Journal entries in the ledger What is a Journal Entry? Journal entry is a form of bookkeeping. All the economic or non-economic transactions in the business are recorded in the journal entries showing a company's debit or credit balances. It is a double-entry accounting method and requires at leastRead more
Journal entries in the ledger
What is a Journal Entry?
Journal entry is a form of bookkeeping. All the economic or non-economic transactions in the business are recorded in the journal entries showing a company’s debit or credit balances. It is a double-entry accounting method and requires at least two accounts or more in a transaction.
The journal entry helps to identify the transactions. We use journals to get a running list of business transactions. Each journal entry provides this specific information about a transaction:
Date of the transaction.
Accounts involved in it.
Payer, payee, receiver, etc.
Account name.
Debit and credit of money.
General Ledger
After the transactions are recorded in the journal, they are posted in the principal book called ‘Ledger’. A ledger account contains information about a specific account. It contains the opening balance as well as the closing balances of an account. It summarizes the business transactions.
Transferring the entries from journals to respective ledger accounts is called ledger posting or posting to the ledger accounts. Balancing of ledgers is carried out to find differences at the year’s end, it means finding the difference between the debit and credit amounts of a particular account.
For instance,
Suppose goods were bought for cash. While passing the journal entry, we’ll be debiting the purchases a/c and crediting the cash a/c by stating it as, ‘To Cash A/c’.
Now, this entry will be affecting both the purchases account and the cash account. In the cash account, we’ll be debiting purchases. Whereas in the purchases account, we’ll be crediting the cash. That’s how it works in the double-entry bookkeeping system of accounting.
Example
Mr. Tony Stark started the business with cash of $100,000. He bought furniture for business for $15,000. He further purchased goods for $75,000. He hired an employee and paid him a salary of $5,000.
Now, we’ll be journalizing the transactions and posting them into the ledger accounts.
Journal Entries
Recording into Ledger Account
Cash A/c
Capital A/c
Furniture A/c
Purchases A/c
Salary A/c
Note: The balance b/d is not applicable as this is the business’ commencement year.
Credit Note A credit note is a document which generally evidences a sales return. It is created by the seller and sent to the buyer acknowledging the receipt of goods returned by the buyer. On the basis of it, the seller promises to pay back the buyer for the goods returned to him or adjust the amouRead more
Credit Note
A credit note is a document which generally evidences a sales return. It is created by the seller and sent to the buyer acknowledging the receipt of goods returned by the buyer. On the basis of it, the seller promises to pay back the buyer for the goods returned to him or adjust the amount in future transactions.
A credit note is also created when the buyer has sent excess money by mistake against the goods delivered to him.
In Tally, a credit note is created using a credit note voucher. Now, a credit note can only be created only if a sales entry has been made.
Hence first, we will be creating a sales entry and then the credit note.
Creation of sales entry in sales voucher ( If not done before)
The step to create a sale entry in Tally prime is as follows:
Gateway of Tally –> Vouchers –> Press F8 to open sales voucher
Enter the details of sales in the sales voucher like I have entered in my sale voucher and accept.
Here, my debtor is Rama and I have sold 1000pcs of Linc pens@Rs. 10 to him
Important things to consider:
If no ledger accounts, stock items and stock units are created in your company, you can easily create them while in the voucher creation menu itself. Just press Alt + C in the field where you need to enter party name, stock item name or stock unit name and the respective creation menus will open.
After entering the item details, a new menu will open which will ask for which account to be credited for the sale entry. As we know, a sales account is credited, so you have select the sales account from the menu or simply create a Sales account if not created by pressing Alt + C. Below is that menu:
#2 Creation of credit note
If already in the voucher creation menu, just press Alt + F6 to open the credit note voucher.
Enter the party name and a menu will open, asking for a tracking number. No need to enter any details there.
Next, another menu will open asking for party details. Select the name of the respective debtor.
Next enter the details of stock items returned as I have done:
I have made a credit note for 100pcs of Linc pens returned by Rama.
After entering all the details, press Enter and accept.
You can verify the effect of this sales voucher by performing the following steps.
Gateway of Tally –> Display more reports –> Account Books –> Ledger –>Select the debtor account from the list of ledgers.
After opening the ledger, if you see that the debtor account is credited by an amount through a credit note voucher, then it can be said that you have performed the steps correctly.
