LEDGER | JOURNAL Vs LEDGER | SPECIMEN RULING OF LEDGER

LEDGER

The complete set of accounts for a business entry is called a general ledger. It is the “reference book” of the accounting system and is used to classify and summarize transactions and to prepare data for financial statements. It is also a valuable source of information for managerial purposes, giving for example the amount of sales for the period or the cash balance at the end of the period.

SPECIMEN RULING OF LEDGER

From the above specimen rulings of ledger account, we can observe the following points:

1.    Ledger Account is usually in the “T” form which contains two sides-Debit side and Credit side.

2.    Left hand side is called Debit Side (Dr.)

3.    Right hand side is called Credit Side (Cr.)

4.    Each side further divided into four columns:

a.      Column 1 meant for date, month and year.

b.      Column 2 meant for particulars.

c.      ‘F’ Stands for Folio (Page Number) of the Journal or Subsidiary Books.

d.      Account to be Debited of Credited.

5.    The names of accounts to be debited find an entry on the left side.

6.    The names of accounts to be credited find an entry on the right side.

BALANCING OF LEDGER ACCOUNT

The Following procedure to be adopted, while balancing of various accounts in the ledger.

1.      Debit and Credit sides of an accounts are totalled separately.

2.      Find the difference between the total of both sides.

3.      The difference is entered on the side on which the total is smaller and this difference is the closing balance shown by the account and this will be carried forward to the next years as the “Opening balance” in the account.

4.      If the debit side of an amount is more, it is called Debit Balance and it entered on the credit side to close the account and written as by balance c/d.

5.      If the credit side of an amount is more, it is called Credit Balance and it entered on the debit side to close the account and written as by balance c/d.

JOURNAL Vs LEDGER

Journal	Ledger
1.    Journal is the book of Original Entry of First Entry 2.    It is the book of Chronological Record 3.    The process of recording in the journal is called journalizing 4.    Journal as a book supported by greater sources of evidence. 5.    Journal lays focus on recording transactions   6.    The process of Journalizing is a continuous one.	1.    Ledger is the book of Second entry   2.    It is the book of Analytical Record.   3.    The process of recording in ledger is posting. 4.    Ledger is dependent on journal.   5.    Ledger focuses on process of classification of grouping of different heads of accounts. 6.    The process of posting in ledger to be done according to the needs and convenience.

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