The difference between the total of debit and credit of an account is known as balance.
Generally, ledgers are closed at the end of accounting period.
But, they can be closed when they are required.
The procedure for balancing a ledger is given below:
Step 1: Find out the total amount of debit and credit separately on a rough,
Step 2: Put the difference amount to make equal by writing ‘balance c/d’; this balance may be either debit or credit,
Step 3: Now, both debit and credit amount is equal in total,
Step 4: Transfer ‘balance c/d’ for ‘balance b/d’ in opposite side and write next date.
There are two types of balances.
First is debit balance and second is credit balance.
All asset accounts, expense accounts and distribution accounts have debit balances.
All the liability accounts, revenue accounts, and owner’s equity accounts have credit balances.
Cash account is the part of assets; cash has debit balance.
capital account is part of liabilities; capital has credit balance.
Some major balances are:
Debit balances include |
Credit balances include |
Cash account |
Bank overdraft account |
Purchase account |
Sales account |
Return inwards account |
Return outwards account |
Fixed assets account |
– |
Expenses account |
Income account |
Drawings account |
Capital account |
Investment account |
Loan account |
Accounts receivable |
Accounts payable account |
Debtors account |
Creditors account |
#######
Click on link for YouTube videos topic wise : |
|
Accounting Equation |
|
Basic Journal Entries in Nepali |
|
Basic Journal Entries |
|
Journal Entry and Ledger |
|
Ledger Account |
|
Subsidiary Book |
|
Cash Book |
|
Trial Balance and Adjusted Trial Balance |
|
Bank Reconciliation Statement (BRS) |
|
Depreciation |
|
Click on link for YouTube videos chapter wise: |
|
Financial Accounting and Analysis (All videos) |
|
Accounting Process |
|
Accounting for Long Lived Assets |
|
Analysis of Financial Statement |
#######
Here, Amount = Rs = $ = £ = € = ₹ = Af = ৳ = Nu = Rf = රු = Currency of your country
PROBLEM: 3A
June 1: Business started with cash Rs 200,000.
Journal Entry
In the book of KK Enterprises
Date |
Particulars |
|
LF |
Amount Dr |
Amount Cr |
June, 1 |
Cash account |
Dr |
|
200,000 |
|
|
To Capital account |
|
|
|
200,000 |
|
(Being- business stared with cash) |
|
|
|
|
|
|
|
|
|
|
Here, Cash is debited Rs 200,000; Capital is credited Rs 200,000.
Cash Account
Dr |
|
|
|
|
|
|
Cr |
Date |
Particulars |
LF |
Amount |
Date |
Particulars |
LF |
Amount |
Jun, 1 |
To Capital account |
|
200,000 |
Jun, 1 |
By Balance c/d |
|
200,000 |
|
|
|
200,000 |
|
|
|
200,000 |
Jun, 2 |
To Balance b/d |
|
200,000 |
|
|
|
|
Capital Account
Dr |
|
|
|
|
|
|
Cr |
Date |
Particulars |
LF |
Amount |
Date |
Particulars |
LF |
Amount |
Jun, 1 |
To Balance c/d |
|
200,000 |
Jun, 1 |
By Cash account |
|
200,000 |
|
|
|
200,000 |
|
|
|
200,000 |
|
|
|
|
Jun, 2 |
By Balance b/d |
|
200,000 |
Keep in Mind (KIM)
Balance amount is put to make ledger equal. |
This balance may be in either debit side or credit side. |
This putting amount is known balance c/d |
Balance c/d means balance carried down. It is also known closing balance and ending balance. |
Balance b/d means balance brought down. It is also known opening balance or beginning balance. |
Here, Amount = Rs = $ = £ = € = ₹ = Af = ৳ = Nu = Rf = රු = Currency of your country
PROBLEM: 3B
Following extracted transactions were given to you BC Traders:
5 March 2020: Started business with cash Rs 150,000; stock Rs 60,000 and furniture worth Rs 30,000.
Required: Journal entry and ledgers
Journal Entry
In the book of BC Traders
Date |
Particulars |
|
LF |
Amount Dr |
Amount Cr |
June, 1 |
Cash account |
Dr |
|
150,000 |
|
|
Stock account |
Dr |
|
60,000 |
|
|
Furniture account |
Dr |
|
30,000 |
|
|
To Capital account |
|
|
|
240,000 |
|
(Being- business stared with cash, stock & furniture) |
|
|
|
|
|
|
|
|
|
|
Here, Cash is debited Rs 200,000; Capital is credited Rs 200,000.
Cash Account
Dr |
|
|
|
|
|
|
Cr |
Date |
Particulars |
LF |
Amount |
Date |
Particulars |
LF |
Amount |
Jun, 1 |
To Capital account |
|
150,000 |
Jun, 1 |
By Balance c/d |
|
150,000 |
|
|
|
150,000 |
|
|
|
150,000 |
Jun, 2 |
To Balance b/d |
|
150,000 |
|
|
|
|
Stock Account
Dr |
|
|
|
|
|
|
Cr |
Date |
Particulars |
LF |
Amount |
Date |
Particulars |
LF |
Amount |
Jun, 1 |
To Capital account |
|
60,000 |
Jun, 1 |
By Balance c/d |
|
60,000 |
|
|
|
60,000 |
|
|
|
60,000 |
Jun, 2 |
To Balance b/d |
|
60,000 |
|
|
|
|
Furniture Account
Dr |
|
|
|
|
|
|
Cr |
Date |
Particulars |
LF |
Amount |
Date |
Particulars |
LF |
Amount |
Jun, 1 |
To Capital account |
|
30,000 |
Jun, 1 |
By Balance c/d |
|
30,000 |
|
|
|
30,000 |
|
|
|
30,000 |
Jun, 2 |
To Balance b/d |
|
30,000 |
|
|
|
|
Capital Account
Dr |
|
|
|
|
|
|
Cr |
Date |
Particulars |
LF |
Amount |
Date |
Particulars |
LF |
Amount |
Jun, 1 |
To Balance c/d |
|
240,000 |
Jun, 1 |
By Cash account |
|
150,000 |
|
|
|
|
Jun, 1 |
By Stock account |
|
60,000 |
|
|
|
|
Jun, 1 |
By Furniture account |
|
30,000 |
|
|
|
240,000 |
|
|
|
240,000 |
|
|
|
|
Jun, 2 |
By Balance b/d |
|
240,000 |
*******
PROBLEM AND ANSWER |
Here, Amount = Rs = $ = £ = € = ₹ = Af = ৳ = Nu = Rf = රු = Currency of your country
Problem: 3A
Following transactions were given to you RK Traders:
April 10: Started business with bank balance Rs 300,000; stock Rs 150,000 and furniture Rs 50,000.
April 12: Goods sold worth Rs 20,000 and cheque received.
Required: Journal entry and ledgers
***** #EPOnlineStudy *****
Thank you for investing your time.
Please comment on article.
You can help me by sharing this article at your social media platform.
Jay Google, Jay YouTube, Jay Social Media
जय गूगल, जय युट्युब, जय सोशल मिडिया