Deleting a company in Tally Prime Tally prime is the latest version of Tally ERP software. In its functionality, it is slightly different from its previous version Tally ERP 9. Hence, the process of deleting a company in Tally Prime is different from that in Tally ERP 9. To delete a company in TallRead more
Deleting a company in Tally Prime
Tally prime is the latest version of Tally ERP software. In its functionality, it is slightly different from its previous version Tally ERP 9. Hence, the process of deleting a company in Tally Prime is different from that in Tally ERP 9.
To delete a company in Tally Prime, you need to be in the Gateway of Tally window which looks the following:
On the right-hand side, there is a menu where is an option named ‘F3: Company’. You can either click on it or simply press F3.
After clicking on the option, the Company menu where a list of names of the companies created in the Tally is there, along with some options above the company name list.
You have to select the option named, ‘Shut Company’. After clicking the option, the screen will display a ‘Shut Company’ menu.
From there, you have to select the company you want to delete. Like in the example given, I have selected the company named Rain Ltd.
After selecting the name of the company you want to delete, a confirmation dialog box will appear.
You have to click OK and the company will be shut down or deleted.
In short, the steps to delete a company in Tally Prime are as follows:
Gateway of Tally –> Press F3 –> Select ‘Shut Company’ option –> Select the name of the company –> Confirm and press OK
Therefore, 2) Asset is the correct option. Explanation The petty cash book is managed and made by not an accountant but the petty cashier and is done to record small incomes and expenditures that are not recordable in the cash book. Therefore, the desired result we obtain from the deduction oRead more
Therefore, 2) Asset is the correct option.
Explanation
The petty cash book is managed and made by not an accountant but the petty cashier and is done to record small incomes and expenditures that are not recordable in the cash book. Therefore, the desired result we obtain from the deduction of the total expenditure and total cash receipt is the closing balance of the petty cash book.
Petty cash refers to the in-hand physical cash that a business holds to pay for small and unplanned expenses.
Asset: The closing balance of the petty cash book is considered an asset because the petty cash book is a type of cash book. The petty cash book also deals in outflow and inflow of the cash, it also maintains and records income and expenditure that are similar to the cash book.
The petty cash book since being a part of the cash book, which records all the inflow and outflow of cash in a business, which is an asset, thus petty cash book’s closing balance is considered an asset. Also, the balance of the petty cash book is never closed. Their closing balance is carried forward to the next year.
Liability: The closing balance of the petty cash book is not considered a liability because that closing balance of the petty cash book doesn’t create a liability for the business. In fact, the closing of the petty cash book is placed under the head current asset in the balance sheet as mentioned above, it’s a part of the cash book which records the transactions of cash a/c which is an asset itself.
Expenses or Income: It is not an expense because the closing balance of the petty cash book is calculated by deducting the total expenditure from the total cash receipt.
That is an asset and it is considered to be a current asset, neither an income nor an expense. It is used for paying out petty expenses.
Therefore, the closing balance of the petty cash book is considered an asset.
Capitalize in Accounting The term 'capitalized' in accounting means to record an expenditure as an asset on the balance sheet. Capitalization takes place when a business buys an asset that has a useful life. The cost of the relevant asset is then allocated to expense over its useful life i.e charginRead more
Capitalize in Accounting
The term ‘capitalized’ in accounting means to record an expenditure as an asset on the balance sheet. Capitalization takes place when a business buys an asset that has a useful life. The cost of the relevant asset is then allocated to expense over its useful life i.e charging depreciation, etc. This means that the relevant expenditure will appear on the balance sheet instead of the income statement. The capitalizing of the expenses is a benefit for the company as the assets bought by them for the long-term are subjected to depreciation and capitalizing expenses can amortize or depreciate the costs. This process is called capitalization.
In order to capitalize any expense, we’ll have to make sure it meets the criteria stated below.
The assets exceeding the capitalization limit
The companies set a capitalization limit, below which the expenses are considered too immaterial to be capitalized. Therefore, the limit is supposed to be followed and considered as it controls the capitalization of the expenses. Generally, the capitalization limit is $1,000.
The assets have a useful life
The companies also seek to generate revenues for a long period of time. Thus, the asset should have a long and useful life at least a year or more. Thereby, the business can record it as an asset and depreciate it over its valuable life.
Most of the important principles of capitalization in accounting are from the matching principle.
Matching Principle
The matching principle states that the expenses in the accounting should be recorded when they are incurred and not when the payment is made. This helps the business identify the amounts spent to generate revenue.
