CHAPTER Learning Objectives After reading this chapter, you will be able to: Understond the meaning of Ledger and its purpose Know the different types of Ledger Balance the ledger accounts Identify the differences between Journal and Ledger Understand the meaning of Trial Balance Recognise Personal, Real and Nominal Accounts Understand the methods of preparation of Trial Balance > Prepare Suspense Account Know how to Prepare Ledger Accounts and Trial Balance AT) teooen Ledger is also an important book of Account. Ledger is a book in which personal, real and nominal accounts are maintained in a summarized and classified form. In other words, it is a book containing accounts to which debits and credits are posted from books of original entry. Ledger is a combination of all accounts and is a permanent record. Ledger is also known as the principal book of accounts as well as the book of final entry. The Purpose of preparing the ledger is to: + Summarise the transactions for each account at one place + Determine the debit or credit balance of each accountajs and liabilities row the assets a a eg ve preparation of Trial Balance WH Leas Hes anil statements NT =aGa) proronma of Lepaen Acco” | a To name of the want to be debited all the business concerns. usually followed in almost tions. . followed normally in banking institu Type lis Type Wi 3 | Sue-pivision oF LEDGER In a big organisation, numerous transactions take place and it w difficult to enter all the transactions in one book. There is a poss ‘committing errors if all the transactions are entered in a single b also be difficult to trace out a particular transaction in future. In ‘out, the following ledger accounts will be maintained: + Debtors’ Ledger * Creditors’ Ledger * General Ledger rs’ Ledger Debtors’ i f is also kn 5 infe ; lown as Sales Ledge n gto edger, Debtors’ Ledge Entries E Customers to whom the goods are sold the led; iger from Sales Day book, Sales Returns > a2 creditors contains pought ¢ purchas‘ > 4.3.3 General records 44 Transf known the jot record accou! post t > 44 Allle perio out t of th acco is sa the c wheLedger and Trial Balance 43 Creditors’ Ledger ys Ledger is also known as Purchase L Cris information relating t0 suppliers from whom th ron credit. Entries are made in the ledger from Purchase purchase R 4.3.3 General Ledger general Ledger is also known as Impersonal Ledger o Scordsall the transactions relating to real and nominal nature. Z| Postinc or Accounts _ edger. Creditors Ledger he goods have been pay Book, turn Book and Cash Book. 1 Nominal Ledger. It from the journal to the ledger is sransferring the debit and credit balances f known as Posting of Aci recorded in the debit column of the journal is posted to recorded in the credit co ceount in the ledger. A separate ledge post transactions relating to personal, real and nominal ace counts. The amount the debit side of an account in the ledger. Amount umn of the journal is posted to the credit side of an + account will be opened in order to sounts. > 44.1 Balancing of Ledger Accounts Josed and balanced at the end of an accounting period. Once the transactions for a period are recorded, itis necessary to find out the balance in the ledger account. The debit balances and credit balances of the accounts will be totalled in order to ascertain the net balance of the accounts. This process is known as Balancing of Ledger accounts. An account is said to have a debit balance where the total of the debit side exceeds that of the credit side. On the other hand, an account is said to have a credit balance where the total of the credit side exceeds that of the debit side. Allledger accounts are usually c! Distinction between Journal and Ledger Journal [aaa Journal is known as the primary book of | Ledger i i iger is known as the principal book accounting or the book of original/first | of accounting or the book ofa entry. Journal is prepared out of transaction | Ledger i ger is prepared wi proofs such as vouchers, receipts, bills, | journal itself. It is a as i ap of 3 after recording a journal, a4A Financial ‘Accounting transactions related gnting where “Journal is a book fa ily records of busine transactions | 8 sh first recorded in @ * nrenological | particular Persone thing are maintai anger ie in the onder of dates ina summarized form. Journal may be subdivided iM cash | Ledger may be sub-divided took. a sales day book, sles return day | ledger, debtors’ led ook, purchases day books puretases | purchases ledEer fram day book, B/R Books BI P Book, Petty Cash Book: 45 | TRIAL BALANCE pit balances and credit b: Trial Balance is @ statement, which shows det grail accounts in the ledger. Since every debit should have a corresp: ret, as per the rules of double entry system, the total of the debit ba gnd credit balances should tally (agree). In case there is a difference, ‘the balances brought forward from the res to check the correctness 0: counts. Trial Balance can be prepared on any date, provided ac balanced. ) 45.1 Definition itement, prepared with the debit and credit bala “Trial