1 ledger posting

It deals about the basic journal and ledger posting. It has the steps to be followed in order to do an effective ledger entry.

1. Journal and ledger posting

2. Some unusual transactions and
their journal entries

3. June 1, 2004 –Anjucontributed capital Rs.
50,000
Manjucontributed capital Rs.
70,000
50000
70000
Anju Manju
Capital

4. 17. June 1, 2004 –Anjucontributed capital Rs. 50,000
Manjucontributed capital Rs. 70,000
Journal

5. Jualy1, 2004 –Ajay contributed capital –Cash Rs.
90,000, Furniture Rs. 20,000
Vijay contributed capital –Cash Rs. 50,000
Stock Rs. 70,000
Ajay
cash
Furniture
Vijay

6. Journal
July 1, 2004 –Ajay contributed capital –Cash Rs. 90,000, Furniture Rs. 20,000
Vijay contributed capital –Cash Rs. 50,000, Stock Rs. 70,000

7. July 13, 2003 –Received cash Rs.24,700 from
Shanthiin full settlement of her account of
Rs.25,000.

8. July 13, 2003 –Received cash Rs.24,700 from Shanthiin full settlement of her
account of Rs.25,000.

9. 20.July 14, 2003 –Paid cash to Thenmozhis.14,500, in full settlement
of her account of Rs.15,000.

10. 21.JamunawhoowedusRs.10,000isdeclaredinsolventand
25%inarupeeisreceivedfromheron15thJuly,2003.
Insolvent:
Unabletomeetdebtsor
dischargeliabilities

11. What is bad debts?
The termbad debtsusually refers toaccounts receivable(or
trade accounts receivable) that will not be collected.However,
bad debts can also refer tonotes receivablethat will not be
collected.
The bad debts associated with accounts receivable is reported
on theincome statementas Bad Debts Expense or Uncollectible
Accounts Expense.

12. Journal
21.JamunawhoowedusRs.10,000isdeclaredinsolventand
25%inarupeeisreceivedfromheron15thJuly,2003.

13. Received cash for a Bad debt written off last year
Rs.7,500 on 18th January, 2004.
Insolvent Solvent

14. Journal
Received cash for a Bad debt written off last year
Rs.7,500 on 18th January, 2004.

15. Ledger posting

16. •ALedgerisabookwhichcontainsalltheaccountswhich
arefirstenteredinjournal.
•AccordingtoL.C.Cropper,‘thebookwhichcontainsa
classifiedandpermanentrecordofallthetransactionsof
abusinessiscalledtheLedger’.
•It’sapermanentrecordoftransactionsthatcannot
changed.
Ledger

17. Name of The Account
Dr. Cr.
Format of Ledger
Date ParticularsJFAmount
AED
Date ParticularsJFAmount
AED
Year
Month
Date
Accounts name Year
Month
Date
Accounts
name

18. •i. Each ledger account is divided into two parts. The left hand side is known as the debit side
and the right hand side is known as the credit side. The words ‘Dr.’ and ‘Cr.’ are used to
denote Debit and Credit.
•ii. The name of the account is mentioned in the top (middle) of the account.
•iii. The date of the transaction is recorded in the date column.
•iv. The word ‘To’ is used before the accounts which appear on the debit side of an account in
the particulars column. Similarly, the word ‘By’ is used before the accounts which appear on
the credit side of an account in the particulars column.
•v. The name of the other account which is affected by the transaction is written either in the
debit side or credit side in the particulars column.
•vi. The page number of the Journal or Subsidiary Book from where that particular entry is
transferred, is entered in the Journal Folio (J.F) column.
•vii. The amount pertaining to this account is entered in the amount column.
Explanation:

19. Theprocessoftransferringthe
entriesrecordedinthejournalorsubsidiary
bookstotherespectiveaccountsopenedin
theledgeriscalledPosting.
Posting

20. I. Procedure of posting for an Account which has been debited in the journal entry.
Step 1 →Locate in the ledger, the account to be debited and enter the date of the
transaction in the date column on the debit side.
Step 2 →Record the name of the account credited in the Journal in the particulars
column on the debit side as “To..... (name of the account credited)”.
Step 3 →Record the page number of the Journal in the J.F column on the debit side and
in the Journal, write the page number of the ledger on which a particular account
appears in the L.F. column.
Step 4 →Enter the relevant amount in the amount column on the debit side.
Procedure of posting

21. II. Procedure of posting for an Account which has been credited in the journal entry.
Step 1 →Locate in the ledger the account to be credited and enter the date of the
transaction in the date column on the credit side.
Step 2 → Record the name of the account debited in the Journal in the particulars column
on the credit side as “By...... (name of the account debited)”
Step 3 → Record the page number of the Journal in the J.F column on the credit side and
in the Journal, write the page number of the ledger on which a particular account
appears in the L.F. column.
Step 4 → Enter the relevant amount in the amount column on the credit side.
Procedure of posting

