Ledger(Classification) & Trial Balance(Summarizing)

1
Classification

• As per Dual Aspect Concept
• Every transaction has two Accounts
• Segregation of all accounts

2
Ledger

• Classification
• In a book called Ledger
• Preparing Ledger Accounts
• Transferring Journal entries into Ledger
  Posting

3
Ledger

• Verifies the Double entry / Dual aspect
  system
• Compiles all related information to a particular
  account
• Includes Posting the entries
• Casting Balancing the accounts.

4
Ledger

• A Principal books of accounts
• Book of Second Entry
• Book for the Analytical record
• ( Note Journal - Book for Chronological Record
  )

5
Specimen of Ledger

• A T shape Account, having two sides Debit
  Credit

6
Process of ledger

• For Opening balance, Balance Brought
  Down/Forward is used.
• For Closing balance, Balance Carried
  Down/Forward is used.
• The closing Balance is of the side having
• higher total
• Generally Nominal Accounts are not balanced

7
Question

• Prepare the Stationery Account of a firm for the
  year ended 31.12.2015 duly balanced off, from the
  following details

2015
Jan. 1 Inventory 480
April 5 Purchase of stationery by cheque 800
Nov. 15 Purchase of stationery on credit from Five Star Stationery Mart 1,280
Dec. 31 Inventory 240
8
Summarizing

• At the period end
• the list of balances of all accounts
• Trial Balance
• (compilation of all transactions accounts)

9
Trial balance

• The balances(Dr./Cr.) (from Ledger)- transferred
  to Trial Balance
• Purpose To verify the arithmetical accuracy
• Rectification of Errors
• Basis of Financial Statements
• (Agreement of Trial Balance does not mean that
  there are no errors left at all)
• (Any Difference in Trial Balance- Suspense A/C)

10
Format of Trial Balance

• Balance Method

11
Format of Trial Balance

• Total Balance Method

12
Format of Trial Balance

• Total Method

13
Methods of Trial Balance

• Balance Method (Dr/Cr Balances from Ledger
  Accounts are Transferred)
• Total Method
• The totals(without balancing) of both the sides
  of accounts
• Balance Total
  Method. (The totals Balances, both are
  recorded)

14
Balances of Trial Balance

• Debit Balance An Asset/ Debtor/ Expenses
• Credit Balance A Liability/ Creditor/ Incomes

15
MCQs

• Q.1. ____________is prepared to ascertain the
  arithmetical accuracy of posting and balancing of
  accounts

16
MCQs

• Q.2. The left hand side of an account is known as
  _________ and the right hand side of an account
  is known as ________

17
MCQs

• Q.3. Income tax in case of a sole trader is
  treated as _____

18
MCQs

• Q.4. On March 31, 2010 Narain Enterprises
  purchased a loader from Laxmi Motors for Rs.
  1,75,000 which is shown in the balance sheet as
  on 31st March, 2010. This is

19
MCQs

• Q.5. Payment received from debtor

20
MCQs

• Q.6. Market value of investment is shown outside
  the Balance Sheet as a footnote according to

21
MCQs

• Q.7. Which of the following is a credit
  transaction?

22
MCQs

• Q.8. Sales of office furniture should be credited
  to

23
MCQs

• Q.9. ______. is a summary of all assets and
  liabilities on a particular date.

24
MCQs

• Q.10. Which of the following lists the balance
  and the title of accounts given in the ledger, on
  a given date?