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ZIMSEC Accounting Form 1 & 3 3rd Lesson-Ledger

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Leeroy Zizhou
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156 views3 pages

ZIMSEC Accounting Form 1 & 3 3rd Lesson-Ledger

Uploaded by

Leeroy Zizhou
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Form 1 & 3 Accounting -3rd Lesson by Leeroy Zizhou

Thursday 22-10-20

Ledger
It is the principal or main book of accounts which is used to record transactions in double-entry form.

All transactions are posted into ledger accounts (see previous lesson when we discussed what an account is, as
well as the double-entry system.)
Before we record in any account in the ledger, we first collect from each transaction in source documents. Then
those source documents are used to extract information to be recorded in the other subsidiary books.
Afterwards, we post into the ledger accounts, information from each of these subsidiary books (cash books and
journals)
Posting in book-keeping means writing up the ledger from the books of original entry.
First of all, just remember that the ledger is merely a book; we need to know what the format of the ledger looks
like.
Format of the Ledger
The ledger is divided into two halves:
a. The Left-Hand Side Debit side
b. The Right-Hand Side Credit Side

How to record in the ledger:


Remember the table we used last lesson which lists down all the accounts involved for every transaction, and
also specifies which account will be debited and the one credited for every transaction- ALWAYS use that table
even when not mentioned by the examiner because it has added advantages like:
1. It helps you summarize accounts for every transaction, specifying on which side of the account we’ll
record.
2. Since it lists down all transactions, it keeps you from omitting any account details that ought to be
recorded for every account.
3. It provides you with all the information in every transaction- date, details, amount, account debited or
credited.
e.g. Question: C. Moyo opened his books on 1 February 2012.
February 1 Started business with cash $15 000.
`` 2 Bought motor vehicle for cash $5000.
`` 3 Received $789 cash from John.
`` 6 Paid |$600 c ash to Paul.
`` 12 Bought goods for $2 000cash.
`` 16 Sold motor vehicle on credit to Ford Motors for $7 895.
`` 19 Sold goods worth $980 and received cheque.
`` 24 Paid for $560 wages in cash.
Prepare C. Moyo’s Capital, Cash and Purchases accounts. (Don’t balance the accounts)
Solution: First of all, we create the table as we mentioned:
Date Transaction Account Account
Debited Credited
February 1 Started business with cash $15 000. Cash Capital
`` 2 Bought motor vehicle for cash $5000. Motor Vehicle Cash
`` 3 Received $789 cash from John. Cash John
`` 6 Paid |$600 c ash to Paul. Paul Cash
`` 12 Bought goods for $2 000cash. Purchases Cash
`` 16 Sold motor vehicle on credit to Ford Motors for $7 895. Ford Motors Motor Vehicle
`` 19 Sold goods worth $980 and received cheque. Bank Sales
`` 24 Paid for $560 wages in cash. Wages Cash

NB: IF the name of the account was on the right-hand side for that transaction, this means that when we’re
inside that account, we record on its right-hand/credit side as well, and under the details column, we simply
write the name of the other account involved in the transaction-double-entry system., e.g. the transaction on
February 1.
Also, to complete the double-entry, the account which was recorded as the detail inside the other one of that
same transaction is such that when we now record inside it, we record on the opposite side to complete the
double-entry, e.g. the Purchases account tied together with the Cash account on the transaction on February 1.
In our next lesson, we’ll be looking at how to balance ledger accounts.

For queries, questions, suggestions, additions and deductions, call, WhatsApp, or text message me at:
0773442263
OR visit me at 6288 Westlea, Harare.
OR email me at [email protected]

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