Cash Book, Ledger, Subsidiary Books
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Transcript of Cash Book, Ledger, Subsidiary Books
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04/12/23 IBS Mumbai - MBA Prep. 2011 1
LEDGER POSTING
The process of transferring debits and credits from the journal to the ledger account …
Prof. Madhu Iyengar
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04/12/23 IBS Mumbai - MBA Prep. 2011 2
Lesson Plan
1. Steps in ledger posting2. Balancing the ledger3. Cash Book- Three types4. Petty Cash book5. Subsidiary Books6. Journal Proper7. Caveats
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04/12/23 IBS Mumbai - MBA Prep. 2011 3
Steps in ledger posting
• If the account is real or personal , then opening balance has to be posted.
• For assets, on the debit side “To balance b/f” in the particulars column
• For liabilities an the credit side “By balance b/f should be written against the amount.
• Date should be entered • The title of the account should be entered in the particulars
column.• The corresponding number of the journal should be entered in
JF column• Amount should be mentioned in the amount column against the
title of the account.
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04/12/23 IBS Mumbai - MBA Prep. 2011 4
Ledger---Format
An example:26/05/09 Rs 1000 Cash received from Vinay
Cash A/c
Dr. Cr.
Date Particulars JF Amount(Rs)
Date
Particulars JF Amount(Rs)
26.05.09 To Vinay 1000
Vinay’s A/c
Date Particulars
JF Amount(Rs)
Date Particulars JF Amount(Rs)
26.05.09 By cash A/c 1000
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04/12/23 IBS Mumbai - MBA Prep. 2011 5
Balancing of ledger
• Balancing of an account is an important step towards preparation of final accounts.
• The debit and credit column of all accounts are made equal by balancing.
• If debit is greater than credit then the difference is placed on the credit side
• If credit is greater that debit then the difference is placed on the debit side
• The real and personal accounts are balanced and the balance is carried forward in the next accounting year
• Nominal accounts are not balanced, the total is transferred to trading and profit and loss account at the end of the year
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04/12/23 IBS Mumbai - MBA Prep. 2011 6
Cash Book
Cash book serves as a primary book as well as ledger.
Various types of cash book:
Single column
Double column
Three column
Multiple Column
Petty Cash book
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04/12/23 IBS Mumbai - MBA Prep. 2011 7
Subsidiary books
Purchases Sales Book Purchase Returns Sales Returns Bills Receivable Bills Payable Journal Proper
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04/12/23 IBS Mumbai - MBA Prep. 2011 8
Caveats
Books of business not of individual is written The business’ name shall never appear as account in
its books In the ledger accounts, the name of the same
account never appears The transaction is always to be looked from our
(business) perspective