TS Grewal Class 11 Accountancy Chapter 6: Ledger Solutions and Concepts

Journal entries are posted to the Ledger by transferring each transaction to the corresponding Ledger accounts.

Steps:
1. Identify accounts involved in the journal entry.
2. Post the debit amount to the debit side of the relevant Ledger account.
3. Post the credit amount to the credit side of the relevant Ledger account.
4. State the opposite account as the "particulars".
5. Ensure correct date and reference are entered.
Following proper rules helps in accurate account classification.

Rules of Debit and Credit:

• Assets: Increase is debited, decrease is credited
• Liabilities: Increase is credited, decrease is debited
• Capital: Increase is credited, decrease is debited
• Incomes/Gains: Increase is credited, decrease is debited
• Expenses/Losses: Increase is debited, decrease is credited

A Ledger account typically has a 'T' shape format with two sides:

- Debit Side (Left): Records increases in assets and expenses
- Credit Side (Right): Records increases in liabilities, capital, or income

Each side contains columns for date, particulars, Journal Folio (J.F.), and amount.

Journal is the book of original entry where transactions are recorded in chronological order, while Ledger is the book of final entry where transactions are classified account-wise.

- Journal: Chronological, simple format, records each transaction just once
- Ledger: Classifies by account, includes all entries for each account, used for balance extraction

This classification helps track the effect of each transaction on different accounts.

A Trial Balance is prepared by listing all Ledger account balances (debit and credit) on a specific date.

Steps:
1. Draw balances (totals) from all Ledger accounts
2. List all debit and credit balances separately
3. Total both columns to check for agreement

The agreement of totals ensures accuracy in Ledger postings.

Common errors:
- Posting to the wrong side (debit instead of credit)
- Omitting a transaction
- Posting incorrect amounts
- Wrongly writing the particulars or date

To avoid errors:
- Follow systematic posting procedures
- Double-check each entry
- Understand debit and credit rules
- Practice with solved examples and use checklists

Ledger preparation is essential because:
- It provides the summary of all transactions account-wise
- Facilitates the preparation of Trial Balance and financial statements
- Helps in identifying and rectifying errors
- Aids in assessing business performance and balances of individual accounts

Example:
Journal Entry: Cash A/c Dr. ₹10,000
     To Capital A/c ₹10,000

Ledger Posting:
- In Cash Account (Debit Side):
To Capital ₹10,000
- In Capital Account (Credit Side):
By Cash ₹10,000

To balance a Ledger account:

1. Total both debit and credit sides
2. Find the greater total
3. Subtract the lesser total from the greater
4. Record the balancing amount as 'Balance c/d' (carried down) on the lesser side
5. Bring down the balance as 'Balance b/d' (brought down) at the start of the next period

Exam questions from the Ledger chapter include:
- Practical problems on posting entries from Journal to Ledger
- Preparing/account formatting (T-accounts)
- Multiple choice and short answer questions on rules of debit and credit
- Theory questions on differences between Journal and Ledger
- Balancing ledger accounts and error identification

Accounts that increase with a debit and decrease with a credit:
- Asset accounts (like Cash, Equipment, Debtors)
- Expense accounts (like Salary, Rent, Wages)
Debiting these accounts increases their balance, while crediting decreases it.