Page 80 - DMGT104_FINANCIAL_ACCOUNTING

Financial Accounting

Notes fortnight or a month. For example, if rent as an expense is shown in the debit in Journal, this will
be posted in the debit side of the Rent (Expenses) A/c in the Journal. The proforma of a Ledger
account is given below:
Proforma of an Account
Name of Account………
Date Particulars L.F. Amount (Dr.) Date Particulars L.F. Amount (Cr.)
( ) ( )

In the above proforma of an account, there are two sides of an account. Left hand side is debit
side and right hand side is credit side. In both the sides, the first column is for date and second
column for details, third column for the Journal folio number and in the last column the amount
of the transaction is recorded.
Rules of Posting in Ledger Account

At the time of posting of transactions from Journal to ledger the following points/rules should
be kept in mind:
1. In the debit side of a ledger account, the word ‘To’ is used while in the credit side word ‘By’
is used.
2. All those accounts are opened in the Ledger which are given in the Journal.
3. All the debit items of an account given in Journal are posted in the debit side of the
respective account. And all the credit items of an account given in Journal are posted in the
credit side of the respective account in ledger.

4. The name of the account, in which posting is being made, is not written. But the posting is
done by the name of other account given in the opposite side of that entry in the Journal.
5. At the time of posting if the page is full and account is not complete, its total is carried to
the next page and then remaining posting is done.

5.3 Balancing

There can be several transactions relating to a particular account in the different places in the
Journal. Such transactions are collected and recorded in the concerned account. At the end of the
accounting period, the businessman becomes interested to know the position of these accounts.
The position of an account is determined by calculating the net balance of the account for which
debit and credit sides of the account are totalled separately. If total of debit side is greater than
the total of credit side, difference is written in the credit side of the account and that is carried to
next year. And if the total of credit side is greater than the total of debit side, difference is written
in debit side and carried to next year. Thus totals of both the sides become equal and account is
closed.

Did u know? How are the account transactions classified?
The accounts are classified through the preparation of ledger.

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