Short Notes — Ch 7 Ledger Accounts
⚡ Ch 7 — Ledger Accounts
PYQ: 2 questions — 2024·Q33 · 2024·Q46. MCQ bank: 23 questions (Q79–97 · Q426–429). Short chapter, 1–2 marks nearly every year. Mostly about which side and what it's called.
1️⃣ The core
Ledger = the book containing all accounts (personal, real, nominal).
| It is called | Because |
|---|---|
| Principal book / Primary book | trial balance & final accounts are built from it |
| Book of secondary entry / Book of final entry | it is written after the journal, from the journal |
Journal = book of ORIGINAL entry (first) → Ledger = book of FINAL entry (second)
⭐ POSTING = transferring debit & credit items from the Journal to the Ledger. BALANCING = totalling both sides and putting the difference on the shorter side.
2️⃣ Quick Revision Table
| Point | Answer |
|---|---|
| Group of all accounts of a business | Ledger |
| Journal → Ledger process | Posting |
| Finding the balance of an account | Balancing |
| Left side of a ledger account | Debit (Dr.) |
| Right side of a ledger account | Credit (Cr.) |
| Column linking the entry to the journal | J.F. (Journal Folio) |
| Ledger is prepared from | the Journal |
| Ledger contains | All accounts — personal, real and nominal |
| Debit side > Credit side | Debit balance |
| Credit side > Debit side | Credit balance |
| Both sides equal | account is closed / balanced (nil balance) |
| Difference between the two sides | the balance |
⭐ Which accounts carry which balance
| Normally DEBIT balance | Normally CREDIT balance |
|---|---|
| Assets · Expenses · Losses · Drawings | Liabilities · Capital · Revenue · Gains |
Real accounts always show a DEBIT balance (they are assets). Memory hook: what you own or spend = Debit · what you owe or earn = Credit.
Balancing shorthand
- c/d = carried down — written on the shorter side to close the account
- b/d = brought down — the opening balance of the next period
- A credit balance is written on the debit side as "To Balance c/d", then reappears on the credit side as "By Balance b/d"
3️⃣ 🎯 PYQs from this chapter
2024 · Q46 — The method of transferring items from a journal into their respective ledger accounts is known as
a) Balancing b) Arithmetic c) Entry d) Posting → Ans: D Journalising = writing in the journal · Posting = moving it to the ledger · Balancing = finding the difference.
2024 · Q33 — Suppliers' personal a/c are seen in the
a) Sales Ledger b) Nominal ledger c) Purchases Ledger d) General Ledger → Ans: C Suppliers = creditors → their personal accounts live in the Purchases (Creditors) Ledger. Customers/debtors → Sales (Debtors) Ledger.
4️⃣ The three ledger divisions (often confused)
| Ledger | Contains |
|---|---|
| Purchases / Creditors Ledger | suppliers' personal accounts |
| Sales / Debtors Ledger | customers' personal accounts |
| General Ledger | all real and nominal accounts + the rest |
5️⃣ High-frequency MCQ traps
| MCQ | Point |
|---|---|
| Q79 | Group of all accounts = Ledger |
| Q80 | Asset, Expense and Loss all normally have a debit balance |
| Q81 | Finding the balance = Balancing |
| Q85 / Q87 | Dr. = debit side · Cr. = credit side |
| Q88 | Liabilities, capital, revenue normally have credit balances |
| Q91 | Liability reduced → recorded on the debit side |
| Q92 | Capital increased → recorded on the credit side |
| Q93 | Goods bought on credit from Z → credit Z's account |
| Q94 | Bad debts recovered → Cash Dr · Bad Debts Recovered Cr |
| Q95 | Office typewriter sold → credit the Typewriter A/c (not Sales) |
| Q96 | Ledger is prepared from the Journal |
| Q97 | Real accounts always show debit balances |
| Q426 | Ledger = book of final entry |
| Q427 | J.F. column links the ledger to the journal |
| Q429 | Ledger contains all accounts |
6️⃣ If you remember nothing else
Journal = original entry · Ledger = final entry · Posting = journal→ledger · Balancing = find the difference · Left = Debit, Right = Credit · Assets/Expenses = debit balance, Liabilities/Capital/Income = credit balance · Real accounts always debit · Suppliers → Purchases Ledger, Customers → Sales Ledger
🔗 Related
- Full notes: L-7-LEDGER ACCOUNTS · MCQs Q79–97, Q426–429 in MCQs
- Prev: SN-6-Voucher-Approach · Next: SN-8-Subsidiary-Books
