Debit Balance of Ledger

  

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, acvities goes on through out 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. 

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 Here, Amount = Rs = $ = £ = € = ₹ = Af = ৳ = Nu = Rf = රු = 

 

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

−

 

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

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

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PROBLEMS   AND   ANSWERS

 

Here, Amount = Rs = $ = £ = € = ₹ = Af = ৳ = Nu = Rf = රු = 

Basic Problem: 5

Following extracted information is given by YB Traders:

    July 1:    Debit balance of Manisha Rs 4,000.

    July 9:    Goods sold to Manisha Rs 12,000.

    July 12: Goods sold to Manisha in cash Rs 6,000.

    July 15: Cash received from Manisha Rs 9,500 and discount allowed Rs 500.

    July 22: Goods returned by Manisha Rs 500.

Required: Sales account and Manisha’s account

[Answer: Balance: Sales = 18,000; Manisha = 5,500]

Basic Problem: 6

Following extracted information is given by YK Traders:

    June 1:   Debit balance of Rahul Rs 10,000.

    June 2:   Goods sold to Rahul Rs 30,000.

    June 3:   Goods sold to Rahul and cheque received Rs 10,000.

    June 5:   Goods returned by Rahul Rs 2,000.

    June 7:   Cash received from Rahul in full settlement Rs 37,000.

Required: Sales account and Rahul’s account

[Answer: Sales balance = 40,000; Discount allowed = 1,000]

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