Ledger Account n A device which contains a

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Ledger

Ledger

Account n A device which contains a systematic record of increase or decrease in

Account n A device which contains a systematic record of increase or decrease in an item during a particular period. n It has three parts: ¨ A title name of the accounts ¨ Left hand side which is usually called Debit side ¨ Right hand side which is usually called Credit side.

Dr Cash Cr

Dr Cash Cr

Ledger: The ledger is called the king of all books of account because of

Ledger: The ledger is called the king of all books of account because of original entry must be posted to the various accounts in the ledger. Ledger provide us the classified record of all transaction. n Ledger is also called the grouping of accounts.

n Ledger is a book in which every account is allotted a separate page

n Ledger is a book in which every account is allotted a separate page , and all the transactions relating to that account are written on that page in a summary form.

The following is the feature of Ledger: (1). It has two identical sides—left-hand side

The following is the feature of Ledger: (1). It has two identical sides—left-hand side and right--hand sides. The left hand side is called debit side and the right –hand side is called the credit side.

Specimen of ledger Date Particular J. F Amount

Specimen of ledger Date Particular J. F Amount

Transactions: n Started business with cash 50000$ n Purchased a car for 10000$ n

Transactions: n Started business with cash 50000$ n Purchased a car for 10000$ n Paid salaries for the month 2000$ n Purchased merchandise for cash 7000$ n Sold merchandise for cash 5000$ n Purchased furniture for cash 2500$ Required: Pass Journal entries and then post it to ledger n

Jan 1: Shabnam started business with cash 200000 Jan 3: Purchased a car for

Jan 1: Shabnam started business with cash 200000 Jan 3: Purchased a car for cash 50000 Jan 4: Purchased merchandise on account from Noori for 30000 Jan 7: Paid office rent 5000 Jan 15: Sold merchandise for cash 10000 Jan 20: Paid cash to Noori. Required: Pass Journal entries and post it to ledger.

March 15: Umer started a business with cash 90000$ March 17: purchased merchandise on

March 15: Umer started a business with cash 90000$ March 17: purchased merchandise on credit from Ahmad for 50000$ March 20: Salaries paid to workers 8000$ March 23: Returned merchandise to Ahmad worth 10000$. March 25: Paid telephone bill 3000 March 30: Sold merchandise for cash 25000 Pass journal entries and post them into ledgers

Trial balance is two column statement debit column and credit column. Trial balance is

Trial balance is two column statement debit column and credit column. Trial balance is used for the proof of the arithmetical accuracy of the journal and ledger. In trial balance we record all the debit balance of the ledger on the debit side and all credit balance on credit side. If the debit and credit side of trial balance agree its mean our journal and ledger is correct. continued…. n

In accounting we say (in balance) n And if the debit and credit side

In accounting we say (in balance) n And if the debit and credit side of trial balance is not correct it means (out of balance). Then we have to check once again carefully the journal and ledger of the firm. n

Company’s Name Trial Balance December 31, 2006 Description TOTAL 13 Debit Balance $ Credit

Company’s Name Trial Balance December 31, 2006 Description TOTAL 13 Debit Balance $ Credit Balance $

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