GMR Institute of Technology

Rajam, Andhra Pradesh

(An Autonomous Institution Affiliated to JNTUK, AP)

Cohesive Teaching – Learning Practices (CTLP)

Class 7th Sem. – B. Tech. (ME) Department: EEE,ECE & CHEM
Engineering Economics and Project Course
Course HS3405
Management Code
Prepared by Dr.D.Srinivasa Kumar & Dr.K.V.S.Prasad
Lecture Topic Journal and Ledger
PO3(2), PO10(1),
Course Outcome (s) CBS401.4 Program Outcome
PO11(3)
Duration 50 Min Lecture 18 of 45 Unit II
Pre-requisite (s) -

1. Objective(s)

To know how to pass the journal entries

2. Intended Learning Outcomes (ILOs)

At the end of this session the students will able to:

A. Demonstrate their knowledge to find out the ledger balances
B. Utilize the knowledge in preparation of ledger accounts
C. Distinguish to write the journal entries in the books of accounts

3. 2D Mapping of ILOs with Knowledge Dimension and Cognitive Learning Levels of

RBT

Cognitive Learning Levels (2D)

Knowledge
Remember Understand Apply Analyze Evaluate Create
Dimension (1D)
Factual B
Conceptual A
Procedural C
Meta Cognitive

4. Teaching Methodology

Chalk & Board

Form No. AC 04. 01. 2016 (R: 30.09.2016)– GMRIT, Rajam, Andhra Pradesh
5. Evocation

Fig.1: Journal and Ledger

6. Deliverables

Journal: This called the “Book of prime entry. The word journal is derived from the Latin
word journ, which means a day. Hence, journal is also termed as a daybook wherein the day-
to-day transactions are recorded in chronological order.
Journal Entry: The process of recording the business transactions in the journal is know as
journalizing to divide business transactions into two aspects and recording I the journal is
called journal entry. The first one is debit aspect and second one is credit aspect.
Problems:
1) Journalizing the transactions given below in the books of Prasad.
Date Particulars
2008
Jan 1 Prasad commenced business with cash Rs.30,000
2 Cash sales Rs.4,000
4 Bought machinery RS.15,000
7 Sold goods to Raju Rs.10,000
9 Purchased goods from Ramana Rs.8,000
10 Goods returned by Raju Rs.5,000
12 Paid for stationery Rs.1,000
14 Carriage expenses Rs.500
15 Bought furniture for proprietor’s residence and paid cash Rs.7,000
17 Sold goods to Krishna for cash Rs.3,000
22 Received discount Rs.800
24 Paid for wages Rs.1,200
25 Deposited cash with bank Rs.10,000
30 Goods return to RamanaRs. 2,000
Solution:

Journal Entries in books of Prasad for year ending 30th June 2008
L Debit Credit
Date Particulars
F Rs. Rs.
Cash A/C Dr 30,000
2008
To Capital A/C 30,000
June 1
(Being business Commenced)
2 Cash A/C Dr 4,000
Form No. AC 04. 01. 2016 (R: 30.09.2016)– GMRIT, Rajam, Andhra Pradesh
 To Sales A/C 4,000
(Being goods sold for cash)
Machinery A/C Dr 15,000
4
To Cash A/C 15,000
Raju A/C Dr 10,000
7 To Sales A/C 10,000
(Being goods sold to raju for cash)
Purchases A/C Dr 8,000
9 To Ramana A/C 8,000
(Being goods purchases from Ramana)
Sales returns A/C Dr 5,000
10 To Raju A/C 5,000
(Being goods returned by raju)
Stationery A/C Dr 1,000
12 To Cash A/C 1,000
(Being Stationery purchased for cash)
Carriage Expenses A/C Dr 500
14 To Cash A/C 500
(Being carriage expenses paid)
Drawings A/C Dr 7,000
15 To Cash A/C 7,000
(Being goods used for his personal use)
Cash A/C Dr 3,000
17 To Sales A/C 3,000
(Being goods sold for cash)
Cash A/C Dr 800
22 To Discount received A/C 800
(Being discount received)
Wages A/C Dr 1,200
24 To Cash A/C 1,200
(Being wages paid by cash)
Bank A/C Dr 10,000
25 To Cash A/C 10,000
(Being cash deposited with bank)
Ramana A/C Dr 2,000
30 To Purchase returns A/C 2,000
(Being goods return to Ramana)

2) Journalise the following transactions, post them in the ledger and balance the accounts on
31st January.
1. John sarted business with a capital of RS.10,000
2. He purchased goods from Mohan on credit of Rs.2,000
3. He paid cash to Monhan Rs.1,000
4. He sold goods to Suresh Rs.2,000
5. He received cash from Suresh RS.3,000
6. He further purchased goods from Mohan Rs.2,000
7. He paid cash to Monhan Rs.1,000
8. He further sold goods to Suresh Rs.2,000
9. He received cash from Suresh Rs.1,000

