Double Entry Book

9.6
Keeping-CBSE
Posting of Opening Entry
The balances of assets and liabilities in the Trial Balance are transferre rred in the Balan
Sheet as
as at the end of the accounting year. These assets and liabilities are h.
forward in the beginning of the next year. The entry passed to record such cl
balances of the previous year in the current year is called Opening Entry.
As discussed earlier, all Asset Accounts will show a debit balance. An account for e d
asset will be opened and the relevant amount will be written on the debit side
side asas
Balance brought down (bldy. On the contrary, the Liability Accounts will show e.1
balance. An account for each liability will be opened and the relevant amount will
credit
Written on the credit side as By Balance brought down (b/d).
Illustration 1.
Pass the Opening Entry on 1st April, 2021 on the basis of the following informatin
taken from the books of Raman. Also, post the opening entry.

Cash in Hand
20,00
Sundry Debtors
Stock of Goods 60,00
Plant 40,000
Land and Building 50,00
Sundry Creditors 1,00,00
1,00,000
Solution: In the Books of Raman
JOURNAL
Date Particulars
2021
LF. Dr. C.
April 1 Cash A/c
Sundry Debtors A/c ...Dr 20,000
Stock A/c .Dr. 60,000
Plant A/c .Dr. 40,000
Land and Building A/c ..Dr. 50,000
To Sundry Creditors A/c ..Dr. 1,00,000
10000
To Capital A/c (Note)
1,7000

(Previous year's balances brought forward)

Note: The excess of assets over liabilities is the proprietor's capital and is credited to his unt
Capital Accoul
Ledger
Dr. CASH ACCOUNT
Date Particulars J.F Date Particulars JF
2021
April 1 To Balance b/d 20,000
Dr. SUNDRY DEBTORS ACCOUNT
Date Particulars JF
Date
Particulars JF
2021
April 1 To Balance b/d 60,000
Ledger 9.7

Dr. STOCK ACCOUNT Cr.

Date Particulars J.F Date JF

Particulars
2021
1 To Balance b/d
April 40,000

Dr PLANT ACCOUNT Cr.

Date Particulars J.F Date Particulars J.F
2021
April 1 To Balance b/d 50,000
Dr. LAND AND BUILDING ACCOUNT Cr.

Date Particulars J.F. Date Particulars J.F.

2021

April 1 To Balance b/d 1,00,000

Dr. SUNDRY CREDITORS ACCOUNT Cr.

Date Particulars J.F. Date Particulars J.F

2021
April 1 By Balance b/d 1,00,000
Dr. CAPITAL ACCOUNT Cr.

Date Particulars J.F. Date Particulars

2021
April 1By Balance b/d 1,70,000

BALANCINGOF LEDGER ACCoUNTS

After posting the transactions, accounts are balanced after a certain period but
certainly at the end of the year. Balancing an account means that the two sides of an
account are totalled and the difference in total of the two sides is written on the side
whose total is smaller.
For example, if the total of the credit side is more than the total of debit side of any
account, the difference of amount will be recorded as Balance cld on the debit side and
vice versa on the credit side. If the total of the debit side of any account is more than
the total of credit side, it means that the account has debit balance and if the total of
ne credit side of any account is more, it will show a credit balance. The debit balance
1s then written on the debit side as To Balance brought down' or To Balance bld', which
1s the opening balance for the new period. The credit balance is then written on the
Credit side as By Balance brought down'or By Balance bld: This is the opening balance
1or the new accounting year. The total of the debit and credit sides of some accounts
 WIlINICl 1S discussed later) 1s
prepared to verify the arithmetical accuracy of transactions
recorded.
Illustration 2.
Journalise the following transactions and post them in the
2021
Ledger:
April 1Shivam started business with cash
April 2 Deposited in bank 1,00,000
April 3 Bought goods for cash 70,000
April 4 Drew cash from bank for office 5,000
April 13 Sold goods to Krishna 1,000
20 Bought goods from Shyam 1,500
April 2,250
April 24 | Received from Krishna
1,500
April 28 Paid Cash to Shyam 2,150
Discount allowed by him 100
April 30 Cash sales for the month 8,000
April 30 Paid Rent 500
April 30 Paid Salary to Ram 3,000
 Ledger 9.9
Solution: In the Books of Shivam
JOURNAL
Particulars
Date LF Dr. () Cr.
2021
April 1 Cash A/c ..Dr. 1 1,00,000
To Capital A/c
4 1,00,000
(Cash invested by Ramesh in the business as capital)

April 2 Bank A/c .Dr. 70,000

To Cash A/c
70,000
(Deposited in the bank)

April 3 Purchases A/c ...Dr. 7 5,000

To Cash AVc
5,000
Goods purchased for cash)

April 4 Cash A/c ...Dr. 1,000

To Bank A/c 1,000
(Cash withdrawn from the bank)

April 13 Krishna ..Dr. 9 1,500

To Sales Ac 8 1,500
Goods sold to Krishna)

