LEDGER
Hey Guys,
Happy New Week. This month is soon over, well 2015 has been a FAST year
wouldn't you say? Well All to the Glory of God. How was your weekend, mine was
splendid. Alright, straight to Business...
It is a book
that contains a permanent record of all transactions of a business in a
classified and summarised form. The Ledger Book is the Final Destination of all
Transactions on the subsidiary books. All the transactions must be recorded
using the principle of double entries.
The entries in the cash book and other original books of account are
posted to the ledger.
Classification of Ledger:
1. Personal
Ledger- These comprises of the supplier's personal account and customer's
personal account. it can be divided into the following:
a. Sales
Ledger- This is a record of the sales of books made by the organisation to
various individuals and enterprises.
b. Purchases
Ledger- It is a book for suppliers personal account. it contains account of
creditors.
2. General
Ledger- These are ledgers for real and nominal accounts. Example Expenses
A/c, Income A/c, Sales A/c, etc as well as all other assets.
Nature of Ledger:
1. It is
divided into two parts by a central line.
2. The right
side is the credit side which is entitled CR.
3. The left
side is the debit side which is entitled DR.
4. The
Ledger has columns for Date, Particulars, Folio, Amount on the debit and credit
sides.
5. The right
side is the side that gives value.
6. The left
side is the side that receives value.
Double Entry Principle
The Double
Entry System of the Book Keeping will be used for recording Transaction in the
Ledger. The Summary; Debit the Receiver & Credit the Giver.
Procedures:
* Every
Transaction must affect 2 accounts.
* Give names
to the 2 accounts by using the name of other account in the account you are
posting.
* Credit all
the giving account.
* Debit all
the receiving account.
ILLUSTRATION
1:
Complete the
Transactions by showing account to the credit and account to the debit.
1. Started
Business with Money in Cash.
ANSWER:
Cash a/c- Debit
Capital a/c-
Credit
2. Paid Part
of the Opening cash into the Bank.
ANSWER:
Bank a/c- Debit
Cash a/c-
Credit
3. Bought
Goods on Credit from Ayo.
ANSWER:
Ayo a/c- Credit
Purchases
a/c- Debit
4. Sold
Goods on Credit to Olotu.
ANSWER:
Olotu's a/c- Debit
Sales a/c-
Credit
5. Cash
Purchases.
ANSWER:
Cash a/c- Credit
Purchases
a/c- Debit
6. Olotu
returned goods to us.
ANSWER:
Olotu's a/c- Credit
Returns
Inward's a/c- Debit
7. We
returned goods to Ayo.
ANSWER:
Ayo's a/c- Debit
Returns
Outward's a/c- Credit
8. Dapo lent
us cash.
ANSWER:
Dapo's a/c- Credit
Cash a/c-
Debit
9. Received
Commission in cash.
ANSWER:
Cash a/c- Debit
Commission
a/c- Credit
10. Sold
goods for cash N6, 000.
ANSWER:
Sales a/c- Credit
Cash a/c-
Debit
11.
Purchased Goods on credit from Mallam Abiodun N15, 000.
ANSWER:
Abiodun's a/c- Credit
Purchases
a/c- Debit
12.
Purchased Stationery N3, 500 Cash.
ANSWER:
Stationery a/c- Debit
Cash a/c-
Credit
13.
Purchased Furniture by cash N2, 400.
ANSWER:
Furniture a/c- Debit
Cash a/c- Credit
14. Paid
Mallam Abiodun N3, 500 Cash, being part of settlement of goods purchased.
ANSWER:
Mallam Abiodun's a/c- Debit
Purchases
a/c- Credit
15. Paid
rent in cash N300.
ANSWER:
Rent a/c- Debit
Cash a/c-
Credit
16. Paid
salaries and wages N600 Cash.
ANSWER:
Payment a/c- Debit
Cash a/c-
Credit
17. Paid
Advertisement expenses N200 Cash.
ANSWER:
Advertisement a/c- Debit
Cash
a/c-Credit
18. Sold
goods to Charles on credit N2, 400
ANSWER:
Sales a/c- Credit
Charles a/c-
Debit
This brings us to the end of Today's Session.
Hope this was very helpful to you, leave a comment of what you think of this
Tutorial and of your Questions below. Have a Blessed Day and Remember You are
Amazing. God Bless You.