Balance is a sta Jedger accounts to test the arithmetical accuracy of ledger postings JR. Ba > 45.2 Format ‘Trial Balance of ABC Ltd. as on. S.No, G ‘Name of Account LF Debit | < @ | z RATION 1: following items into Personal, Real and Nominal Acco! w Outstan (e) Cash (fp Rent (g) Interes (h) Indian (i) Disco @ Buildi Solution: (a) Perso (b) Real: (c) Perso (a) Persc (©) Real (®) Nom (g) Non (h) Pers @ Nor @ Rea & ius State whe Debit coh (a) Ca (b) Cr (©) Sa @ Fu (©) Ce (f) De (g) Pu h) C.45 Ledger and Trial Balance (@) Outstanding Salary (e) Cash (p Rent (g) Interest paid (h) Indian Bank (i) Discount Received () Building Solution: (a) Personal Account (b) Real Account (©) Personal Account (d) Personal (Representative) Account (©) Real Account (® Nominal Account (g) Nominal Account (h) Personal (Legal Body) Account (i) Nominal Account (j) Real Account » ILLUSTRATION 2: State whether the balances in the following accounts should be placed in Debit column or Credit column of the Trial Balance. (a) Cash (b) Creditors (c) Sales (d) Furniture (c) Commission Received (f) Debtors (g) Purchases h) Capitalae Paid it Balance oy cred }, Credit Balance {a Debit Balance {e Credit Balance (p Debit Balance {q) Debit Balance (h) Credit Balance (@ Debit Balance (j Debit Balance eS ALLUSTRATION 3: ‘Te fllowing balances were extracted fFO7) the ledger of Ravi c ‘009, You are requested to prepare © ‘Trial Balance as on tha Te @ ie. Salaries 300 |Pochascs Sales 1,73,500 _| Sundry Debtors ney ee B® Travelling Expenses ; . Carriage Inward Stock 0001.04.2008 | 11,100 _ | Capital on 01.04.2008 Solution; a len Balance of Ravi as on 31.03. mies LF) Debit | Credit 1 [Salaries ®) @ | dy 2 Isto i 36,320 By inal ‘ad a |Nominal Alc 3 | g S| 1073,500 |Reat A’c- 2 : - — |Real Ale - asse@) 670 860 630 500 Ledge and Trial Balance ad 7 ised | 5 11,100 Real Ale - goods 6 [Purchases 144,670 Real A/c - goods > [Sundry Debtors 4,860 Personal A/e ~ customers travelling Expenses Carriage Inward Capital 01.04.2008 © ILLUSTRATION 4: ‘The following balances were extracted from the leds TRS March 2012. You are requested to prepare a Trial Balance a in the proper form. 00 |Personal Nominal A/e - expense Nominal A/e - expense Ale - owner ger of Suman on ‘on that date ®@ | @ ‘Sundry Creditors 18,260 Repairs 1,670 ‘Sundry Expenses 1,370 Drawings 3,500 Returns Inward 1,000 Cash at Bank 1,090 Discount Allowed 1,150 Returns Outward Rent and Rates 3,220 Investments Solution: ‘Trial Balance of Suman as on 31.03.2012 S.No. Name of the L.F\ Debit Credit Nature of Balance Account @& @ (Why Dr. or Cr.) 1 |Sundry Creditors 18,260 [Personal A/c - suppliers 2 |Sundry Expenses 1,370 — |Nominal A/c - expense 3 Returns Inward 1,000 — Real A/c - goods. 4 [Discount Allowed 1,150 — |Nominal A/c - loss 5 |Rent & Rates 3,220 — |Nominal A/c - expense 6 [Repairs 1,670 — |Nominal A/c - expense 7 [Drawings 3,500 — _ |Personal A/c - owner 8 — [Cash at Bank 1,090 — Real Alc - asset 9 |Returns Outward - 740 |Real A/c - goods 10 {Investments 6,000 — Real Ale - asset I 19,000 | 19,000ap Finanelel ecow coy, LUsTRATION * 41% December 2012, from the fo i x solution 1671 salaries a pills Payable , s ; \ gales Returns Commission Ree 40 Carriage Iw 6 stock Solution: wo sana Interest Rec Name of the Account rn Purchases | re Printing & co Machinery Bill Receivable oe Electricity Insurance . | otal Creditors Salaries se & niu ‘Commission Received Mrs. Chi : Capital > ILLUSTRATION 6: . | Machit ‘Wages Bad D e a Trial Balanes eas on 31 31" October 2012 from the followin Purchases Purchases Return. Printing & Stationery |Ledger ond Trial Bolonce #9 Triat Batance of Senthil ns on 31.10.2012 ae am Tek] eT “Credit ” | @ ie] i 1 —ia7300 saben | ss camiage Inwants 1400 | Wages 5,000 | Interest Received | 2,100 purchases | sao | - Purchases Return 5 2,700 Printing & Stationery 5,000 = Machinery 50,000 Rent 1,600 = Electricity Changes 2,400 Total 1,92,700 1,92,700 ILLUSTRATION 7: Prepare a Trial Balance as on 31" March 2010, from the books of Mrs. Chandini. ®@ | “Capital 2,49,000 | Drawings General Expenses 97,000 _ | Buildings Machinery 1,18,680 | Opening Stock Wages 14,400 | Insurance Bad Debts 1,100 | Creditors Sales 330,720 | Loan (Cr) 75,000 Commission (Dr) 5,500 | Purchases 2,10,800 : Bills Payable 7,700 | Reserve Fund 15,000 ; Bank Overdraft 28,600 | Cash in Hand 25,320 Discount Allowed 1,210‘10 Financial Accounts Solution _ of Chandint as on 31.03.2010 Machinery Income Tax Freight Bank Loan : aT Capital 97,000 General Expenses 1,18,680 Machinery 14,400 wages 1,100 pad Debts Sales 5,500 Commission (D1) Bills Payable Overdraft , = it Allowed ae ey 24,000 neg 78,000 Buildings : 00 ‘Opening Stock 1,32,4¢ 2,610 (Creditors — Loan (Cr) . Purchases: 2,10,800 Reserve Fund “o (Cash in Hand 25320 ‘Total 7,11,020 ILLUSTRATION 8: a Tris fi PrepareaTrialBalanceason31* March 2011, fromthe books« Rent sundry Expense pills Receivabl Carriage Outwa Solution Sundry Cr Bills Rece Furniture Carriage ( Capital Insurance Stock Bills Pay Drawing Total —.polonce 414 Ledger and Trial 1,500 spay Ppenses nen | eC | Secs | $2800 | orto : veiage war ¥'s00 | Capital | ne . on 2,800 Stock 30,000 insure a oe __74,400 Solution. Name of the Account 2,15,400 Discount Re — 1,000 Income Tax 9,500 ~ Discount Allowed 950 — ight 3,500 ~ Sales — 3,35,350 Bank Loan = 1,20,000 Rent 72,500 Printing Charges 1,500 at ‘Sundry Expenses 21,000 Sundry Creditors = 75,000 Bills Receivable $2,500 0 Furniture 33,000 Carriage Outwards 1,500 - Capital : Insurance 2,800 i Biome 30,000 a Bills Payable _ aan F Dewees 74,800 _ , Ti we 814,650 314,650Ae Financial Accounlin? eq, HLUSTRATION 9: 1 Balance as 0" in 31% Decembs Prepare a Trial Opening Stock Cash in Hand iscount Farmed 790 | Furniture & Fittings Commission Paid 1,500 | Loan from Shameem prawings Travelling Expenses ¢.000 | Bills Receivable Reserve for Dow! Parchases Retum 1,500 | Sundry Debtors “total - Sales Retum. Bills Payable Sundry Creditors ep ILLUSTRAT Capital a Drawings prepare a Trial Reserve for Doubtful Debts yy Drawings Acc Capital Accou Solution: ‘Trial Balance of Fathima as on 31.12.2013 Sundry Credit ‘Name of the Account LE Debit ] Credit Bills Payable ® | z Sundry Debt Cash in Hand 7,500 7 Bills Receiv: ‘Discount Earned ae. 8 Loan from S ‘Commission Paid Tet | Fixtures & F Speneing Exyienscs ae | Stock at Cor Purchases Return | Cash in Off Sales Retun _ | Cash at Ind ae 750 | Cash with Le 15,000 | Purchases _ | 5 Duty and ( 22,000 Ses 3,500 ale Goods Re 18,500 Goods Re 5,700 Commiss b 20.¢ Trade Ex Rent Pai 10,000413 Ledger ond Thal Balance 9.50 Sandy Debtors 9,500 10,000 J Payable bee 20,700 18,000 sundry Creditors pital Capita 5,000 prawings 3,000 sve for Doubifiul Debts o 5, ILLUSTRATION 10: From the following balances extracted from the ledger, You are required to pare a Trial Balance as on 31° March 2015. @ ‘Drawings Account 11,600 Capital Account 48,000 Sundry Creditors 86,000 Bills Payable 8,000 Sundry Debtors 1,02,000 Bills Receivable 10,400 Loan from Sai & Co. 20,000 Fixtures & Fittings 9,000 Stock at Commencement 94,000 Cash in Office 1,800 25,000 12,000 1,00,000 7,000 2,56,000 19,000 2,000 2,200 Cash at Indian Bank Cash with State Bank Purchases Duty and Clearing Charges Sales Staff Salaries Goods Returned by Customers Goods Returned to Suppliers Commission and Travelling Expenses 9,400 Trade Expenses act Rent Paid 3 000 8,000rinmeciat Aeeoentind a Recs ” vee as on 31.03.2015 ett re is tr al Tr ae }aernd. - ips tecou .' th : enon ® ot olan 11,600 , eeount. rawing Accom apna Account m ey, wustRA sundry Creditors 6 ' ie pits Payable | ' —— Sundry Debtors 1,02,000 s | —S Bills Receivable 10,400 nail Loan from Sai & Co. 20,004 ’ purchases Fixtures & Fittings 9,000 | pank Overdt Stock at Commencement 94,000 Rent Paid Cash in Office 1,800 : Discount Ea (Cash at Indian Bank 25,000 ' Drawings Cash with State Bank 12,000 ' oe o Purchases 1,00,000 : ‘Sundry Cre Duty and Clearing Charges tee Bills Payat Sales ° Sundry De Staff Sal - i salaries 19,000 Solution: Goods Returned by Customers | Rieg: 2,000 FE ‘etummed to Suppliers 7 | F na ‘ommiss ion and Travelling Expenses a | | ‘Trade Expenses " Sales Rent Paid 5.000 | | Advertisement 4,000 | j Total [|__ 8,000 | [420,200 70,200 Suspense Account When itis di ifficult to 1 locate th ah inthe Trial Baan before preparing the final acc account is transferred to a newly opened ima toa “Suspen: void the delay in the Ise Account’. Suspense acco Preparation of final accounts. If the.es of the Trial Balance © jit balane arene is transferred to the credit it balances 0 hand, if the total ered jovit balances, the difference IS tran account nsfet & MLUSTRATION TT: Ledger and Tri xcved the total credit ide of the suspense 4 f the Trial Balance rred h 2015 J to the debit side o from the books of Mrs. Betsy al Balance 4-15 balances, the sount, On the e exceed the total f the suspense prepare a Trial Balance as on 31° Mare @ _| @ Gales 10,80,000 _ | Trading Expenses 25.000 Parchases 7,08,000 | Cash at Bank 25,000 Bonk Overdraft 60,000 | Commission Paid 1,000 Rent Paid 20,000 | Plant & Machinery 45,000 Discount Earned 5,000 | Purchases Return 11,000 Drawings 60,000 | Bills Receivable 52,000 Capital 2,40,000 _| Sales Return 10,000 Sundry Creditors 4,30,000 | Opening Stock 3,70,000 Bills Payable 40,000 _| Salaries 95,000 ‘Sundry Debtors 4,00,000 _| Cash in Hand 13,000 Solution: Trial Balance of Betsy as on 31.03.2015 Name of the Account LE Debit Credit (i) @. = 10,80,000 7,08,000 20,000, 60,000 60,000 5,000 2,40,000 430,000 40,000 (Contd)Trad cash at Bank snmission Paid & Machinery Purchases Retr pills Receivable sales Return Opening Stock Salaries Cash in Hand Total 31* December 2016. a6 Finore' Suspense Ale (Bal. fig.) Note: The difference in the Trial Balance is trans! fi to avoid delay in the preparation ILLUSTRATION 12: Prepare a Trial Balance 25,000 1,000 52,000 10,000 3,70,000 95,000 | 13,000 | 42,000 18,66,000 18,66,000 ed to suspense of final accounts. from the following balances of Mr. Kart @ | S (Cash in Hand 50,000 | Capital &4 Cash at Bank 1,69,400 Building | ¢ Salaries 1,88,000. Machinery | Rent 96,000 | Furniture Commission Paid 2,800 | Motor Car Rates and Taxes 5,200 | Purchases e Debis 6400 | Sales 3 eo 4800 | Sundry Debtors eral Expenses 1,600 | Rese F eserve for Doubtful Sundry Creditors 1,36,000 ed 364 Opening Stock 1,72. Insurance General Exper sundry Credit Capital Building Machinery Fumiture Motor Car Purchases Sales Sundry De Reserve fo Opening s Suspense Total S&S iw Shaam ¢ Trial Ba BalanceLedger ond TH 16 at edit @ 50,000 169,400, 1,88,000 96,000 2,800 5,200 6,400. 