April 20 Purchases A/c ..Dr. 7 2,250

To Shyam 10 2,250
(Goods bought from Shyam)

April 24 Cash A/c .Dr. 1,500

To Krishna 9 1,500
(Cash received from Krishna)
April 28 Shyam ..Dr. 10 2,250
To Cash Ae 2,150
To Discount Received A/c (Note 1) 12 100
(Discount allowed by Shyam on payment being made
to him)

April 30 Cash A/c ..Dr. 8,000

To Sales A/c 8 8,000
(Goods sold for cash)
April 30 Rent A/c ..Dr. 15 500
.Dr 14 3,000
Salaries A/c
To Cash A/c 3,500

(Rent and Salary paid) (Note 2)

Total 1,95,000 1,95,000

Not It is a gain so it should be credited.

oes 1. Discount allowed by others is discount received.
2. A combined or compound entry is passed since rent and salary to Ram have been paid in cash on

the same day.

3. Ledger Folios are imaginary.
 Double Entry Book Keeping-CBSE
9.10

Ledger
CASH ACCOUNT
Dr.
Particulars JF.
Date Particulars J.F Date
2021
2021
1,00,000 April 2 By Bank A/c 7006
April To Capital A/c
1
3 By Purchases A/c
April 4 To Bank A/c 1,000 April
April 24 To Krishna 1,500 April 28 By Shyam 2,150
April 30 To Sales A/c 8,000 April 30 By Rent A/c
April 30 By Salaries Ac 3/000
April 30 By Balance c/d 29850
1,10,500 1,10500
May 1 To Balanceb/d 29,850 L
Dr. CAPITAL ACccoUNT

Date Particulars J.F. Date Particulars J.F.

2021 2021
April 30 To Balance cd 1,00,000 April 1 By Cash A/c 1,00,000

Dr. BANK ACCOUNT

Date Particulars J.F. Date Particulars J.F.

2021 2021
April 2 To Cash A/c 70,000 April 4 By Cash A/c 1,000
April 30 By Balance cd 69,000
70,000 70,00

May 1 To Balanceb/d 69,000

Dr. PURCHASES ACCOUNT* C

Date Particulars I.F Date Particulars J.F

2021
April 3 To Cash A/c 5,000
April 20 To Shyam 2,250

Dr. SALES ACCOUNT*

Date Particulars J.F. Date Particulars J.F.

2021
1,500
April 13 By Krishna
8000

April 30 By Cash A/c

Dr. KRISHNA

Date Particulars J.F. Date Particulars JF

2021 2021 1500

April 15 To Sales A/c 1,500 April 24 By Cash A/c

1,500

1,500
Ledger 9.11
SHYAM
Date Particulars AF
Date Particulars
2021 2021
April 28 To Cash A/c 2,150 April 20 By Purchases Ac
To Discount Received A/c
2250
April 28 100
2250 2250
Dr. DISCOUNT RECEIVED ACCOUNT
Date Particulars JF. Date
Particulars F.
2021 2021
April 30 To Balance cdd 100 April 28 By Shyam 100
May 1 By Balance bld 100
Dr. RENT ACCOUNT
Date Particulars JF Date Particulars E
2021 2021
April 30 To Cash A/c 500 April 30 By Balance dd 500
May 1 To Balance b/d 500

Dr. SALARIES ACCOUNT

Date Particulars J.F Date Particulars
2021 2021
April 30 To Cash A/c 3,000 April 30 By Balance dd 3,000
May 1 To Balance b/d 3,000

Illustration 3.
Ashim started a business on 1st April, 2021 with Machinery of 7 10,00,000
of2,50,000 and cash ? 2,50,000.
Prepare the Ledger Accounts and balance them:
2021
April 1 Purchased goods for cash from Raman 137500
April 4 Purchased goods from Naresh 1,00,000
April 6 Sold goods to Gupta &Co. for cash 1.75,000
April 12 Cash deposited in bank 2,00,000
April 14 Purchased machinery by cheque 25,000
April 15 Sold goods to Garg Bros. 75,000
April 16 Returned goods to Naresh (not being as per speciñications) 5,000
April 18| Paid to Naresh by cheque 50,000
April 20 Withdrawn from bank for personal use 25,000
April 25 Received cheque from Garg Bros. and deposited in bank 50,000
April 28 Paid salaries to staff for the month of April 25.000
April 28 Bank advises cheque of Garg Bros. returned unpaid
April 30| Received bank interest 1,000
April 30 Purchased stationery for cash 2,500
April 30 Rebate allowed to Garg Bros. for defects in goods supplied to them 1,500
9.12 Double Entry Book Keeping
CBAn
Solution:
Dr. MACHINERY ACCOUNT

Date Particulars Particulars

F. Date JF
2021 2021
April 1
To Capital A/c 10,00,000 April 30 By Balance dd
April 14 To Bank A/c 25,000 1025186
10,25,000
May 1 To
Balance b/d 10,25,000
102556
Dr. FURNITURE ACCOUNT
Date Particulars J.F Date Particulars JF
2021
2021
April 1 To
Capital A/c 2,50,000 April 30 By Balance c/d
2,50.000
2,50,000 2,50,00
May 1 To
Balance b/d 2,50,000

