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    Double Entry Presentation

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    409005091
    Here are the steps to post the above transactions to the ledger: 1. Cash a/c (Dr) $18,500 Capital a/c (Cr) $18,500 (Opening entry for cash introduced) 2. Bank a/c (Dr) $45,600 Capital a/c (Cr) $45,600 (Opening entry for bank balance) 3. Sam Smith a/c (Dr) $4,000 Purchases a/c (Cr) $4,000 (Goods purchased on credit) 4. Span Enterprises a/c (Dr) $5,000 Sales a/c (Cr) $5,000 (

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    Double Entry Presentation

    Uploaded by

    409005091
    64 views16 pages
    Here are the steps to post the above transactions to the ledger: 1. Cash a/c (Dr) $18,500 Capital a/c (Cr) $18,500 (Opening entry for cash introduced) 2. Bank a/c (Dr) $45,600 Capital a/c (Cr) $45,600 (Opening entry for bank balance) 3. Sam Smith a/c (Dr) $4,000 Purchases a/c (Cr) $4,000 (Goods purchased on credit) 4. Span Enterprises a/c (Dr) $5,000 Sales a/c (Cr) $5,000 (

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    Here are the steps to post the above transactions to the ledger: 1. Cash a/c (Dr) $18,500 Capital a/c (Cr) $18,500 (Opening entry for cash introduced) 2. Bank a/c (Dr) $45,600 Capital a/c (Cr) $45,600 (Opening entry for bank balance) 3. Sam Smith a/c (Dr) $4,000 Purchases a/c (Cr) $4,000 (Goods purchased on credit) 4. Span Enterprises a/c (Dr) $5,000 Sales a/c (Cr) $5,000 (

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    64 views16 pages

    Double Entry Presentation

    Uploaded by

    409005091
    Here are the steps to post the above transactions to the ledger: 1. Cash a/c (Dr) $18,500 Capital a/c (Cr) $18,500 (Opening entry for cash introduced) 2. Bank a/c (Dr) $45,600 Capital a/c (Cr) $45,600 (Opening entry for bank balance) 3. Sam Smith a/c (Dr) $4,000 Purchases a/c (Cr) $4,000 (Goods purchased on credit) 4. Span Enterprises a/c (Dr) $5,000 Sales a/c (Cr) $5,000 (

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 16

    The ledger

    Objectives
    The students will:
    1. Know what is a ledger

    2. Identify different types of ledgers, identify the different categories


    of accounts.

    3. Describe the different classes of accounts

    4. Interpret the entreis and balances


    What is a ledger
    • The ledger is the prime book of accounting in which
    the collection of all accounts maintained by a business
    are kept.

    • Recording transaction in the ledger is called posting


    FORMAT OF THE LEDGER
    The ledger is shape like a T.
    Date Particular Folio Amount Date Particular Folio Amount
    $ $
    FORMAT OF THE LEDGER
    • With the increasing use of computers the 'T' format of the ledger
    has changed to a statement form, commonly referred to as
    running balance style.
    Date Particular Dr Cr
    $ $
    Types of Ledgers
    • The ledger is subdivided into different books with special uses for
    convenience and for easy retrieval of information.
    Types of Ledgers
    1. The general ledger also called the nominal ledger, contains all
    nominal, real and capital accounts
    2. Purchases ledger or creditors ledger or accounts payable ledger
    contains the personal accounts of suppliers or persons who the
    business owes.
    3. Sales ledger or debtors ledger or accounting receivable ledger
    contains the accounts of customers, firms and individuals who owe
    the business.

    PLEASE NOTE: Cash and Bank Accounts are normally recorded


    seperately in a Cash Book.
    Classes of Accounts
    • There are Three main classes of accounts

    1. Real Account - all assets accounts EXCEPT


    DEBTORS/ACCOUNTS RECEIVABLE

    2. Personal Account - ALL liabilities, Accounts Representing


    the Owner and DEBTORS/ACCOUNTS RECEIVABLE

    3. Nominal Accounts - All Expenses and Revenue (incomes)


    List of RealAccounts
    • Machinery
    • Cash
    • Bank
    • Motor Vehicle
    • Equipment
    • Furniture
    • Fittings
    • Fixture
    • Land
    List of Personal Accounts

    • Creditor
    • Loan
    • Mortgage
    • Debtor
    • Capital
    • Drawings
    List of Nominal Accounts
    Expenses Accounts Revenue Accounts
    • Purchases • Sales
    • Rent paid • Rent received
    • Commission paid • Commission received
    • Wages paid • Discount received
    • Salaries paid
    • Advertising paid
    • carriage out/Transportation out
    • Carriage inwards/Transportation in
    • Discount allowed
    The effect of a transaction
    • Each transaction of the business will affect at least two accounts. This
    is because of the twofold nature of a transaction. For example, when
    you make a purchase you receive something of value by giving
    something of value, cash or the promise of cash.
    Debit and Credit
    • To debit an account means that the date, and the amount in the
    transaction along with the corresponding account are enter on the
    debit side of the account.

    • To credit an account means that the date, and the amount in the
    transaction along with the corresponding account are enter on the
    credit side of the account.
    Golden rule for posting in the ledger

    Debit what is receiving or who is receiving

    Credit what is given or who is giving


    You are required to post the following transactions
    of Sandra Enterprises to the ledger
    • 2018
    • August 1 Sandra Enterprises started business with $18 500 cash and
    $45 600 in the bank
    • August 2 bought goods on credit from Sam Smith $4 000
    • August 2 sold goods on credit to Span Enterprises $5 000
    • August 4 Bought a van on credit from the Van Shop $40 000
    • August 6 cash sales $3 000
    • August 12 cash purchases $ 2 400
    • August 29 paid rent with chaque $5 300
    • August 29 paid wages with cash $4 300

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