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Financial Accounting 1
Accounting Cycle
Journalize Transaction
Post to Ledger
Accounts
Prepare Trial Balance
End of Period Adjustments
Prepare Adjusted
Trial Balance
Prepare Financial
Statements
Post Closing Entries
Journal Examples from Handout
Ledger Accounts
• Individual Journal entries are posted into Ledger Accounts
• Also known as T Account• Closing balances of ledger accounts
are transferred to the Trial Balance
Date Particulars Rs. Date Particulars Rs.
To Op Bal b/d By------------
By Closing Bal c/f
Title of AccountDebit Credit
Prepare journal entries and post to the appropriate Ledger Accounts
1. Started business with cash Rs. 100,000
2. Deposited in the bank Rs. 50,000
3. Bought goods for cash Rs. 15000 from Ashok
4. Salary paid to Ashish Rs. 5000
5. Sold good to Amar Rs. 18,000 on Credit
6. Received commission from Anil Rs 6000
Prepare journal Entries in the books of Anand7. Received on from Amar Rs. 12,000
8. Purchased Machinery from Ahmed and co. for Rs. 30,000 on credit
9. Office Rent of Rs. 7500 paid to Landlord Arjun.
10.Defective goods valued at Rs. 3000 received from Amar
11.Returned goods to Ashok Rs. 2000
12.Withdrew Rs. 5000 from the bank for personal use.
Journal Entries in the books of Anand
Debit(Rs.)
Credit(Rs.)
1 Cash A/c 100,000
To Capital Account 100,000
(Being business commenced with Cash)
2 Bank A/c 50,000
To Cash Account 50,000
(Being Cash deposited in Bank)
3 Purchases A/c 15,000
To Cash Account 15,000
(Being goods purchased for cash)
4 Salary A/c 5,000
To Cash a/c 5000
(Being salary paid to Ashish)
Journal entries Continued…
Debit(Rs.)
Credit(Rs.)
5 Amar A/c 15,000
To Sales A/c 15,000
(Being goods sold to Amar on Credit)
6 Cash A/c 6,000
To Commission a/c 6,000
(Being commission recd from Anil)
7 Sales Returns A/c 3,000
To Amar 3,000
(Being defective goods returned by Amar)
8 Cash A/c 12,000
To Amar 12,000
(Being cash received from Amar)
Journal Entries cont…
Debit(Rs.)
Credit(Rs.)
9 Machinery A/C 30,000
To Ahmed and Co. A/c 30,000
(Being Machinery purchased on Cr)
10 Rent A/c 7500
To Cash 7500
(Being office rent paid to Arjun)
11 Ashok A/c 2000
To Purchase Returns 2000
(Being goods returned to Ashok)
12 Drawings A/c 5000
To Bank A/c 5000
(Being cash withdrawn for personal use)
Ledger Accounts
Dr Capital Account Cr
To Balance c/f 100,000 1 By Cash 100,000
100,000 100,000
Dr Cash Account Cr
1 To Capital A/c 100,000 2 By Bank A/c 50,000
6 To Commission 6,000 3 By Purchases A/c
15,000
8 To Amar A/c 12,000 4 By Salary A/c 5,000
10 By Rent 7,500
By Balance C/f
40,500
118,000 118,000
Ledger Accounts
Dr Bank Account Cr
2 To Cash A/c 50,000 12 By Drawings 5,000
By Balance C/f
45,000
50,000 50,000
Dr Purchases Account Cr
3 To Cash A/c 15,000 By Bal C/f 15000
15000 15,000
Salary Account
4 To Cash A/c 5,000 By Bal c/f 5,000
5,000 5000
Ledger Account
Amar Account
5 To Sales A/c 15,000 7 By Sales Return A/c
3,000
8 By Cash 12,000
15,000 15,000
Dr Sales Account Cr
To Bal c/f 15,000 5 By Amar A/c 15,000
15,000 15,000
Dr Commission Account Cr
To Bal c/f 6,000 6 By Cash 6000
6,000 6,000
Ledger Accounts cont.
Dr Sales Return Account Cr
7 To Amar A/c 3000 By Bal C/f 3000
3000 3000
Dr Ahmed and Co. Account Cr
To Bal C/f 30,000 9 By Machinery A/c
30,000
30,000 30,000
Dr Machinery Account Cr
9 To Ahmed & Co.
30,000 By Bal c/f 30,000
30,000 30,000
Ledger Accounts cont….
Dr Rent Account Cr
10 To Cash 7,500 By Bal c/f 7,500
7,500 7,500
Dr Purchase Return Account Cr
To Bal c/f 2,000 11 By Ashok 2,000
2,000 2,000
Dr Ashok Account Cr
11 To Purchase Returns
2,000 By Bal c/f 2,000
2000 2000
Ledger Accounts Cont…
Dr Drawings Account Cr
12 To Bank 5,000 By Bal c/f 5000
5000 5000
Trial BalanceAccount Debit (Rs.) Credit (Rs.)
Capital Account 100,000
Cash Account 40,500
Bank Account 45,000
Purchase Account 15,000
Salary Account 5,000
Sales 15000
Commission 6000
Sales Return 3000
Ahmed & Co 30,000
Machinery 30,000
Rent 7,500
Purchase Returns 2000
Ashok 2000
Drawings 5000
Total 1,53,000 1,53,000