4,800 1,600 2,30,000 1,20,000 jal Balance Furniture 22,000 Motor Car 136,000 i Purchases 1,88,000 Sales = 3,92,000 Sundry Debtors 32,400 & Reserve for Doubtful Debts — 14,600 ‘Opening Stock 1,72,000 _ Suspense A/c (Bal. fig.) = 42,000 Total | 14,24,600 | 14,24,600 AAT Credit © SS ILLUSTRATION 13: ‘of Karachi is not an expert in accounting. He prepared the following . You are requested to correct it and prepare a corrected Trial448 Financial Accounting mawom | oF ~ Debit |__| @ sale | sales Return | 2 Drawings | 11,280 | | «| Sundry De | ¢ _ | Frechold Premises 14,820 | 25 3 | Parchases | 25200 | Return Outwards | 5,280 | Loan from Sharma 10 | Sundry Creditors | 10,560 1 | Administration Expenses | 15,680 32 | Cash in Hand | 2,840 13. | Bills Payable | 2,000 4 | ‘Wages | 11,960 15 | Opening Stock 9,300 16 | Factory Expenses 1,09,080 | Solution: Corrected Trial Balance 09,081 Name of the Account LF Debit ® Capital = 1,960 11,280 10,600 14,820 25,360tial Balance MAF 10,500 ‘sun adminis in Hand 11,960 280 ~ 9300, actory Exe” 09,080 1,09,080 HLLUSTRATION 14: abu of Thiravallur is not Trial Balance, You are req) counting. He prepared 1 expert in ac nd prepare @ ested to corrected it an ae __ Debit | Credit Gt Name of the Account Interest on Investments 2,000 28,000 — 28,000 Carmiage inward Loan from Ashok Manufacturing Expenses 28,000 i Purchases 56,000 | Sales 88,000 — 24,000 Bank Overdraft Creditors Debtors 16,000 pk 20,000 40,000 Commission Earned Discount Received Carriage Outwards 4,000 Capital 44,000 Sales Returns 16,000 Establishment Expenses 24,000 a (Contd.)420 Finoncial Acco! qs | Wages 19 | Purchase Return Cash in Hand Solution LF me of the Account FFierest on Investments Carriage Inward Loan from Ashok Manufacturing Expenses Bank Overdraft ed Trial Balany ] 16,000 | 8,000 2,26,000 2,000 28,000 56,000 16,000 20,000 40,000 4,000 16,000 24,000 16,000 4,000 4,00 2,26,000 28,00¢ 24,00 2,26,000 jtior fe must sournalise | prepare the Date —pi.01 20 95.01.20 97.01.24 10.01.21 12.01.2 15.01.2 20.01. 22.01. 25.01 ol Solutic Dr. 01.0tedger and Trial Balance as of Journal, Ledger and Trial Balance eq HLUSTRATION 15: Jouratise the following tr rsactions and post them into Ledger accounts and repare the Trial Balance as on 31.01.2008 in the books of Karthik ti = —pa | H mount pate Particulars b ot ; "Karthik commenced business 1,00,000 80,000 14,000 6,000 70,000 30,000 40,000 30,000 20,000 10,000 (95.01.2008 Goods sold for cash (07.01.2008 Commission received 10.01.2008 Interest received 12.01.2008 | Purchased goods for cash 15,01.2008._ | Rent paid 90.01.2008 | Salaries paid 32.01.2008. | Karthik withdrew cash for personal use 501.2008 | Purchased furniture for cash 37.01.2008 _| Printing and stationery expenses paid Solution: Journal Entries in the Books of Mr. Karthik Dr ‘Commenced the Business cr. Credit Date Particulars Debit @. ®. 01.01.2008 | Cash A/c Dr. | 1,00,000 To Karthik’s Capital A/c (Being capital introduced by Karthik.) 1,00,000 Goods Sold For Cash Date Particulars 05.01.2008 Cash A/c To Sales A/e (Being goods sold for cash)Dr 492 Financial Acco unting Commission Recelved el Partcutars | ben] pr ate | cing commission re — Dr. a Date [Deni pr. - pk e Date Cash Ale Dr.| 6,000 es | To Interest Received A/e 25.012 (Being interest received in cash) = Dr Goods Purchased for Cash a De Date Particulars Debit c —D. ® 72.01.2008 | Purchase A/c 70,000 | 01 To Cash A/c (Being goods purchased for cash) ll Date Particulars | debi | Ledgi : ees | ®@ Dr. eezees | Rent Alc Dr.| 30,000 D To Cash A/c | — i ee 31 (Being rent paid in cash ) | a Dr. Salaries Paid Particulars ] Debit Santa | @ Ly lc ae Dr. | 40,000 To Cash Ale | x : 8 salaries paid in cash )ledger —sm12008 | Drawings A 3201.2008 | Furniture A/c To Cash Ae Dr Date Particulars Printing & Stationery Expenses Paid As ond Trial Balance cr. pit | Credit Debit | ‘ @ Dr. | 20,000 20,000 (Being furniture purchased for cash ) Cr Debit | Credit © |e —Foi2008 | Printing & Stationery A/c To Cash Ale (Being printing & stationery expenses paid) Ledger Accounts Dr. Karthik’s Capital Accow 10,000 | 10,000 nt Cr. Date Particulars. | Amount | Date @. Particulars Amount ® 31.01.2008 |To Balance c/d| 1,00,000 {01.01.2008 (Bal. fig.) 1,00,000 By CashAle | 1,00,000 | 1,00,000 By Balance b/d | 1,00,000 Dr. Sales Account Cr. Date Particulars Amount Date @ Particulars Amount 31.01.2008 |To Balance ed 80,000 | 05.01.2008 |By Cash A/c (Bal. fig.) 80,000 By Balance b/d494 Finonel ol Accounting jission Account Commi punt br. __———T_ pate | Particulars | Am Spanien | Amount 701.2008 | By Cash A/c 146 31.01.2008 Ff Balance ed 