Question

Distinguish between self balancing and sectional balancing

Answer 1

Self-Balancing :

(i) Control accounts are prepared in all the ledgers. In the general ledger, debtor’s ledger adjustment account and creditor’s ledger adjustment account are prepared.

(ii) A trial balance can independently be prepared from each one of the ledgers.

(iii) All the ledgers form part of double entry system.

Sectional :

(i) Control accounts are prepared in general ledger only. The names of these control accounts are total debtors accounts and total creditors account. Personal ledgers namely debtors ledger and creditors ledger have no control account.

(ii) A trial balance can be prepared only from the general ledger.

(iii) Double entry system is completed in the general ledger only. Debtor’s ledger and creditor’s ledger serve only as memorandum books of account.