QUANTATIVE MANAGEMENT

•Topic: Journal, Ledger, Trial balance

Presented by,

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JOURNAL

The term JOURNAL has been derived from the French word JOUR which means day.

Thus journal means daily record.

It is the book used for making primary record of day-to-day transactions chronologically.

journal is also called the ‘book of original entry’ or ‘book of prime entry’.

The recording of a transaction in the journal is called JOURNALIZING.

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Specimen of Journal

Date Particulars L/F Debit

amount

Rs.

Credit

amount

Rs.

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Date Particulars L/F Debit amount

Rs.

Credit amount

Rs.

2002

January

1

Cash a/c Dr

Jacob’s capital A/c

(Jacob invest capital into firm)

20,000

20,000

For eg…

On January 1st 2002 Mr. Jacob started business with cash-20000

Journal entry is…..

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Compound entry

When there are two or more transactions of similar nature

occurring on the same day and the entry for the same have more than one debit

or credit, it is called compound entry.

For eg…

On 30th January 2002, salary paid rs.2,000 and rent paid rs.1,000. then

journal entry is

Date Particulars L/F Debit amount

Rs.

Credit amount

Rs.

2002

janury 1

Salary A/c Dr

Rent A/c Dr

Cash a/c

(Salary & rent paid)

2,000

1,000

3,000

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Drawback of journal

It is difficult for the trader to ascertain from the journal the total

amount payable to suppliers, the amount receivable from the

customers, the total amount spent on various items the total amount

of income received, etc.as on a particular date.

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LEDGER

A ledger is a book which contains various accounts where transactions relating

to that account are recorded.

The ledger is a ‘book of second entry’ or ‘final entry’ because transactions

first entered in journal are finally incorporated in the ledger. It is also called the

‘main or the principal book of accounts’ of a business.

The process of recording the transactions in the ledger account by referring to

the journal, is called posting.ANIL@

Specimen of a Ledger AccountName of Account

Date Particulars J/fAmount

Rs .Date Particulars J/f

Amount

Rs .

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TRIAL BALANCEA Trial balance is a statement of balances of all ledger accounts,

prepared at the end of a period, to check the arithmetical accuracy of

the books kept under double entry principles.

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Characteristics

Trial Balance is not a part of double entry.

It is not an account. It is only a list of balances of ledger accounts.

It is prepared on a particular date.

It is prepared before preparing the final accounts.

Total of debit and credit columns must be equal.

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Objectives

To verify the arithmetical accuracy of the accounts.

To find out mistakes and rectify them.

To provide a basis for preparing financial

statements.

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Code no. Name of accountsAmount (Rs)

(debit)

Amount (Rs)

(credit)

Total

Specimen of a Trial balance…..

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Code no. Name of accounts Amount

(debit)

Amount

(credit)

Cash in hand XXX

Cash in bank XXX

Sales XXX

Capital a/c XXX

Bills payable XXX

Sundry debtors XXX

Sundry creditors XXX

Bills receivable XXX

Stock of goods XXX

Purchases XXX

Carriage inwards XXX

Carriage outwards XXX

Sales return XXX

Purchase return XXX

Trial balance as at………..

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Rent paid XXX

Interest paid XXX

Salaries paid XXX

Wages paid XXX

Furniture XXX

Discount received XXX

Commission received XXX

Interest received XXX

Plant & machinery XXX

Land & buildings XXX

Prepaid exps XXX

Drawings XXX

Goodwill XXX

Outstanding exps XXX

Bank loan/overdraft XXX

Total XXX XXXANIL@

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