For e.g, the company bought machinery for manufacturing goods with more efficiency. It is supposed to have a useful life for a period of over 10 years. Instead of expensing the entire cost of the machinery, the company will write off (depreciated) the cost of the asset over its useful life i.e 10 years. Therefore, the asset will be written off as it is used and these types of assets are automatically used as capitalized assets.
Benefits of Capitalization
Capitalization is of course recording expenses as an asset but this indeed has benefits.
This reduces the fluctuation of income over time as the fixed assets (long-term) are costly. For the small business owners or the small firms, it’s even greater.
The capitalization of expenditures increases the company’s asset balance, without changing the company’s liability balance. This improves the financial ratios like the current ratio.
Small businesses have a provision for tax benefits related to the depreciation of capitalized assets. Section 179 of depreciation allows those business owners to depreciate certain assets quicker than others are allowed.
Land in the balance sheet The land is an asset and hence it is shown on the asset side of the balance sheet. On the asset side of the balance sheet, the land is stated under the heading long-term assets. Balance Sheet (for the year…) Explanation The land is a fixed asset and is supposed not to be caRead more
Land in the balance sheet
The land is an asset and hence it is shown on the asset side of the balance sheet.
On the asset side of the balance sheet, the land is stated under the heading long-term assets.
Balance Sheet (for the year…)
Explanation
The land is a fixed asset and is supposed not to be cashed, consumed, last, sold, or written off within one accounting year and is purchased for long-term use. The fixed assets are also called non-current assets and the reason behind it is that current assets are easily converted into cash within one year and they are not.
The sole purpose of buying fixed assets like the land is that they are planned to be used for the long term in order to generate income.
Examples of fixed assets – Land, buildings, furniture, plants & equipment, etc.
Also called non-current assets and capital assets.
Why is it shown on the asset side?
The land is an asset, although it is not depreciable it is still considered to be an asset because just like other assets the business spends its own money to acquire it, and it gives them a long-term benefit while reselling it.
Therefore, the land is shown on the asset side under the fixed asset heading.
20 Journal Entries Journal is the book of initial entry, hence the transactions are at first recorded in the journal by the way of journal entries. Journal entries are made as per the double entry system of accounting, where for each transaction one account is debited and another account is creditedRead more
20 Journal Entries
Journal is the book of initial entry, hence the transactions are at first recorded in the journal by the way of journal entries.
Journal entries are made as per the double entry system of accounting, where for each transaction one account is debited and another account is credited.
In the case of compound journal entries, one set of accounts is debited and one set of accounts is credited.
The amount of debit and credit always remains the same.
For example, when cash is introduced into a business, it affects two accounts: Cash A/c and Capital A/c. The accounts are debited and. credited as per the golden rules of accounting.
The journal entries which I have provided are based on the following transactions and events:
The business started with Rs. 1,00,000
Bought machinery for Rs. 15,000 and furniture for Rs. 10,000
Purchased goods of Rs. 20,000 with cash
Bought Stationery for Rs. 500
Cash deposited into bank Rs. 40,000
Goods sold to Matt for Rs. 15,000
Purchased goods from Uday of Rs. 30,000
Being Rs. 5,000 rent paid for premises
Cheque received from Matt of Rs. 15,000
Defective goods returned to Uday returned of Rs. 2,000
Cash sales of Rs. 25,000
Carriage Inward paid Rs. 700
Cash withdrawn from bank Rs. 15,000
Full payment made to Uday in cash. Discount received from Uday Rs. 1000.
Refreshments given to customers of Rs. 200
Goods sold to Shyam for Rs. 7,500
Goods purchased from Ram of Rs. 50,000
Salaries paid to employees by bank Rs. 5,000
Good sold to Suri for Rs. 25,000
Insurance premium paid of Rs. 1,500 by the bank.
Journal Entries
The journal entries based on the above are as follows:
Ledgers
Ledger is known as the book of final entry. It is the book where the transactions related to a specific account are posted. This posting of transactions is done from journal entries.
The posting of journal entries into the ledger is performed in the following way:
The journal entry of cash sales is :
Cash A/c Dr.
Amt
To Sales A/c
Amt
Here, Cash A/c is debited to Sales A/c. So, in the Cash A/c ledger, posting will be made on the debit side as “To Sales A/c”
In the Sales A/c ledger, the posting will be made on the credit as “By Cash A/c” because Sales A/c is credited to Cash A/c
For creating ledgers, journal entries are a prerequisite.
