Procedures of Preparing Ledger Account

While posting the account from journal to the ledger, the rules of journalizing should be followed. Account debited in a journal should be also debited and account credit also credit in the ledger account. This note has information about the procedures of preparing ledger account.

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While posting the account from journal to the ledger, the rules of journalizing should be followed.
Account debited in a journal should be also debited and account credit also credit in the ledger account.

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Procedures of Preparing Ledger Account

The rules of journalizing should be obeyed while posting the account from journal to ledger. Account debited in a journal should be also debited and account credited should also be credited in the ledger account. The process of preparing the ledger account can be summarized as below:

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

B. 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.
Particulars: It records the name of reference account after writing the word'To'. The reference 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.

C. Post the account on its credit side if it has been credited in the journal. The last four columns 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:

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:

Purchase a/c
Siddhi's a/c
Cash a/c
Bank a/c
Sales a/c

Dr.			Purchase Account				Cr.
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

Dr.			Siddhi's Account				Cr.
Date	Particular	JF	Amount	Date	Particular	JF	Amount
Marga 5	To Cash a/c		5000	Marga 1	By Purchase a/c		5000
			5000				5000

Dr.			Cash Account				Cr.
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

Dr.			Bank Account				Cr.
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

Dr.			Sales Account				Cr.
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

Lesson

Ledger

Subject

Accountancy

Grade

Grade 8

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