Presentation Transcript

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. 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:
7. FORMAT OF LEDGER: Dr. Cr.
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. Journal entry: 2010, April 1. Goods sold for cash Rs. 2,500 Dr. Cr. Now, lets see how the posting on ledger takes place:
11. CASH ACCOUNT SALES ACCOUNT
12. 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. Now lets see how the posting in ledger takes place:
13. CHARITY ACCOUNT SALARIES ACCOUNT
14. STATIONERY ACCOUNT CASH ACCOUNT
15. EXAMPLE: Question: Post the following transactions in the ledger of Imran: 2010 Rs. Jan. 1 Started business with cash 45,000 Jan. 2 Paid into bank 25,000 Jan. 2 Goods purchased for cash 15, 000 Jan. 3 Purchase of Furniture and payment by cheque 5,000 Jan. 5 Sold goods for cash 8,500 Jan. 8 Sold goods to ArvindWalia 4,000 Jan. 10 Good purchased from AmritLal 7,000 Jan. 12 Goods returned to AmritLal 1,000 Jan. 15 Goods returned to ArvindWalia 200
16. Jan. 18 Cash received from ArvindWalia Rs. 3,760 and discount allowed to him 40 Jan. 21 Withdrew from bank for private use 1,000 Withdrew from bank for use in the business 5,000 Jan. 25 Paid telephone rent for one year 400 Jan. 28 Cash paid to AmritLal in full settlement of his account 5,940 Jan. 30 Paid for: Stationery 200 Rent 1,000 Salaries to staff 2,500
17. CASH ACCOUNT
18. CAPITAL ACCOUNT
19. BANK ACCOUNT
20. PURCHASES ACCOUNT
21. FURNITURE ACCOUNT
22. SALES ACCOUNT
23. ARVIND WALIA
24. AMRIT LAL
25. RETURNS INWARDS ACCOUNT
26. RETURNS OUTWARDS ACCOUNT
27. DISCOUNT ACCOUNT
28. DRAWINGS ACCOUNT
29. TELEPHONE RENT ACCOUNT
30. SALARY ACCOUNT
31. RENT ACCOUNT
32. SALARIES ACCOUNT
33. THANK YOU