BALANCING
OF LEDGER ACCOUNT.
Hey Guyz, How was your Night. Hope it was beautiful
and peaceful? Mine was great. It’s therefore a New day and a beautiful one at
that, it’s really an honour to see and experience today don’t you think.
Anyways I know it’s kind of been a while we did this subject ACC 101. Let’s get
started.
Before the preparation of Trial Balance, the account
must be balanced off at regular intervals during the financial year. It is
necessary to balance each account in order to ascertain the overall position
recorded in the bookkeeping system. In balancing the account, the following
procedures must be followed:
1. Post
all debit items.
2. Add
all the items on the debit side.
3. Post
all credit items.
4. Add
all the items on the credit side.
5. Compare
both the two totals.
6. If
the debit side is greater, insert the difference in the credit side.
7. If
the credit side is greater, insert the difference in the debit side.
Dr
|
Cash Ac
|
Cr
|
|||||
Date
|
Particulars
|
F
|
Amount
|
Date
|
Particulars
|
F
|
Amount
|
1-Jan
|
Sales
|
10,000
|
6-Jan
|
Purchases
|
3,000
|
||
7-Jan
|
Wages
|
200
|
|||||
10-Jan
|
Insurance
|
800
|
|||||
21-Jan
|
Oliver
|
300
|
|||||
Bal c/d
|
5,700
|
||||||
10,000
|
10,000
|
||||||
Bal c/d
|
5,700
|
||||||
The Balance on the debit side exceeds the amount on
the credit side by N 5,700. Insert the
difference n the credit side as balance carried down so that the Total should
be equal. In the next accounting period, N
5,700 will be balance brought down.
ILLUSTRATION
2:
Owen Enterprises started business on April 1, 1991
with a capital of N 16,000. The
following transactions were carried out during the month of April.
Apr 1- Purchased furniture by cash N 2,400.
Apr 2- Purchased stationery N 200 cash.
Apr 3- Purchased goods by cash N 3,500.
Apr 4- Purchased goods on credit from Ariel N 5,000.
Apr 15- Sold goods for cash N 6,000.
Apr 18- Sold goods to Charles on credit N 2,400.
Apr 20- Paid advertisement expenses N 200 cash.
Apr 25- Paid Nicole N 3,500 cash being part of the settlement of goods purchased.
Apr 28- Paid rent in cash N 300.
Apr 29- Paid salaries and wages N 600 cash.
You are required to prepare the ledger accounts
recording the above transactions and extract the trial balance.
Dr
|
Cash Book
|
Cr
|
|||||
Date
|
Particulars
|
F
|
Amount
|
Date
|
Particulars
|
F
|
Amount
|
1-Apr
|
Furniture
|
2,400
|
15-Apr
|
Sales
|
6,000
|
||
2-Apr
|
Stationery
|
200
|
20-Apr
|
Advert Expenses
|
200
|
||
3-Apr
|
Purchases
|
3,500
|
25-Apr
|
Nicole
|
3,500
|
||
Bal c/d
|
4,500
|
28-Apr
|
Rent
|
300
|
|||
29-Apr
|
Salaries & Wages
|
600
|
|||||
10,600
|
10,600
|
||||||
Bal c/d
|
4,500
|
||||||
LEDGER
ENTRIES:
Dr
|
Purchases A/c
|
Cr
|
|||||
Date
|
Particulars
|
F
|
Amount
|
Date
|
Particulars
|
F
|
Amount
|
Bal c/d
|
6,100
|
1-Apr
|
Cash
|
2,400
|
|||
2-Apr
|
Cash
|
200
|
|||||
3-Apr
|
Cash
|
3,500
|
|||||
6,100
|
6,100
|
||||||
Dr
|
Nicole's A/c
|
Cr
|
|||||
Date
|
Particulars
|
F
|
Amount
|
Date
|
Particulars
|
F
|
Amount
|
25-Apr
|
Cash
|
3,500
|
4-Apr
|
Goods
|
5,000
|
||
Bal c/d
|
1,500
|
Bal c/d
|
1,500
|
||||
Dr
|
Sales A/c
|
Cr
|
|||||
Date
|
Particulars
|
F
|
Amount
|
Date
|
Particulars
|
F
|
Amount
|
15-Apr
|
Sales
|
6,000
|
Bal c/d
|
8,400
|
|||
18-Apr
|
Sales
|
2,400
|
|||||
8,400
|
8,400
|
||||||
Dr
|
Payment A/c
|
Cr
|
|||||
Date
|
Particulars
|
F
|
Amount
|
Date
|
Particulars
|
F
|
Amount
|
28-Apr
|
Paid
|
300
|
Bal c/d
|
900
|
|||
29-Apr
|
Paid
|
600
|
|||||
900
|
900
|
||||||
DAY
BOOKS & THEIR LEDGER ENTRIES:
Dr
|
Sales Day Book.
|
Cr
|
|||||||||
Date
|
Particulars
|
F
|
Details
|
Total
|
|||||||
18-Apr
|
Charles
|
2,400
|
|||||||||
2,400
|
|||||||||||
Dr
|
Sales Day Book A/c
|
Cr
|
|||||||||
Date
|
Particulars
|
F
|
Amount
|
Date
|
Particulars
|
F
|
Amount
|
||||
18-Apr
|
Sundries
|
2,400
|
|||||||||
Dr
|
Charles' A/c
|
Cr
|
|||||
Date
|
Particulars
|
F
|
Amount
|
Date
|
Particulars
|
F
|
Amount
|
18-Apr
|
Sales
|
2,400
|
|||||
Dr
|
Purchases Day Book.
|
Cr
|
||
Date
|
Particulars
|
F
|
Details
|
Total
|
4-Apr
|
Ariel
|
5,000
|
||
5,000
|
||||
Dr
|
Purchases Day Book A/c
|
Cr
|
|||||
Date
|
Particulars
|
F
|
Amount
|
Date
|
Particulars
|
F
|
Amount
|
4-Apr
|
Sundries
|
5,000
|
|||||
Dr
|
Ariel's A/c
|
Cr
|
|||||
Date
|
Particulars
|
F
|
Amount
|
Date
|
Particulars
|
F
|
Amount
|
4-Apr
|
Purchases
|
5,000
|
|||||
This concludes our session for today; I know it’s
kind of longer than the previous accounts we have handled but any way still try
to study it and the Grace of God for understanding is released to you in Jesus
name- Amen.
Until we meet again remain ever Blessed and remember
you are for SIGNS& WONDERS. God Bless You
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