Peas carefully observe the posting of journal entis into various ledger accounts, Do you see some further calculation in the ashia/cand Mr. Vikas's Capital a/c? What i done i that after Posting all transactions to these accounts, the difference between the debi and credit sides Calculated, This eliference is put on the side with smaller amount in order totally grand totals ofboth sides. The conventions write “To Balancec/d” or “By balance c /” asthe case may be. This procedure is normally dane at the end ofan accounting period, This proces i calla as “balancing of eer accounts ‘Once the ledgers are balanced for one accounting period, thebalance needs tobe carried forward to the next accounting period as a running balance. This is dane by writing “To Balance b/d" ‘or “By balance b/d” as the case may beater the grand totals. This also shown inthe Cash a/ ‘cand Me. Vikas's Capital account ‘Could you now attempt to balance theather ledger accounts andl carry the balances to the next ‘ecounting period? Important note: Please emember the Balances of esinal and rel acount nly ae carried down tothe ‘ext accounting periods they represent resources and obligations ofthe business which will continue to ‘be used and sted respectively in future. Balances of nominal counts (which represent comes ot {ans ed expenses or lses) are not carried dow 0 the next period, Tse balances are talento the ‘raft and Loss account (or income statement) prepared for the period. The net result ofthe P & L account wil sow eter ne income or net ess which wil Increase oc decrease the owner's equity. ‘In the above example, pase note that the blancs of Rental, consultancy Fees account and sly ‘account will nt becarred down the next ered, bu tthe P&L account ofthat ered. A listato, tte have sown i fr Ret ale 22.4 Posting to Ledger Accounts from Subsidiary books Inthe above section, we explained posting to ledger accounts directly on the basis of journal tenes. In practice, however, we know that usef subsidiary books isin vogue. Let us seehow the posting to ledger accounts is done based on these records. For eath ofthe subsidiary books, there isa ledger account 8 for purchase book, there is Purchase account, for sales book there's sales a/c, for eash book there wil be cash a/c 35 well, ‘as Banke a/eand s0 on Let us continue wth illustration seen inthe section 222.1 192223 above and post the totals Ino respective ledger accounts RECOUNTING