Ledger Example

As we know that after the entries have been journalized, the next process is to transfer these entries to respective Ledger accounts. This process of transferring the entries from the General Journal to the Ledger is known ‘Posting’. Under this process, various debit and credit transactions are posted to the ledger and at the end of certain period this debit and credit balanced is compared. Following is an example which will make clear how posting to ledger is done:

Illustration

Post the-the following transactions in the books of a trader:-

Debit Balance on January 1, 2013

Cash in Hand $ 8,000, Cash at Bank $ 25,000, Stock of Goods $ 20,000, Building

$ 10,000. Sundry Debtors: Victor $ 2,000 and Rita $ 2,000.

Credit Balances on January 1, 2013:

Sundry Creditors: Albert $ 5,000. Capital $ 55,000

Following were further transactions in the month of January, 2013:

Jan. 1               Purchased goods worth $ 5,000 for cashless 20% trade discount and 5% cash discount.

Jan. 4                 Received $ 1,980 from Victor and allowed him $ 20 as discount.

Jan. 8               Purchased plant from Michael for $ 5,000 and paid $ 100 as cartage for bringing the plant to the factory and another $ 200 as installation charges.

Jan. 12               Sold goods to Robert on credit $ 600.

Jan. 15               Robert became insolvent and could pay only 50 cent in a $.

Jan. 18              Sold goods to Steve for cash $ 1,000.

Solution

Cash A/c

Bank A/c

Stock A/c

Building A/c

Victor A/c

Rita A/c

Albert’s A/c

Capital A/c

Purchase A/c

Discount A/c

Plant A/c

Michael

Sales A/c

Robert’s A/c

Bad Debts A/c