14,000 |0 ica | cpa. fig) 75.120 14,000 14,00 | By Balance b/d | 14,99, a ——— : Account ae 4 Tne Particulars pr Date | Particulars ae Di eh “ ticular Ba 4) 01.2008 | To Balance © 6,000 | 10.01.2008 |By Cash A/c (Bal. fig.) 20.1 6,000 6,00 By Balance b/d | 6 Dr. Cash Account a Due | Particulars | Amount | Date | Particulars i @ 71.2008 | To Karthik’s 12.1.2008 | By Purchase Capital 1,00,000 51.2008 | To Sales 80,000 | 15.1.2008 | By Rent 71.2008 | To Commis- 20.1.2008 | By Salaries sion Received | 14,000 10:12008 | To Interest 22.1.2008 | By Drawings = Received 6,000 25.1.2008 | By Furniture a 27.1.2008 | By Printing and ’ Stationery 2,00,000 5 0 Dn = a) aa D articulars | A _ = (mor a Date Particulars j 70, 4 r 000 | 31.1.2008 | By Balance e/d| 70 > (Bal. fig, ae 5) 70,"ee ond Trial Blanes As ei Rent Account a vount | varticulars moun! paw | ? ha 30,000 Leda @. 311.2008 | By Balance e/d | 30,000 | fo Cash Ave c cute. | | 30,00 30,000 ila Batance b/d | 30,000 | farticulars | Amount 5 Account Fariculars | Amount | Date oe | To Gash Ale 31.1.2008 | By Balance c/d | 40,000 40,000 (Bal. fig.) - 40,000 L | To Balance b/d \ Drawings Account cr. Particulars | Amount | Date Particulars | Amount @ 30,000 | 31.1.2008 | By Balance c/d (Bal. fig.) To Cash Ale 30,000 To Balance b/d | 30,000 Dr. Furniture Account Date Particulars Amount Date (i) Particulars bee ®@ To Cash A/o 20,000 | 31.1.2008 By Balance c/d 20,000 (Bal. fig.) 20,000 20,000 25.1.2008 To Balance b/d | 20,000 Dr. Printing and Stationery Account Cr Date | Particulars | Amount | Date Particulars | Amount @ ® 7712008 |To Cash Ale | 10,000 | 31.1.2008 | By Balance e/a | 10,000 (Bal. fig.) 10,000 10,000 ‘To Balance b/d | 10,000Accounting 38 Finonctal svat atance of Mr Karahi so STAM ; ———T ben |G } = | jonery |__ 10,000 Printing & Stat Total 000 2 © ILLUSTRATION 16: Joumalise the following transactions and prepare the ledger a Trial Balance in the books of Mr. X. also prepare a Date Particulars prni2009 | X's commencement of business with cash 04.01.2009 | Sold goods to Ram for cash 198,01.2009 | Purchased goods for cash 10.01.2009 | Rent paid 12.01.2009 | Fumniture purchased for cash 14.01.2009 | Commission received 18.01.2009 | Salaries paid 24.01.2009 | Telephone charges paid 25.01.2009 | Travelling expenses paid Solution: Journal Entries in the Books of Mr. X Commenced the Business Particulars To X's Capital A/c Being caning (Beng cept insoduced by X yn 31.1.2008 yr pe ae o pq a 12.Ledger ond Trial Batance AS cr Goods Sold for ‘Cash ——m rors — Debt | Credit Particw mS © : De | 40,000 Gash Afe 40,000, To Sales Ae Lense sent et tt — Goods Purchased for Cash mm. Dare Particulars 1 es = —qe07.2009 | Purchase Dr. | To Cash Ale (Being goods purchased for cash ) a Rent Paid Cr. Date Particulars Debit Credit @ @. 70.01.2009 | Rent A/e Dr.| 20,000 To Cash Ale 20,000 | (Being rent paid) Dr. Purchased Furniture for Cash cr. Date Particulars Debit | Credit @. @. 12.01.2009 | Fumiture A/c Dr.| 40,000 To Cash Ale 40,000 (Being furniture purchased) Dr. ‘Commission Received cr Date Particulars Debit | Credit ® ® a 14.01.2009 | Cash A/c Dr.| 10,000 ‘To Commission A/e 10,000 (Being commission received)‘etephone Charges Paid Dr. etep! 2 e Particulars 34.01.2009 | Telephone Charges A/c To Cash Ale (Being telephone charges paid) _1 | Being telephone ee Travelling Expenses Paid | Debi ze @ 25.01.2009 | Travelling Expenses A/c Dr.| 10,000 To Cash A/c | (Being travelling expenses paid ) Date Particulars Ledger Accounts Dr. Capital Account — Date | Particulars | Amount | Date | Particulars Dr ®. _| Dat 31.01.2009|To Balance c/d| 1,20,000 |01.01.2009|By Cash A/c (Bal. fig.) | 812 1,20,000 | |By Balance b/d De Sales Account a Dat — = | Particulars | Amount | Date | Particu i 31.01.21 a t ae -01.2009|To Balance e/d| 40, | = 000 | 04.01.21 sh 10. (Bal. fig) )4.01.2009| By Cash A’c 0.Ledger ond Trial Balance Ca Commission Account cr & Fama] Amonm | Dare | Particulars | Amann 0 74101-2000 |By Cash Ale 8 [10.000 jeer nce mia | 10,000 _ « ce Cash Account 23 De —— Pe] Particulars | Amount | Dare | Partiewlars | Avot r 0) ant —— Fo X's Capital | 1,20,000 |8,1.2009 By Purchase 30,000 41,2009 |To Sales 40,000 |10.1.2009 [By Rent 20,000 - 141.2009 |To Commission 12.1.2009 {By Furniture 40,000 Received 10,000 - 18.1.2009 |By Salaries 30,000 124.1.2009 |By Telephone Charges 10,000, 25.1.2009 |By Travelling Expenses 10,000 31.1.2009 | By Balance c/d 30,000 (Bal. fig.) 1,70,000 1,70,000 To Balance b/d| 30,000 Dr. Purchase Account cr % | Date Particulars | Amount | Date Particulars | Amount | @ (an | #12009 To Cash Ale | 30,000 | 31.1.2009 | By Balance c/d| 30,000 0 | (Bal. fig.) . 