Now, the ledgers to be created as per the journal entries made above are as follows:
Cash A/c
Bank A/c
Capital A/c
Furniture A/c
Machinery A/c
Purchase a/c
Sales A/c
Matt A/c (Debtor)
Uday A/c (Creditor)
Rent A/c
Purchase Return A/c
Stationery A/c
Carriage Inward A/c
Refreshment A/c
Shyam A/c (Debtor)
Ram A/c (Creditor)
Suri A/c (Debtor)
Refreshment A/c
Discount Received A/c
The account ledgers are as follows:
Trial Balance
A trial balance is a statement that is prepared to check the arithmetical accuracy of books of accounts.
In this statement, the total of all accounts having debit balance and the total of all accounts having credit balance is computed. If the total of debit and credit matches, then it can be said that the books of accounts are arithmetically accurate.
Here also we have prepared the trial balance by computing the total of accounts having debit balances and the total of accounts having credit balances
The debit column total and credit column total are matching. Hence, we can say that the books of accounts we have prepared are arithmetically accurate.
Note: Matt A/c and Uday A/c have not appeared in the trial balance because they do not have any carrying balance.
How do you record journal entries in ledger?
Journal entries in the ledger What is a Journal Entry? Journal entry is a form of bookkeeping. All the economic or non-economic transactions in the business are recorded in the journal entries showing a company's debit or credit balances. It is a double-entry accounting method and requires at leastRead more
Journal entries in the ledger
What is a Journal Entry?
Journal entry is a form of bookkeeping. All the economic or non-economic transactions in the business are recorded in the journal entries showing a company’s debit or credit balances. It is a double-entry accounting method and requires at least two accounts or more in a transaction.
The journal entry helps to identify the transactions. We use journals to get a running list of business transactions. Each journal entry provides this specific information about a transaction:
General Ledger
After the transactions are recorded in the journal, they are posted in the principal book called ‘Ledger’. A ledger account contains information about a specific account. It contains the opening balance as well as the closing balances of an account. It summarizes the business transactions.
Transferring the entries from journals to respective ledger accounts is called ledger posting or posting to the ledger accounts. Balancing of ledgers is carried out to find differences at the year’s end, it means finding the difference between the debit and credit amounts of a particular account.
For instance,
Suppose goods were bought for cash. While passing the journal entry, we’ll be debiting the purchases a/c and crediting the cash a/c by stating it as, ‘To Cash A/c’.
Now, this entry will be affecting both the purchases account and the cash account. In the cash account, we’ll be debiting purchases. Whereas in the purchases account, we’ll be crediting the cash. That’s how it works in the double-entry bookkeeping system of accounting.
Example
Mr. Tony Stark started the business with cash of $100,000. He bought furniture for business for $15,000. He further purchased goods for $75,000. He hired an employee and paid him a salary of $5,000.
Now, we’ll be journalizing the transactions and posting them into the ledger accounts.
Journal Entries
Recording into Ledger Account
Cash A/c
Capital A/c
Furniture A/c
Purchases A/c
Salary A/c
Note: The balance b/d is not applicable as this is the business’ commencement year.
See lessHow to make credit note in tally prime?
Credit Note A credit note is a document which generally evidences a sales return. It is created by the seller and sent to the buyer acknowledging the receipt of goods returned by the buyer. On the basis of it, the seller promises to pay back the buyer for the goods returned to him or adjust the amouRead more
Credit Note
A credit note is a document which generally evidences a sales return. It is created by the seller and sent to the buyer acknowledging the receipt of goods returned by the buyer. On the basis of it, the seller promises to pay back the buyer for the goods returned to him or adjust the amount in future transactions.
A credit note is also created when the buyer has sent excess money by mistake against the goods delivered to him.
In Tally, a credit note is created using a credit note voucher. Now, a credit note can only be created only if a sales entry has been made.
Hence first, we will be creating a sales entry and then the credit note.
Creation of sales entry in sales voucher ( If not done before)
The step to create a sale entry in Tally prime is as follows:
Gateway of Tally –> Vouchers –> Press F8 to open sales voucher
Enter the details of sales in the sales voucher like I have entered in my sale voucher and accept.
Here, my debtor is Rama and I have sold 1000pcs of Linc pens@Rs. 10 to him
Important things to consider:
#2 Creation of credit note
If already in the voucher creation menu, just press Alt + F6 to open the credit note voucher.
