Debit Balance of Ledger: Journal Entries and Ledger Accounts

Arjun EP

Published on: October 2, 2020

When debit balance of ledger is given

In accounting, debit balance is the part of assets like cash, debtor, stock (inventory, goods and merchandise) and fixed assets.

Generally, debit balance is debtor in ledger account.

It occurs when the total debits in an individual account are greater than the credits in that account.

When debtor is familiar and loyal to firm, goods are sold on credit; debtor pays due amount frequently; again goods sold on credit; again cash receives from him.

This, activities goes on throughout the year.

At the end of an accounting period, once debtor’s account is closed.

At the time of account close, there may be discount allowed.

Here, Amount = Rs = $ = £ = € = ₹ = Af = ৳ = Nu = Rf = රු = Currency of your country

PROBLEM: 5

The following extracted transactions are given by ML Traders:

June 1: Neema is debtor and she has balance Rs 35,000 and cash balance Rs 5,000.

June 5: Goods sold to Neema Rs 50,000 and cash received Rs 15,000 as partial payment.

June 10: Goods returned by Neema worth Rs 7,000 due to defective goods.

June 22: Cash received from Neema Rs 18,000.

June 30: Neema settled her account after 5% discount.

Required: (1) Journalise entries; (2) Neema’s account; (3) Cash account

[Answer: Cash received from Neema = Rs 47,250; Cash balance = Rs 80,750]

SOLUTION:

Journal Entries

In the book of ML Traders

Date	Particulars		LF	Amount Dr	Amount Cr
June, 5	Cash account	Dr		15,000
	Neema’s account	Dr		35,000
	To Sales				50,000
	(Being- goods sold in cash and credit)
June, 10	Sales return account	Dr		7,000
	To Neema’s account				7,000
	(Being- sales returned by Neema)
June, 22	Cash account	Dr		18,000
	To Neema’s account				18,000
	(Being- cash received from Neema)
June, 30	Cash account	Dr		42,750
	Discount allowed account	Dr		2,250
	To Neema’s account				45,000
	(Being- cash received and discount allowed)

Dr	Neema’s Account						Cr
Date	Particulars	JF	Amount	Date	Particulars	JF	Amount
Jun 1	To Balance b/d		35,000	Jun 10	By Sales return account		7,000
Jun 5	To Sales account		35,000	Jun 22	By Cash account		18,000
				Jun 30	By Discount		2,250
				Jun 30	By Cash account		42,750
			70,000				70,000

Dr	Cash Account						Cr
Date	Particulars	JF	Amount	Date	Particulars	JF	Amount
Jun 1	To Balance b/d		5,000	Jun 30	By Balance c/d		80,750
Jun 5	To Sales account		15,000
Jun 22	To Neema’s account		18,000
Jun 30	To Neema’s account		42,750
			80,750				80,750

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Click on link for YouTube videos topic wise :
Accounting Equation	http://tiny.cc/c89jkz
Basic Journal Entries in Nepali	http://tiny.cc/uaakkz
Basic Journal Entries	http://tiny.cc/8aakkz
Journal Entry and Ledger	http://tiny.cc/caakkz
Ledger Account	http://tiny.cc/haakkz
Subsidiary Book	http://tiny.cc/399jkz
Cash Book	http://tiny.cc/889jkz
Trial Balance and Adjusted Trial Balance	http://tiny.cc/c59jkz
Bank Reconciliation Statement (BRS)	http://tiny.cc/q59jkz
Depreciation	http://tiny.cc/ugakkz
Click on link for YouTube videos chapter wise:
Financial Accounting and Analysis (All videos)	http://tiny.cc/jlersz
Accounting Process	http://tiny.cc/mlersz
Accounting for Long Lived Assets	http://tiny.cc/plersz
Analysis of Financial Statement	http://tiny.cc/slersz