00 | 30,000 30,000 | ‘To Balance b/d| 30,000 Dr. Rent Account cr Date Particulars | Amount | Date Particulars | Amount & @ 10.1,2009 |To Cash A/e | 20,000 | 31.1.2009 | By Balance c/d| 20,000 (Bal. fig.) : 000 20,000 7 To Balance b/d| 20,000Date | Particulars | Amount - 241.2009 |To Cash A/c 10,00 10,000 To Balance b/d| 10,000 _| © | 0 A 40,000 iy Hala 40,000 eis To Balane 40,000 Dr ___Salnries Account _ Particulars | Amoum | Dat Particula @. | <1a009 [To Cash Ale | 30,000. | 31.1.2009 [By Balance e/a) 30,06 30,00 To Balance b/d a Dr. ‘Telephone Charges Account ets | Date Particulars) Am 1.1.2009 |By Balance c/d| 10,0 (Bal. fig.) —— Amount ‘Travelling Expenses Account Date | Particulars Rw 25.1.2009 | To Cash A/c 10,000 | 31.1.2009 | By Balance c/d) 1¢ | (Bal. fig.) | 10,000 To Balance bid} 10,000 | Particulars eee eet Capital Sales Purchases Oy Trial Balance of Mr. X as on 31.1.2009 Debit 30,000 ent isp ey, LusTRATl Ram furni: yare the neces 206 Me rep Rit January Date 91.81.2005 04.01.2005 (05.01.2005 97.01.200 08.01.2005 10.01.2005 15.01.2005 20.01.200: 25.01.200 27.01.20€ Solution: Dr. Date 01.01.2Ledger ond Trial 6 “20,000 40,000 30,000 10,000 10,000 30,000 6 ILLUSTRATION 17: Mle Ram fumishes the following particulars. Pass Journ’ the necessary ledger accounts and also prepare a Trial 51* January 2005. 27.01.2005 _| Postage expenses paid 104 000 | Entries and Balance as on Particulars ‘Amount @ 71.01.2005 | Ram started the business with cash 80,000 04.01.2005 | Loan borrowed from Ramesh. 20,000 05.01.2005 | Sold goods to Ramya for cash 50,000 07.01.2005 | Purchase goods for cash 40,000 08.01.2005 | Rent paid 20,000 10.01.2005 | Salaries paid 30,000 15.01.2005 | Loan repaid to Ramesh 20,000 20.01.2005 | Machinery purchased for cash 20,000 25.01.2005 | Advertisement expenses paid 10,000 10,000 Solution: Journal Entries in the Books of Mr, Ram Dr Started the Business Cr. Date Particulars Debit | Credit To Ram’s Capital A/e (Being capital introduced by Ram) .01.2005 | Cash A/c Dr} 80,000 80,000| Accounting 4.39. Financial A rowed from Ramesh . an Bo ———_ T debit | + Particulars ~ peor 2008 | Cash A/c De | 20.000 . | to Ramesh Loan Ae ; (Being toan Ramesh) Goods Sold for Cash " Debit @ ———p:.| 50,000 To Sales A/e (Being cash sales made) Goods Purchased for Cash Debit Date Particulars @ 07.01.2005 | Purchase A/e Dr. 40,000 To Cash A/c ai (Being goods purchased for cash) Dr. Rent Paid Date Particulars Debit ® 08.01.2005 | Rent A/c Dr.| 20,000 To Cash A/c (Being rent paid in cash) Dr. Salaries Paid Date le Particulars Debit | 10.01.2005 | Salaries aj ~ ; a a ha Ml Dr. 30,000 (Being salaties paid in cash) “iLoan Repaid Ledger and Trial Balance wioulars Deb | Credit Particwls " o ase Sp ey 20,000 To Cash Me Lv (Being toan repaid) et asa — Purchased Machinery for Cash cr De Particulars Debit. | Credit i © @ oo } jt 3901.2005 | Machinery A/c Dr.| 20,000 ‘To Cash Ae 20,000 (Being machinery purchased) ‘Advertisement Expenses Paid Cr Particulars Debit | Credit ® @ 501.2005 | Advertisement Expenses A/c Dr. 10,000 To Cash A/c 10,000 (Being advertisement expenses paid) Dr. Postage Expenses Paid cr. Date Particulars Debit. | Credit & @ 27.01.2005 | Postage Expenses A/c Dr. 10,000 To Cash Ale 10,000 (Being postage expenses paid) Ledger Accounts Ram’s Capital Account Cr. Particulars | Amount | Date | Particulars | Amount @ @ 31.01.2005] To Balance c/d | 80,000 |01.01.2005| By Cash Ale | 80,000 (Bal. fig.) 80,000 By Balance b/d 80,000 80,000y Accounting Be a Sales Account —_- Fount | Dat Piricalars Bee] arnlrs jee { Fs 12008 | By Cash A 511.2005 | To Balance 50,000 | 5.1200) | Bal. fig.) | 50,000 0,5 | By Balance b/d) 59, in cash AS — Pe ————cwlars | Amount | Date Particular Dat era | te 5 s] ——} 30,000 2005 | By Purchase 11.2005 | To Ram's 0,000 | 7.1.2005 Capital A/c Ale 4.1.2005 | To Ramesh 8.1.2005 | By Rent A/c | Loan Ave 20,000 1200s |To Sales A/c | 50,000 | 10.12005 | By Salaries A/c | | 15.1.2005 |ByRamesh | Loan A/c | | 20.1.2005 | By Machinery | Ale | 2 25.1.2005 | By | Advertisement | Expenses Ale | on SS 27.1.2005 | By Postage | om Expenses Ale | 1,50,000 25.1.2005 Be Purchase Account Dates) Particulars | Amount | Date | Particulars | @ s 7.1.2005 : 1 ToCash Ale | 40,000 }31.1.2005 | By Balance o/d 3 40,000 7 Date ‘To Balance b/d) 40,000 = 27.1.2 Rent Account Angin | “Dare | Particulars 81.2005 |ToCash Ale | 20,000 i | cy fe _| 31-1205 | By Balance c/d 20,000 F Pantene } 20,000 | 20,000 r |once 438 « tedger and Triot Bal Satartes Account _—— scncolare | Amar Bn eer] me | Tee? | a! + 30,000 ae 71.1.2008 | By Balance ed “onan | 30,000 Jropatence ra] 90,000 | __d = Ramesh Loan A/e Oe es aroun | Dawe [Peels Particulars | Amount ae ‘articular Dae | [won| seis] To as ——| 20,000 |041.2005 [By Cah 20,000 Dr Machinery Account (a Poe | Particulars | Amount | Date Particulars | Amount @ | @ 301.2005 | To ‘Cash A/c 20,000 | 31.1.2005 | By Balance c/d 20,000 | 20,000, 20, | To Balance b/d| 20,000 | Dr Advertisement Expenses Account cr Dae | Particulars | Amount | Date | Particulars | Amowint | @ @. 