Dr.
CASH ACCOUNT
Date Particulars J.F Date Particulars JF
2021
2021
April 1 To Capital A/c 2,50,000 April 1 By Purchases A/c 137,500
April 6 To Sales A/c 1,75,000 April 12 By Bank A/c 2.0000
April 28 By Salaries Alc 25,00
April 30 By Stationery Alc 2500
April 30 By Balance c/d 60,000
4,25,000
4,25.00
May 1 To Balance b/d 60,000

Dr.
CAPITAL ACCOUNT
Date Particulars J.F. Date Particulars J.F
2021
2021
April 30To Balance c/d 15,00,000 April 1 By Machinery Alc 10,0000
April 1 By Furniture A/c 2,50.00

April 1 By
Cash A/c 2500

15,00,000 15,0000
May 1By Balance b/d 15,00.00

Dr PURCHASES ACCOUNT
Date Particulars JF Date
Particulars
2021 2021
April 1 To Cash A/c 1,37,500 April 30 2,37.50
To Naresh
By Balance c/d
April 4 1,00,000
2,37,500 2,37,500

May 1 To Balanceb/d 2,37,500

Ledger 9.13

Dr. NARESH C
Date Particulars Date Particulars JF
2021 2021
April 16 To Returns Outward Ac 5,000 April 4 By Purchases A/c 1,00,000
April 18 To Bank A/c 50,000
April 30 To Balance cdd 45,000
1,00,000 1,00,000
May 1 By Balanceb/d 45,000
Dr. SALES ACCOUNT
Date Particulars J.F. Date Particulars JF
2021 2021
April 30 To Balance dd 2,50,000 April 6 By Cash A/c 1,75,000
April 15 By Garg Bros. 75,000
2,50,000 2,50,000
May 1 By Balance b/d 2,50,000

Dr BANK ACCOUNT C
Date Particulars J.F. Date Particulars J.F

2021 2021
April 12 To Cash A/c 2,00,000 April 14 By Machinery A/c 25,000
April 25 To Garg Bros. 50,000 April 18 By Naresh 50,000
1,000 April 20 By Drawings Ac 25,000
April 30 To Interest Received A/c 50,000
April 28 By Garg Bros.
April 30| By Balance c/d 1,01,000
2,51,000
2,51,000
May 1 To Balanceb/d 1,01,000

Dr GARG BROS. Cr
J.F. Date Particulars J.F
Date Particulars
2021
2021 50,000
April 15 To Sales AWc 75,000 April 25| By BankA/c
50,000 April 30 By Rebate Allowed A/c 1,500
April 28 To Bank A/c 73,500
April 30 By Balance c/d
1,25,000 1,25,000
May 1 To Balanceb/d 73,500
REBATE ALLOWED ACCOUNT Cr.
Dr. Particulars JF
F. Date
Date Particulars
2021
2021 April 30 By Balance cld
April 30 To Garg Bros. 1,500 1,500
,500 1,500
1,500
May 1 To Balanceb/d
RETURNS OUTWARD ACCOUNT
Dr. Date Particulars C.
Date Particulars
JF J.F
2021
2021 April 16 By Naresh
5,000
April 30 To Balance c/d 5,000
5,000
1 5,000
May By Balance b/d
5,000
 SALARIES ACCOUNT
Date Particulars J.F. Date Particulars J.F
2021
2021
April 28 To Cash A/Nc 25,000 April 30 By Balance c/d
25,000 25.0
May 1 To Balance b/d 25,000
Dr INTEREST RECEIVED ACCOUNT
Date Particulars J.F. Date Particulars J.F.
2021
2021
April 30 To Balance c/d 1,000 April 30 By Bank A/c
1,000
May 1 By Balance b/d
Dr. STATIONERY ACCOUNT
Date Particulars J.F. Date Particulars J.F.
2021 2021
April 30 To Cash A/c 2,500 April 30 By Balance c/d 250
2,500 2500

May 1 To Balance b/d 2,500

Students are advised to pass Journal entries and thereafter

prepare ledger accoun
Difference between Journal and Ledger
Basis Journal
Ledger
1. Nature of Book It is a book of original or
primary entry. It is a book of final entry.

2. Basis for Preparation Source documents (such as vouchers ctions

Journal is the basis for recording transacu
receipts, etc.) are the basis for recording in the Ledger.
transactions in the Journal.

Recording in the Journal is the first stage.

3 Stage of Recording Recording in the Ledger is the second
It is prepared to record all transactions ofvariou
4. Object It is prepared to see the net effect
Ount

in a chronological order. ransactions affecting a particulard

Journal has five columns: on
5. Format Ledger has four identical columns Particuas

1. Date, 2. Particulars, 3. Ledger Folio, debit and reditsides: 1. Date, 2.

4. Debit Amount, 5. Credit Amount. 3. Journal Folio, 4. Amount