Form No. AC 04. 01. 2016 (R: 30.09.2016)– GMRIT, Rajam, Andhra Pradesh
Solution:
Journal Entries
Particular
L.F
Date Debit Credit
Rs. Rs.
Cash A/C Dr 10,000
1 To Capital A/C 10,000
(Being commencement of business)
Purchase A/C Dr 2,000
2 To Monhan A/C 2,000
(Being purchase of goods on Credit)
Mohan A/C Dr 1,000
3 To Cash A/C 1,000
(Being paymen of cash to Mohan)
Suresh A/C Dr 2,000
4 To Sales A/C 2,000
(Being goods sold to suresh)
Cash A/C Dr 3,000
5 To Suresh A/C 3,000
(Being cash received from Suresh)
Purchase A/C Dr 2,000
6 To Mohan A/C 2,000
(Being purchase of goods from Mohan)
Mohan A/C Dr 1,000
7 To Cash A/C 1,000
(Being payment of cash to Mohan)
Suresh A/C Dr 2,000
8 To Sales A/C 2,000
(Being goods sold to suresh)
Cash A/C Dr 1,000
9 To Cash A/C 1,000
(Being cash received from Suresh)

Ledger: The ledger is the principal book of accounts where similar transaction relating to a
particular person or thing is recorded.
It is book of final entry. All business transactions are first recorded in journal and final
recorded in the ledger. The process of transferring the transactions from journal to the ledger
is called as posting.

Dr Cash A/C Cr
Date Particulars JF Amount Date Particulars JF Amount
Jan-1 To Capital A/C 10,000 Jan-3 By Mohan A/C 1,000
Jan-5 To Suresh A/C 3,000 Jan-7 By Mohan A/C 1,000
Jan-9 To Suresh A/C 1,000 Jan-31 By Balance c/d 12,000
14,000 14,000
Feb-1 To Balance b/d 12,000
Form No. AC 04. 01. 2016 (R: 30.09.2016)– GMRIT, Rajam, Andhra Pradesh
Dr Capital A/C Cr
Date Particulars JF Amount Date Particulars JF Amount
Jan-31 To Balance c/d 10,000 Jan-3 By Cash A/C 10,000

10,000 10,000
Feb-1 By Balance b/d 10,000
Dr Cr
Purchase A/C
Date Particulars JF Amount Date Particulars JF Amount
Jan-2 To Mohan A/C 2,000
Jan-6 To Mohan A/C 2,000 Jan-31 By Balance c/d 4,000
4,000 4,000
Feb-1 To Balance b/d 4,000

Dr Mohan A/C Cr
Date Particulars JF Amount Date Particulars JF Amount
Jan-3 To Cash A/C 1,000 Jan-2 By Purchases A/c 2,000
Jan-7 To Cash A/C 1,000 Jan-6 By Purchases A/C 2,000
Jan-31 To Balance c/d 2,000 Jan-31
4,000 4,000
Feb-1 To Balance b/d 4,000

Dr Suresh A/C Cr
Date Particulars JF Amount Date Particulars JF Amount
Jan-4 To Sales A/C 2,000 Jan-5 By Cash A/C 3,000
Jan-8 To Suresh A/C 2,000 Jan-9 By Cash A/C 1,000

4,000 4,000

Dr Sales A/C Cr
Date Particulars JF Amount Date Particulars JF Amount
Jan-31 To Balance c/d 4,000 Jan-4 By Suresh A/C 2,000
Jan-8 By Suresh A/C 2,000
4,000 4,000
Feb-1 To Balance b/d 4,000

Sub-division of Ledges:
Debtors Ledger: It may contain the accounts of all the customers to who goods have been sold
on credit. Entries in this ledger are made mostly from sales day books. Sale returns book and
cash book.
Creditor Ledger: It may contain the accounts of all the suppliers from who goods have been
purchased on credit. Entries in this ledger are made mostly from purchase day book,
purchase returns book and cash book.
General Ledger: It may contain all residual accounts – mainly real and nominal accounts.

7. Keywords

Journal

Ledger

Balances
Form No. AC 04. 01. 2016 (R: 30.09.2016)– GMRIT, Rajam, Andhra Pradesh
8. Sample Questions

Understand
1. Define Ledger and Explain the sub divisions of Ledgers?

Apply
1. Explain the differences between the Journal and Ledger?

Analyze
1. Describe the process of balance the ledger accounts?

9. Stimulating Question (s)

1. Prepare the required general journal entry to record the following transactions for the
Flaherty Company.
a) Incurred Rs. 95,000/- of factory labor cost which is paid in cash.
b) Used Rs.42,000/- of direct labor in the grinding department, and Rs.36,000/- of direct
labor in the sifting department.
c) Used Rs.17,000/- of indirect labor.

10. Mind Map

Fig.2: Mind Map of Journal and Ledger

11. Student Summary

At the end of this session, the facilitator (Teacher) shall randomly pick-up few students to
summarize the deliverables

Form No. AC 04. 01. 2016 (R: 30.09.2016)– GMRIT, Rajam, Andhra Pradesh
12. Reading Materials

1. Managerial Economics and Financial Analysis by A. Aryasri McGraw Hill, 2011, Page
No. 11.6-11.8
2. Managerial Economics and Financial Analysis by G.Srinivas Rao, D.Hannumantha
Rao and Muhammad Gayasuddin, the HI-TECH Publishers, 2011, Page No.10.22-
10.27.

13. Scope for Mini Project

N.A.

Form No. AC 04. 01. 2016 (R: 30.09.2016)– GMRIT, Rajam, Andhra Pradesh