Case Study
Joumalise the following transactions, post
them in the ledger and balance the accounts
in the books of Mr. Rajesh.
2011
Amount
Jan. 1 Storted business with cash 2,00,000
Jon 3 Purchased goods for cash 60,000
Jan. 5 Sold goods to Shyam
60,000
Jan. 6 Sold goods for cash
20,000
Jan. 9 Received cash from Shyam 40,000
Jon. 13 Goods purchased from Rom 40,000
Jan. 20 Cash paid to Rom
20,000
Jan. 25 Paid office rent
4,000
Jan. 31 Poio salaries to staff
20,000
Jon 31 Returned goods by Shyam 10,000
Answers
Answer:
Balancing of an account means the process of equalizing the two sides of an account by putting the difference on the side where amount is short. Where the debit side of an account exceeds the credit side, the difference is put on the credit side, and the account is said to have a debit balance. This balance is brought down on the debit side while reopening the account. Similarly, where the credit side of an account exceeds the debit side, the difference is put on the debit side, and the account is said to have a credit balance. This is brought down on credit side while reopening the account.
The following steps are followed for balancing the accounts:
(i) Total the amounts of debit and credit entries in the account.
(ii) If the debit and credit sides are equal then there is no balance. The account stands automatically
balanced or closed.
(iii) If the debit side total is more, put the difference on the credit side amount column, by writing the words in particulars column “By Balance c/d”. If the credit side total is more, put the difference on the debit side amount column by writing the words in the particulars column “To Balance c/d”.
(iv) After putting the difference in the appropriate side of the account, add both sides of the account and draw a thin line above and below the total.
(v) Bring down the debit balance on the debit side by writing the words in particulars column “To Balance b/d”. Similarly bring down the credit balance on the credit side by writing the words in the particulars column “By Balance b/d”.
Illustration 2:
Journalise the following transactions, post them in the ledger and balance the accounts in the books of Mr. Rajesh.
2013 Rs.
Jan. 1 Started business with cash 2,00,000
Jan. 3 Purchased goods for cash 60,000
Jan. 5 Sold goods to Shyam 60,000
Jan. 6 Sold goods for cash 20,000
Jan. 9 Received cash from Shyam 40,000
Jan. 13 Goods purchased from Ram 40,000
Jan. 20 Cash paid to Ram 20,000
Jan. 25 Paid office rent 4,000
Jan. 31 Paid salaries to staff 20,000
Jan. 31 Returned goods by Shyam 10,000
Read more at : https://www.taxdose.com/balancing-ledger-accounts/