22. Example of Ledger and Posting

23. Journal
Mr. Ram started business with cash
Rs.5,00,000 on 1
st
June 2003.
Write the journal of this
transaction

24. Journal
Mr. Ram started business with cash
Rs.5,00,000 on 1
st
June 2003.

25. Try to find how many accounts
involved in the journal
Cash Account
Ram,sCapital
Account

26. For ledger posting draw 2 Ledgers
Cash Account
Ram,sCapital
Account

27. Name of Account
Dr. Cr.
Date ParticularsJFAmount
AED
Date ParticularsJFAmount
AED
Year
Month
Date
Accounts name Year
Month
Date
Accounts
name
Name of Account
Dr. Cr.
Date ParticularsJFAmount
AED
Date ParticularsJFAmount
AED
Year
Month
Date
Accounts name Year
Month
Date
Accounts
name

28. Write the name of Accounts at the
top of each ledger.
Cash Account
Ram,sCapital
Account

29. Cash Account
Dr. Cr.
Date ParticularsJFAmount
AED
Date ParticularsJFAmount
AED
Year
Month
Date
Accounts name Year
Month
Date
Accounts
name
Ram’s Capital Account
Dr. Cr.
Date ParticularsJFAmount
AED
Date ParticularsJFAmount
AED
Year
Month
Date
Accounts name Year
Month
Date
Accounts
name

30. Input the dates

31. Cash Account
Dr. Cr.
Date ParticularsJFAmount
AED
Date ParticularsJFAmount
AED
2003
June1
Accounts name Year
Month
Date
Accounts
name

32. Start Debit side with “To”
Start “Credit side with “By”

33. Cash Account
Dr. Cr.
Date ParticularsJFAmount
AED
Date ParticularsJFAmount
AED
2003
June1
ToRams
Account
Year
Month
Date
Accounts
name

34. Insert the amount

35. Cash Account
Dr. Cr.
Date ParticularsJFAmount
AED
Date ParticularsJFAmount
AED
2003
June1
ToRams
Account
500,000Year
Month
Date
Accounts
name

36. Sum up debit and credit side

37. Cash Account
Dr. Cr.
Date ParticularsJFAmount
AED
Date ParticularsJFAmount
AED
2003
June1
ToRams
Account
500,000
500,000
Year
Month
Date
Accounts
name

38. Adjust debit credit with
Balance Carried Down or
Balance C/d

39. Cash Account
Dr. Cr.
Date ParticularsJFAmount
AED
Date ParticularsJFAmount
AED
2003
June1
ToRams
Account
500,000
500,000
2003
June30Balance c/d 500,000
500,000

40. Carry forward the adjusted balance
Balance Brought Down or
Balance b/d

41. Cash Account
Dr. Cr.
Date ParticularsJFAmount
AED
Date ParticularsJFAmount
AED
2003
June1
July 1
ToRams
Account
Balance b/d
500,000
500,000
500,000
2003
June30Balance c/d 500,000
500,000

42. Rams Capital Account
Dr. Cr.
Date ParticularsJFAmount
AED
Date ParticularsJFAmount
AED
2003
June30Balance c/d 500,000
500,000
2003
June1
July 1
ByCash A/c
Balance b/d
500,000
500,000
500,000

43. Journalisethe following transactions in the books of
Amarand post them in the Ledger:-
2004
March1 Bought goods for cash Rs. 25,000
2 Sold goods for cash Rs. 50,000
3 Bought goods for credit from GopiRs.19,000
5 Sold goods on credit to Robert Rs.8,000
7 Received from Robert Rs. 6,000
9 Paid to GopiRs.5,000
20 Bought furniture for cash Rs. 7,000
Illustration 3.

44. Journal of Amar

46. There are six accounts involved:
•Cash,
•Purchases,
•Sales,
•Furniture,
•Gopi&
•Robert,
so six accounts are to be opened in the
ledger.

47. Cash Account
In the Books of Amar

48. Purchases Account

49. Sales Account

50. Furniture Account

51. GopiAccount

52. Robert Account

53. Thefollowingaretheadvantagesofledger:
i.Completeinformationataglance:
Allthetransactionspertainingtoanaccountarecollectedatoneplacein
theledger.Bylookingatthebalanceofthataccount,onecanunderstandthe
collectiveeffectofallsuchtransactionsataglance.
ii.ArithmeticalAccuracy
Withthehelpofledgerbalances,Trialbalancecanbepreparedtoknow
thearithmeticalaccuracyofaccounts.
iii.ResultofBusinessOperations
Itfacilitatesthepreparationoffinalaccountsforascertainingthe
operatingresultandthefinancialpositionofthebusinessconcern.
iv.Accountinginformation
Thedatasuppliedbyvariousledgeraccountsaresummarized,analyzed
andinterpretedforobtainingvariousaccountinginformation.
ADVANTAGES OF LEDGER

54. CompoundorCombinedJournalEntryisonewheremorethanone
transactionsarerecordedbypassingonlyonejournalentryinsteadof
passingseveraljournalentries.
Sinceeverydebitmusthavethecorrespondingequalamountof
credit,specialcaremustbetakeninpostingthecompoundjournalentry,
wheretheremaybeonlyonedebitaspectbutmanycorrespondingcredit
aspectsofequalvalueorviseversa.
Thepostingofsuchtransactionsisdoneinthesamewayasalready
explained.
Posting of Compound Journal Entries

55. Journal
Illustration 3 :
Jan. 12, 2003, Cash sales Rs.10,000, Cash received from
KannanRs.5,000 and commission earned Rs.2,500.