Procedures of preparing ledger account

Posting the account from journal to the ledger, the rules of journalism should be followed. Account debited in a journal should be also debited and account credited should be also credited in the ledger account. The process of preparing the ledger account can be summarized as follows:

1. Mention the name of account at the top center.

2. Post the account on its debit side if it has been debited in the journal. The first four columns on debit side record the information as follows:

• Date: It records the date of the transaction.
• Particular: It records the name of reference account after writing the word 'To'. The referenced account is one, which has been credited in the journal.
• Journal folio(JF): It records the page number of the journal from which the account is being posted.
• Amount: It records the amount of the account being debited.

3. Post the account on its credit side if it has been credited in the journal. The last four column on credit side record the information as follows:

• Date: It records the date of the transaction.
• Particulars:It records the name of reference account after writing the word 'By'. The referenced account is one, which has been debited in the journal.
• Journal folio (JF): It records the page number of the journal from which the account is being posted.
• Amount: It records the amount of the account being credited.

Example 1:

The following are the transactions of Riddhi for the week of Baisakh:

Marga 1: Goods of Rs.10,000 purchased from Siddhi.

Marga 3: Withdrew cash of Rs.7000 from the bank.

Marga 5: Cash of Rs. 5000 paid to siddhi.

Marga 7: Cash sales made for Rs. 500.

Required

a) Journal entries

b) Ledger account

Journal Entries

Date	Particular	L.F	Debit Rs.	Credit Rs.
Marga 1	Purchase a/c.............................Dr.		10,000
	To Siddhi's a/c			10,000
	(Being goods purchased from Siddhi)
Marga 3	Cash a/c....................................Dr.		7000
	To Bank a/c			7000
	(Being cash withdrew from bank for office use)
Marga 5	Siddhi's a/c................................Dr.		5000
	To Cash a/c			5000
	(Being cash paid to siddhi)
Marga 7	Cash a/c...................................Dr.		500
	To Sales a/c			500
	(Being cash sales)
	Total		22,500	22,500

 

As per journal entries shown above the following accounts are required to open in the ledger:

1. Purchase a/c
2. Siddhi's a/c
3. Cash a/c
4. Bank a/c
5. Sales a/c

Purchase Account

Date	Particular	JF	Amount	Date	Particular	JF	Amount
Marga 1	To Siddhi's a/c		10,000	Marga 30	By balance c/d		10,000
			10,000				10,000
Poush 1	To balance b/d		10,000

Siddhi's Account

Date	Particular	JF	Amount	Date	Particular	JF	Amount
Marga 5	To Cash a/c		5000	Marga 1	By Purchase a/c		5000
			5000				5000

Cash Account

Date	Particular	JF	Amount	Date	Particular	JF	Amount
Marga 3 Marga 7	To Bank a/c To Sales a/c		7000 500	Marga 5 Marga 30	By Siddhi's a/c By Balance c/d		5000 2500
			7500				7500
Poush 1	To Balance b/d		2500

 

Bank Account

Date	Particular	JF	Amount	Date	Particular	JF	Amount
Marga 30	To Balance c/d		7000	Marga 3	By Cash a/c		7000
			7000				7000
				Poush 1	By Balance b/d		7000

 

Sales Account

Date	Particular	JF	Amount	Date	Particular	JF	Amount
Marga 30	To Balance c/d		500	Marga 7	By Cash a/c		500
			500				500
				Poush 1	By Balance b/d		500