7512005 [To Cash Ale | 10,000 | 31.1.2005 |By Balance c/d |_10,000 10,000 | To Balance bid| 10,000 Dr. Postage Expenses Account cr. Date | Particulars | Amount | Date Particulars 27.1,2005 |ToCash Ale |_ 31.1.2005 | By Balance c/d To Balance b/d eaapie sales Purchases Rent Salaries Machinery Advert 4.36 Financia! p accounting see of Mir Rear as on 31" Debit 40,000 20,000 10,000 Expenses 10,000 Postage Expenses 730,000 | 1 oa SS MLLUSTRATION 18: Mr. Kumar fumishes the following particulars. Pass Journal I the necessary ledger accounts and also prepare a Trial Ba 31% January 2007. Date Solution: Dr. Date aE Particulars Kumar started the business with capital Goods sold for cash 06.01.2007 | Interest received 08.01.2007 | Purchased goods for cash 15.01.2007 | Rent paid 20,01.2007 | Commission paid 22.01.2007 | Salaries paid 25.01.2007 | Withdrawn cash for personal use 27.01.2007 _| Selling expenses paid Journal Entries in the Books of Mr. Kumar Commenced the Business Particulars Deb "01012007 | Gakae z Dr. | 1,40,000 To Kumar's Capital A/ceo 307 le goods a Interest Received cr eras SSC*:C | Cre ~ i) | @ aa pif 20.000 | ‘To Interest Received A/c 20,000 Joods Sold for Cash + De | Cash Ae To Sales Ale sold for cash) x (Being interest received ) tedger ond Trial Balance Debit @ 20,0 eo 000 | 20,000 Goods Purchased for Cash Particulars Purchase A/c To Cash Ale (Being goods purchased for cash) 80,000 80,000 Rent Paid Debit | Credit Date Particulars Dr. @ ® 30,000 15.01.2007 Rent A/c To Cash Ale (Being rent paid) 30,000 Commission Paid Cr Particulars Debit if Credit ®@ @ Commission Paid A/c To Cash A/e (Being commission paid) Dr. 20,000 20,000,Salaries Paid lars Deb 01.2007 | Salaries A’e 1 salaries paid) | Dr. ___ Drawing for Perso Da T Particulars |“ 3501.2007 | Drawings A/e Dr.| 10,000 | ToCashA/e (Being drawing for personal use) ___1 Being drawing for person Dr. Selling Expenses Paid Ree Date Particulars ] Desir | \ | @ 77.01.2007 | Selling Expenses A/c Dr.| 20,000 To Cash A/e | (Being selling expenses paid) | Ledger Accounts Dr. Dr. Kumar’s Capital Account : aa Date | Particulars | Amount | Date rticulars © a 81.2007 311.2007 | To Balance e/d | 1,40,000 | 1.1.2007 | By Cash A/c 1,40,000 By Balance b/d Dr. by Sales Account e Particulars | Amount Date Particulars ®) 311.2007 ei ToBalanee cd | 20,000 | 5.1.2007 | By Cash Ac 20,000 a sy =. 2 ee By Balance b/d | 20.nverest Account path ne particular Amount pm pare |? no ol ee sy Gaahnre | 20.000 a {20.000 20,000 \ By Balance b/d | 20,000 Cash Account ———TFmount | ledge’ Date ei “pare Particulars 0 1,40,000 51.2007 | To Sales A/c 20,000 | 15.1.2007 64.2007 | To Interest 20.1.2007 Received A/c | 20,000 22.1,2007 25.1.2007 1 80,000 27.1.2007 | By Selling od Tat Balanse cr Particulars | Amount ® By Purchase } Ale 80,000 By Rent A/c 30,000 By Commis- sion Ale 20,000 By Salaries Ale 20,000 By Drawings 10,000 Ale 20,000 Expenses 1,80,000 cr Dr. Purchase Account Dae | Particulars | Amount | Date Particulars | Amount i) \ @. 1.2007 | To Cash Ale 30,000 | 31 1.2007 | By Balance eld | 80,000 80,000 {30,000 To Balance b/d| 80,000 % Rent Account Cr. Date | Parti Gmount | Date | Particulars \ Amount _| @& {_ @ 510007 |To Gash Ale | 30,000 | 31.1.2007 | By Balance cld 30,000 30,000 “30,000 ‘To Balance b/d| 30,000Financial Accounting 440 Commission Account =] Particulars | Amount | Date Particul Dare | Parvicute | @ feo Dr. 10,000, Jo01 2008 | Drawings A‘ | To Cash Ave | Being drawing for personal use) ron in Debit @ Telephone Charges A/c Dr.| 20,000 To Cash A/e (Being telephone charges paid in cash) Dr. Advertisement Expenses Paid Date Particulars Debit @ 24.01.2004 | Advertisement Expenses A/c Dr.} 20,000 To Cash Ale 2 (Being advertisement expenses paid) Ledger Accounts De Ravi’s Capital Account Date | Particulars | Amount | Date Particulars @. 31.1.2004 a 1.2004 | To Balance eid | 1,00,000 | 1.1.2004 | By Cash A c 1,00,000 1 By Balance b/d | 1,0( Sales Account Amount @ 8 0,000 | 5.12004 By Cash A/c 80. 80,000 Particulars | 80,00 By Balance b/d 80,000Shh 3004 | Te Balance ed By Batance b/d | 70,000 Purehas ses Account cr. Particulars. | Amount @ Date Particulars | Amount To Cash Ave 50,000 31,1.2004 50,000 To Balance b/d| 50,000 By Balance c/d | Cash Account Particulars. | Amount @. Date | Amount | @ Particulars To Ravi's Capital A/c To Sales A/c To Commis- sion A/c 1,00,000 80,000 70,000, 10.1.2004 15.1.2004 18.1.2004 20.1.2004 22.1.2004 24.1.2004 31.1.2004 2,50,000 To Balance b/d| 10,000 By Purchases A/e | 50,000 By Rent A/c By Salaries A/c 80,000 50,000 | By Drawings A/c 20,000, By Telephone Ale | 20.0 By Advertisement | Ale | By Balance c/d (Bal. fig.) 20,000 | 10,000 Rent Account Cr. Particulars | Amount @ Date Amount @ Particulars 80,000 80,000 80,000 31.1.2004 By Balance c/d | 80,000 80,0004.50 Financial Ae Satarles Ace = 7 Am a Daite Parti —" Feacntars | Ame L | 0.201 a eae Dr.