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Question

Write the process of preparing ledger from a journal.


Solution

The process of preparing ledger from Journal can be explained with the help of an example. Let us suppose that machinery is purchased from Mr. X, so, the journal entry will be:

Machinery A/c

Dr.

 

To Mr. X Account

 

In this example, Machinery Account is debited and Mr. X Account is credited. Let us understand the process of preparing ledger from the journal entry.

Account which is debited in the entry:

Step 1: Indentify the account in ledger that is debited, i.e., ‘Machinery Account’.

Step 2: Enter date in the debit side of the ‘Machinery Account’ in the ‘Date’ column.

Step 3: Enter the name of the account as ‘Mr. X Account’ (which is credited in the entry) in the ‘Particulars’ column in the debit side of the Machinery Account.

Step 4: Enter the page number of the journal, where the entry is recorded in the ‘J.F.’ (journal folio) column.

Step 5: Post the corresponding amount in the ‘Amount’ column, which is recorded against ‘Machinery Account’ in the journal entry.

Account which is credited in entry:

Step 1: Indentify the account in ledger that is credited, i.e., ‘Mr. X Account’.

Step 2: Enter date in the credit side of ‘Mr. X Account’ in the ‘Date’ column.

Step 3: Enter the name of the account as ‘Machinery Account’ (which is debited in the entry) in the ‘Particulars’ column in the credit side of the ‘Machinery Account’.

Step 4: Enter the page number of the journal where the entry is recorded in the ‘J.F.’ (journal folio) column.

Step 5: Post the corresponding amount in the ‘Amount’ column, which is recorded against ‘Mr. X Account’ in the journal entry.


Accountancy
Financial Accounting- I - NCERT Solutions (2019)
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