (briefly Dr.) and right hand side (briefly Cr.) side. Now a days these two words are not used, because it is obvious that the left hand side is debit side and right hand side is credit side.
Self Balancing Form of Ledger Accounts:
In practice the standard form of the ledger account is not used. But it is usually used for examination purposes.
In practice, the self balancing form of ledger accounts is used. The advantage of this type of ledger account is that the balance of the account after each transaction is available at a glance from the last column. So, much time and labor is saved. In the following example self balancing ledger accounts have been used.
Example:
Enter the following transactions in journal and post them into the ledger and also prepare a trial balance.
| 2005 | |
| Jan. 1 | Mr. X started business with cash $80,000 and furniture $20,000. |
| Jan. 2 | Purchased goods on credit worth $30,000 from Y. |
| Jan. 3 | Sold goods for cash $16,000. |
| Jan. 4 | Sold goods on credit to S for $10,000 |
| Jan. 8 | Cash received from S $9,800 in full settlement of his account. |
Solution:
Journal
Date 2005 |
Particulars |
L.F |
DR. Amount ($) |
Cr. Amount ($) |
Jan. 1 |
Cash A/C |
5 |
80,000 |
|
Furniture A/C |
7 |
20,000 |
||
Capital A/C |
9 |
1,00,000 |
||
(Owner invested cash and furniture) |
||||
Jan. 2 |
Purchases Account |
11 |
30,000 |
|
Y |
13 |
30,000 |
||
(Bought goods on credit) |
||||
Jan. 3 |
Cash A/C |
5 |
16,000 |
|
Sales A/C |
15 |
16,000 |
||
(Sold goods for cash) |
||||
Jan. 4 |
S A/C |
17 |
10,000 |
|
Sales A/C |
15 |
10,000 |
||
(Sold goods on credit) |
||||
Jan. 8 |
Cash A/C |
5 |
9,800 |
|
Discount A/C |
19 |
200 |
||
S A/C |
17 |
10,000 |
||
(Cash received and discount allowed) |
Ledgers
Cash Account (No.5)
| Date | references | J.R | Debit | Credit | Balance | |
| 2005 | Dr. | Cr. | ||||
| Jan. 1 | Capital A/C | 5 | 80,000 | 80,000 | ||
| Jan. 3 | Sales A/C | 5 | 16,000 | 96,000 | ||
| Jan. 8 | S A/C | 5 | 9,800 | 105,800 | ||
Furniture Account (No.7)
| Date | references | J.R | Debit | Credit | Balance | |
| 2005 | Dr. | Cr. | ||||
| Jan. 1 | Capital A/C | 5 | 20,000 | 20,000 | ||
Capital Account (No.9)
| Date | references | J.R | Debit | Credit | Balance | |
| 2005 | Dr. | Cr. | ||||
| Jan. 1 | Cash A/C | 5 | 80,000 | 80,000 | ||
| Jan. 1 | Furniture A/C | 5 | 20,000 | 1,00,000 | ||
Purchases Account (No.11)
| Date | references | J.R | Debit | Credit | Balance | |
| 2005 | Dr. | Cr. | ||||
| Jan. 2 | Y A/C | 5 | 30,000 | 30,000 | ||
Y Account (No.13)
| Date | references | J.R | Debit | Credit | Balance | |
| 2005 | Dr. | Cr. | ||||
| Jan. 2 | Purchases A/C | 5 | 30,000 | 30,000 | ||
Sales Account (No.15)
| Date | references | J.R | Debit | Credit | Balance | |
| 2005 | Dr. | Cr. | ||||
| Jan. 3 | Cash A/C | 5 | 16,000 | 16,000 | ||
| Jan. 4 | S A/C | 5 | 10,000 | 26,000 | ||
S Account (No.17)
| Date | references | J.R | Debit | Credit | Balance | |
| 2005 | Dr. | Cr. | ||||
| Jan. 4 | Sales A/C | 5 | 10,000 | 10,000 | ||
| Jan. 8 | Cash A/C | 5 | 9,800 | |||
| Jan. 8 | Discount A/C | 5 | 200 | Nil | ||
Discount Account (No.19)
| Date | references | J.R | Debit | Credit | Balance | |
| 2005 | Dr. | Cr. | ||||
| Jan. 8 | S A/C | 5 | 200 | 200 | ||