Enter the party name and a menu will open, asking for a tracking number. No need to enter any details there.
Next, another menu will open asking for party details. Select the name of the respective debtor.
Next enter the details of stock items returned as I have done:
I have made a credit note for 100pcs of Linc pens returned by Rama.
After entering all the details, press Enter and accept.
You can verify the effect of this sales voucher by performing the following steps.
Gateway of Tally –> Display more reports –> Account Books –> Ledger –>Select the debtor account from the list of ledgers.
After opening the ledger, if you see that the debtor account is credited by an amount through a credit note voucher, then it can be said that you have performed the steps correctly.
See lessHow to delete company in tally?
Deleting a company in Tally Prime Tally prime is the latest version of Tally ERP software. In its functionality, it is slightly different from its previous version Tally ERP 9. Hence, the process of deleting a company in Tally Prime is different from that in Tally ERP 9. To delete a company in TallRead more
Deleting a company in Tally Prime
Tally prime is the latest version of Tally ERP software. In its functionality, it is slightly different from its previous version Tally ERP 9. Hence, the process of deleting a company in Tally Prime is different from that in Tally ERP 9.
To delete a company in Tally Prime, you need to be in the Gateway of Tally window which looks the following:
On the right-hand side, there is a menu where is an option named ‘F3: Company’. You can either click on it or simply press F3.
After clicking on the option, the Company menu where a list of names of the companies created in the Tally is there, along with some options above the company name list.
You have to select the option named, ‘Shut Company’. After clicking the option, the screen will display a ‘Shut Company’ menu.
From there, you have to select the company you want to delete. Like in the example given, I have selected the company named Rain Ltd.
After selecting the name of the company you want to delete, a confirmation dialog box will appear.
You have to click OK and the company will be shut down or deleted.
In short, the steps to delete a company in Tally Prime are as follows:
Gateway of Tally –> Press F3 –> Select ‘Shut Company’ option –> Select the name of the company –> Confirm and press OK
See lessThe closing balance of petty cash book is considered as?
Therefore, 2) Asset is the correct option. Explanation The petty cash book is managed and made by not an accountant but the petty cashier and is done to record small incomes and expenditures that are not recordable in the cash book. Therefore, the desired result we obtain from the deduction oRead more
Therefore, 2) Asset is the correct option.
Explanation
The petty cash book is managed and made by not an accountant but the petty cashier and is done to record small incomes and expenditures that are not recordable in the cash book. Therefore, the desired result we obtain from the deduction of the total expenditure and total cash receipt is the closing balance of the petty cash book.
Petty cash refers to the in-hand physical cash that a business holds to pay for small and unplanned expenses.
Asset: The closing balance of the petty cash book is considered an asset because the petty cash book is a type of cash book. The petty cash book also deals in outflow and inflow of the cash, it also maintains and records income and expenditure that are similar to the cash book.
The petty cash book since being a part of the cash book, which records all the inflow and outflow of cash in a business, which is an asset, thus petty cash book’s closing balance is considered an asset. Also, the balance of the petty cash book is never closed. Their closing balance is carried forward to the next year.
Liability: The closing balance of the petty cash book is not considered a liability because that closing balance of the petty cash book doesn’t create a liability for the business. In fact, the closing of the petty cash book is placed under the head current asset in the balance sheet as mentioned above, it’s a part of the cash book which records the transactions of cash a/c which is an asset itself.
Expenses or Income: It is not an expense because the closing balance of the petty cash book is calculated by deducting the total expenditure from the total cash receipt.
That is an asset and it is considered to be a current asset, neither an income nor an expense. It is used for paying out petty expenses.
Therefore, the closing balance of the petty cash book is considered an asset.
See lessWhat is the meaning of capitalized in accounting?
Capitalize in Accounting The term 'capitalized' in accounting means to record an expenditure as an asset on the balance sheet. Capitalization takes place when a business buys an asset that has a useful life. The cost of the relevant asset is then allocated to expense over its useful life i.e charginRead more
Capitalize in Accounting
The term ‘capitalized’ in accounting means to record an expenditure as an asset on the balance sheet. Capitalization takes place when a business buys an asset that has a useful life. The cost of the relevant asset is then allocated to expense over its useful life i.e charging depreciation, etc. This means that the relevant expenditure will appear on the balance sheet instead of the income statement. The capitalizing of the expenses is a benefit for the company as the assets bought by them for the long-term are subjected to depreciation and capitalizing expenses can amortize or depreciate the costs. This process is called capitalization.
