Journal, Ledger, Trial Balance
Journal, Ledger, Trial Balance
Journal, Ledger, Trial Balance
Topics covered:
Accounting Equation
Journal
Ledger
Trial Balance
Assets=Sources
Assets=Liabilities+ Capital
Assets=Liabilities+Owner’s equity
CLASSIFICATION
OF
ACCOUNTS:
Personal Account:-
Natural Personal Account i.e. account of natural or physical persons e.g Ram’s A/c,
Sita’s A/c etc.
Representative personal accounts –these accounts are called representative personal account as they
represent certain person behind them e.g outstanding expenses account,income received account
Impersonal Account:-
concern and with which the business is carried on.Real or assets accounts may be-
Nominal Account: Nominal or fictitious accounts are accounts of the expenses and
loses and income and gains which a concern earn in the course of its business-
allowed.
RULES OF DEBIT AND CREDIT
Personal Accounts:
Debit the receiver
and
credit the giver
Real Accounts:
Debit what comes in
and
Credit what goes out
Nominal Account:
Debit expenses and loses
and
Credit incomes and gains
JOURNAL
• Does not facilitate the internal check system since the journal
can be handled only by one person
• Errors of calculation
• Errors of omission of one entry
• Posting to the wrong side of an account
• Errors in amount
Errors not revealed by the Trial Balance:
• Errors of Commission
• Errors of Omission
• Errors of Principle
• Compensating errors
• Errors of Original entry
•Complete Reversal of entries
Methods for preparation of trial
balance
• Total method • Balances method
Trail balance is • Trail balance is made
prepared by taking on the basis of the
into account the totals balances of the
of debit and credit accounts. it is also
balances of each known as net trial
account recorded in balance.
the ledger.