Before the actual preparation of Trial Balance, let discuss 'Ledger' and 'Ledger Posting' which are enumerated below:
Ledger
When the transactions are recorded from the primary books of accounts on permanent basis under double entry system in a summarised and classified form in different accounts and the same is posted in separate pages, it is called a ledger, (i.e. a book which contains records of all transactions permanently, in a summarised and classified form).Since all the transactions are recorded in this book on permanent basis, it is called the book of final entry. Practically; ledger is the principal book of accounts. As a result, all the necessary information relating to any account is available from the ledger: This is most important book of the business and hence is rightly called the king of all books.
Ledger Posting
As soon as a transaction takes place, the same is recorded in the journal in the form of a journal entry. This entry is posted again in the respective ledger accounts under double entry principle from the journal. This is called ledger posting. The following example will make the principle clear:
Example 2 : On 1. 1. 1985, X started business with .a capital of Rs. 4,000.Journal Entries (without narration)
Ledger
When the transactions are recorded from the primary books of accounts on permanent basis under double entry system in a summarised and classified form in different accounts and the same is posted in separate pages, it is called a ledger, (i.e. a book which contains records of all transactions permanently, in a summarised and classified form).Since all the transactions are recorded in this book on permanent basis, it is called the book of final entry. Practically; ledger is the principal book of accounts. As a result, all the necessary information relating to any account is available from the ledger: This is most important book of the business and hence is rightly called the king of all books.
Ledger Posting
As soon as a transaction takes place, the same is recorded in the journal in the form of a journal entry. This entry is posted again in the respective ledger accounts under double entry principle from the journal. This is called ledger posting. The following example will make the principle clear:
Example 2 : On 1. 1. 1985, X started business with .a capital of Rs. 4,000.Journal Entries (without narration)
 |
| Ledger Posting |
 |
| Cash Account |
 |
| Capital Account |
Sub-Division of Ledgers
Where transactions are extensive and numerous it becomes necessary to sub-divide ledger into separate books, although it varies from firm to firm depending on the nature and size of the business unit. The sub-division of ledger is :
Debtors Ledger
It contains the accounts of those custom ers or debtors to whom goods were sold on credit, i.e., for credit sales. It is also called Sold Ledger, Sales Ledger, etc.
Creditors Ledger
It contains the accounts of those suppliers or creditors from whom goods were purchased on credit, i.e. for credit purchases. It is also called Bought Ledger, Purchase Ledger, etc.
General/Nominal Ledger
It contains the ledger relating to Real and Nominal Accounts as well as the totals of Debtors and Creditors Ledger Accounts.
Where transactions are extensive and numerous it becomes necessary to sub-divide ledger into separate books, although it varies from firm to firm depending on the nature and size of the business unit. The sub-division of ledger is :
Debtors Ledger
It contains the accounts of those custom ers or debtors to whom goods were sold on credit, i.e., for credit sales. It is also called Sold Ledger, Sales Ledger, etc.
Creditors Ledger
It contains the accounts of those suppliers or creditors from whom goods were purchased on credit, i.e. for credit purchases. It is also called Bought Ledger, Purchase Ledger, etc.
General/Nominal Ledger
It contains the ledger relating to Real and Nominal Accounts as well as the totals of Debtors and Creditors Ledger Accounts.
PREPARATION OF JOURNAL AND LEDGER
Example 3
Record the following transactions and post them into ledgers:
(i) Started business with a capital of Rs. 5,000.
(ii) Sold goods to Mr. X for Rs. 500
(iii) Received cash from Mr. X Rs. 450 in full settlement.
(iv) Purchased goods from Mr. T. for Rs. 1,700.
(v) Paid to Mr T in full in cash Rs. 1,450.
(vi) Paid Salary lo Mr. Z Rs.300.
(vii) Purchased a plant Rs.1,000.
(viii) Sold goods for Rs.1,300.
(ix) Received interest Rs. 50.
(x) Deposited cash into bank Rs. 1,000.
(xi) Paid wages Rs. 100.
(xii) Withdrew cash from bank for personal use Rs. 200
Example 3
Record the following transactions and post them into ledgers:
(i) Started business with a capital of Rs. 5,000.
(ii) Sold goods to Mr. X for Rs. 500
(iii) Received cash from Mr. X Rs. 450 in full settlement.
(iv) Purchased goods from Mr. T. for Rs. 1,700.
(v) Paid to Mr T in full in cash Rs. 1,450.
(vi) Paid Salary lo Mr. Z Rs.300.
(vii) Purchased a plant Rs.1,000.
(viii) Sold goods for Rs.1,300.
(ix) Received interest Rs. 50.
(x) Deposited cash into bank Rs. 1,000.
(xi) Paid wages Rs. 100.
(xii) Withdrew cash from bank for personal use Rs. 200
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