In order to capitalize any expense, we’ll have to make sure it meets the criteria stated below.
The assets exceeding the capitalization limit
The companies set a capitalization limit, below which the expenses are considered too immaterial to be capitalized. Therefore, the limit is supposed to be followed and considered as it controls the capitalization of the expenses. Generally, the capitalization limit is $1,000.
The assets have a useful life
The companies also seek to generate revenues for a long period of time. Thus, the asset should have a long and useful life at least a year or more. Thereby, the business can record it as an asset and depreciate it over its valuable life.
Most of the important principles of capitalization in accounting are from the matching principle.
Matching Principle
The matching principle states that the expenses in the accounting should be recorded when they are incurred and not when the payment is made. This helps the business identify the amounts spent to generate revenue.
For e.g, the company bought machinery for manufacturing goods with more efficiency. It is supposed to have a useful life for a period of over 10 years. Instead of expensing the entire cost of the machinery, the company will write off (depreciated) the cost of the asset over its useful life i.e 10 years. Therefore, the asset will be written off as it is used and these types of assets are automatically used as capitalized assets.
Benefits of Capitalization
Capitalization is of course recording expenses as an asset but this indeed has benefits.
See lessWhere is land on a balance sheet?
Land in the balance sheet The land is an asset and hence it is shown on the asset side of the balance sheet. On the asset side of the balance sheet, the land is stated under the heading long-term assets. Balance Sheet (for the year…) Explanation The land is a fixed asset and is supposed not to be caRead more
Land in the balance sheet
The land is an asset and hence it is shown on the asset side of the balance sheet.
On the asset side of the balance sheet, the land is stated under the heading long-term assets.
Balance Sheet (for the year…)
Explanation
The land is a fixed asset and is supposed not to be cashed, consumed, last, sold, or written off within one accounting year and is purchased for long-term use. The fixed assets are also called non-current assets and the reason behind it is that current assets are easily converted into cash within one year and they are not.
Why is it shown on the asset side?
The land is an asset, although it is not depreciable it is still considered to be an asset because just like other assets the business spends its own money to acquire it, and it gives them a long-term benefit while reselling it.
Therefore, the land is shown on the asset side under the fixed asset heading.
See lessI need 20 journal entries with ledger and trial balance?
20 Journal Entries Journal is the book of initial entry, hence the transactions are at first recorded in the journal by the way of journal entries. Journal entries are made as per the double entry system of accounting, where for each transaction one account is debited and another account is creditedRead more
20 Journal Entries
Journal is the book of initial entry, hence the transactions are at first recorded in the journal by the way of journal entries.
Journal entries are made as per the double entry system of accounting, where for each transaction one account is debited and another account is credited.
In the case of compound journal entries, one set of accounts is debited and one set of accounts is credited.
The amount of debit and credit always remains the same.
For example, when cash is introduced into a business, it affects two accounts: Cash A/c and Capital A/c. The accounts are debited and. credited as per the golden rules of accounting.
The journal entries which I have provided are based on the following transactions and events:
Journal Entries
The journal entries based on the above are as follows:
Ledgers
Ledger is known as the book of final entry. It is the book where the transactions related to a specific account are posted. This posting of transactions is done from journal entries.
The posting of journal entries into the ledger is performed in the following way:
The journal entry of cash sales is :
Here, Cash A/c is debited to Sales A/c. So, in the Cash A/c ledger, posting will be made on the debit side as “To Sales A/c”
In the Sales A/c ledger, the posting will be made on the credit as “By Cash A/c” because Sales A/c is credited to Cash A/c
For creating ledgers, journal entries are a prerequisite.
Now, the ledgers to be created as per the journal entries made above are as follows:
The account ledgers are as follows:
Trial Balance
A trial balance is a statement that is prepared to check the arithmetical accuracy of books of accounts.
In this statement, the total of all accounts having debit balance and the total of all accounts having credit balance is computed. If the total of debit and credit matches, then it can be said that the books of accounts are arithmetically accurate.
Here also we have prepared the trial balance by computing the total of accounts having debit balances and the total of accounts having credit balances
The debit column total and credit column total are matching. Hence, we can say that the books of accounts we have prepared are arithmetically accurate.
Note: Matt A/c and Uday A/c have not appeared in the trial balance because they do not have any carrying balance.
See less