Total and Balance of Ledger

 

How to Do Total and Balance of Ledger

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.

Normal debit and credit balances

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: Cash account Purchase account Return inwards account Fixed assets account Expenses account Drawings account Accounts receivable Debtors account

Credit balances include: Bank overdraft account Sales account Return outwards account Income account Capital account Loan account Accounts payable account Creditors account

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

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             To Capital account (Being- business stared with cash)	Dr		200,000	200,000

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.

 

 

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

 

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

 

Journal Entry

In the book of BC Traders

Date	Particulars		LF	Amount Dr	Amount Cr
June, 1	Cash account Stock account Furniture account             To Capital account (Being- business stared with cash, stock & furniture)	Dr Dr Dr		150,000 60,000 30,000	240,000

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 Jun, 1 Jun, 1	By Cash account By Stock account By Furniture account		150,000 60,000 30,000
			240,000				240,000
				Jun, 2	By Balance b/d		240,000

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PROBLEM   AND   ANSWER

 

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

 

Basic Problem: 3

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

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