| 20,000 To Cash Ale ——___| Geing rent paid) [GBeingrentpaid) | = Sali Date . Particulars Debit 17102011 | Salaries Are a) 10,000setting Expenses Paid Debit | @ @ += 15,000 Particulars Selling Expenses Ale De To Cash Ale (Being selling expenses paid) Suresh’s Capital Account | Manufacturing Expenses 3 | Purchase Return 4 | Carriage Inward 5 | Loan from Ashok 6 | Establishment Expenses 7 | Creditors 8 | Sales 9 | Debtors 10 | Cash in Hand W Sales Returns 12._| Interest in Investments 13. | Bank Overdraft 14 | Carriage Outwards 15 | Capital 16 | Wages 17 | Purchases 18 | Stock 19 | Discount Received 20 | Machinery Ledger ond T ors Lakshmi. You are requested 1 Balance Deon | Cre Bi 12,000 1,68,000, | 1,68,000 168,000 | = | 336000 | — | 5,28,000 ~ 1,.44,000 96,000. | > \ 1,20,000 and 2,40,000 9,600 14.400 | ie \ 24,000 264,000 | = \ 96,000 1,44,000 | 96,000 | 48,000 | or - 24,000 13,56,000AT6 Finoncial A 15, Pass Journal entry and post thers into Ledger and prepare thy , Balance 4301? oduced 4 capital of 250,00, () 1" April 20 Javith intr cash into bank 225,000 from Ram 215,0¢ Deposit Purchased goods [Ans: Trial Balance: 765 9, Giiy US April 2017 (ii) 28% April 2017 16 Pass Journal Bnisies and Prepare Ledger account and pr Balance. } Started business with cash 10,000 2 Paid into bank %5,000. § Purchased goods from Ram for cash 71,000. (November 2005 21601/ZZ1G/2 LAE/SY1C/PK3B/sp) [Ans: Balance: 21 17. Pass Journal Entries and Ledger account and prepare a Tri as on 31.1.2016 ——— Sr. SS Eee 11.2016 Business started with %2,50,000 and cash Ls deposited with bank 2016 Purchased machinery on credit from Rajesh 21.1.2016 Goods sold to Jasmine 25.1.2016 Cash withdrawn from bank (November 2017 62101/BPH1A/B) [Ans: Trial Balance: %3, 18. Pass J s it fen Entries and post them into Ledger and prep 91.08.2014 Madhavan commenced business with Pe %2,00,000 [ 08.20; ase its AA Purchased computer for cash 40,000 oan Distribution expenses paid in cash — %5,00 re aveling expenses paid in cash — 2,000 22.08.2014 chased fax machine for cash —%10,00( oe Sold old refrigerator for cash — 225,000 sea ome tax paid — %5,000 €celved dividend in cash — %3,000 ‘ i {Ans: Trial Balance: %2,25:"" go. Mr. Ra 30.6.2! @ ° @) § «© @ ©the r 65,0, DE Ledger and Tria! Bolanee: and Ledger account and prepate & Trial Balance 49, Pass Journal Entries C3 pow Jan.) Business started with 2,50,000 and cash deposited with Bank 150,000 45 Purchased machinery on eredit from Ranga. 50.000 ought furniture from Ramesh for ewsh 25 00 12 Goods satd to Yesodha 22,500) {November 2010/AF-2298 /HCSIC) Trial Balance: 73,22,500) [An gp. Me Ramesh furnishes the following information, Fs s Journal Entri and post them into. Ledger accounts and prepare Trial Balance 30.6.2015 {@) 01.06, 2015 Ramesh introduced a capital of 250,000 into business (b) 06.06.2015 Purchased goods for cash 710,000. (c) 15.06.2015 Machinery purchased for cash %20,000 (d) 25.06.2015 _ Sold goods to Madan 215,000 (e) 30.06.2015 Rent paid 25,000 [Ans: rial Balance: 765,000 21. Pass Journal Entries, post them into Ledger and prepare a Trial Balance from the following transactions: (a) 01.09.2016 Purchased goods from Ramya for cash 710,000 (b) 09.09.2016 Purchased computer for cash 40,000 (c) 19.09.2016 Sold goods to Radha for cash 731,500 (d) 25.09.2016 Received rent 712,000 (e) 29.09.2016 Paid salaries 724,000 [Ans: Trial Balance: %74,000| 22. From the following information prepare Journal, Ledger and Trial Balance in the books of Kannan & Co 01.11.2017 Started business with a capital of 750,000 07.11.2017 Paid cash into bank %20,000 14.11.2017 Purchased goods for cash 74,000 21.11.2017 Cash sales 73,000 28.11.2017 Withdrawn cash from bank for office use 3,000 30.11.2017 Purchased goods from Ram %4,000 (November 2005/21401/MW1A) [Ans: Trial Balance: 757,000]pceountie@ ws Og va post hem into Leulger Account 3. Pass i 2 anal Balane® Pe fms eno Me pinety Jostens fore OO" | gud orcas 10 APD purchase zoos rom seat g [cash sales 1 | eceived interest from Muthu + | Deposited cash into bank 0 £3,500 in full settlemen Paid cash to Jawahar 19 _| Paid rent by cheque | (April 2011/21601/ZZ1G/ B/SY1C/S [Ans: Trial Balance: 71,00 a & Sons 24, Joumalise the following transactions of M/s. Radhi Mis. Radha & Sons Business started with ®2,50,000 and cash deposited with bank 3 Purchased machinery on credit from Rangan 6 Bought furniture from Ramesh for cash 12 Goods sold to Yesodha 13 Goods retumed by Yesodha 1s Goods sold for cash 17 Bought goods for cash 20 Cash received from Yesodha a Cash paid to Ramya . paneer from bank for official use %0 Sage sana | 31 Cah eed Stationery for cash awn from bank for personal use ofthe proprietor 31 Salaties paid é ul Rent paid 5 {Ans: Trial Balance: €4,72.0"’Ledger and Trial Balance 4.79 go. stated their business on 1" January 2016 with €3,00,000 25. Meipeie capital. Following were the transactions for one month: i | Amount z= @ Pi ea to bank | 20,000 ticutars Purchased furniture from Sarayana Furniture | 18,000 Lid., on credit | purchased goods from Gopal 52,800 Sold goods on credit to Niresh 21,000 3.01 2016 | Cash paid to Sarayana Furiture Lid 12,000 15.01.2016 | Paid wages in cash 1,200 16.01.2016 | Issued cheque to Gopal 42,000 30.01.2016 | Received cash from Niresh 9,000 21.01.2016 | Paid cash into bank 9,000 23,01.2016 | Cash sales 21,000 25.01.2016 | Cash purchases 10,800 57.01.2016 | Goods withdrawn for personal use 3,000 38.01.2016 | Cash withdrawn for personal use 4500 29.01.2016 | Stationery purchased 600 31.01.2016 | Paid salaries by cheque 6,000 p 31012016 || Paid eee Give Journal Entries and Prepare Ledger accounts and Trial Balance as on 31" January 2016. [Ans: Trial Balance: %3,58,800]