Ledger - Cost Accounting Techniques, Cost Accounting B Com Notes | EduRev

Cost Accounting

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Ledger Account is a journal in which a company maintains the data of all the transactions and financial statement. Company’s general ledger account is organized under the general ledger with the balance sheet classified in multiple accounts like assets, Accounts receivable, account payable, stockholders, liabilities, equities, revenues, taxes, expenses, profit, loss, funds, loans, bonds, stocks, salaries, wages, etc. In this article, we will learn more about Ledger Account format and examples, types of the ledger, ledger posting, and we will also provide ledger account template in excel, google spreadsheet, and PDF format.

General Ledger Account Meaning and Definition
Ledger is a book that contains the accounts. Any financial statement related to the financial position of the company emerges only from the accounts. Thus, this ledger is known as the principal book. So, the result of all this is that it is necessary to relate all the information for any account available is from the ledger. This book of accounts is the most important book for any business and that is why it is known as the king of all books. Also, the ledger book is also known as the book of the final entry. The Ledger account is thought of the book that has all the accounting information of the company.
Usually, a ledger account contains many things. Some of the things include dates, particulars, amount, and j.f. This specimen is standardized across all the different places in India.
Anywhere you go, you will find this specimen only. Also, in ledger accounts, this specimen is used for writing the entries of the accounting. Furthermore, ledger accounts also include the ledger posting
Types of Ledger
There are 3 types of Ledgers –

  • Sales Ledger
  • Purchase Ledger
  • General Ledger

1. Sales Ledger – Sales Ledger is a ledger in which the company maintains the transaction of selling the products, services or cost of goods sold to customers. This ledger gives the idea of sales revenue and income statement.
2. Purchase Ledger – Purchase Ledger is a ledger in which the company organizes the transaction of purchasing the services, products, or goods from other businesses. It gives the visibility of how much amount the company paid to other businesses.
3. General Ledger – General Ledger is divided into two types – Nominal Ledger and Private Ledger. Nominal ledger gives information on expenses, income, depreciation, insurance, etc. And Private ledger gives private information like salaries, wages, capitals, etc. Private ledger is not accessible to everyone.
Ledger Account Examples
Assets

  • Cash
  • Land
  • Accounts receivable
  • Equipment

Liabilities

  • Debt
  • Accounts Payable
  • Loans
  • Accrued expenses

Stock

  • Stockholders Equity
  • Common Stocks
  • Retained Earnings

Operative Revenues

  • Sales
  • Services Fees

Operating Expenses

  • Salaries and wages
  • Office Expenses
  • Depreciation Expense

Ledger Account Format and Template
Following image shows the format of General Ledger Account –
Ledger - Cost Accounting Techniques, Cost Accounting B Com Notes | EduRev

Following image shows a sample template of General Ledger Account –
Ledger - Cost Accounting Techniques, Cost Accounting B Com Notes | EduRev
Download Ledger Account in Excel, Google Spreadsheet and PDF Format
Download  General Ledger Account Template in Excel (XLS) Format
General Ledger Account Google Spreadsheet Format – (Go to file and Make a Copy, do not Request for Access)
Download General Ledger Account Template in PDF format

Ledger Posting
Whenever a transaction takes place it is denoted and recorded in the journal in the form of the journal entry. Furthermore, this entry is posted again in their respective journal accounts.
This is done from the journal under the double entry principle. This is known as the ledger posting. There are some rules which you have to adhere to while writing the journal entries for the following accounts.

Rules for writing Journal Entries in Ledger Account
Liabilities: This decreases on the side of debt and increases on the credit side.
Assets: In assets, the figure increases on the left side or you can say the debit side. While this decreases on the credit size or the right side.
Capitals: This follows the same rule as liabilities.
Gains or Income: In this, there is a decrease on the debit side. Also, there is an increase in the credit side.
Expenses: The expenses in the ledger decreases on the credit side while increases on the debit side.
There are some rules that students should understand according to the nature of debit and credit.

Debits and Credits

Credit

  • For properties and goods, the credit represents that the value and stock of goods and properties have decreased. This is moreover related to real accounts.
  • In the case of different accounts like dividend or interest or commission received, or the discount to be gained, it is reported that the firm has made again. This is moreover related to the nominal account.

Debit

  • For goods or properties, the value and use of such goods have been increased. This is related to real accounts.
  • Also, there is a case in which a person has received some benefit against some service given by him or will be rendered by him in the future. Thus, when a person is liable to do something for a firm, the fact is mentioned using that person’s account. This is moreover related to the personal account.
  • For other accounts like expenses or losses, a certain expense has been incurred by the firm or has lost money. This can be related to the nominal account.

Problems and their Solutions:

Problem - 1
Mr. Ramu has the following transactions in the month of July.
Record them into the journal and show postings in the ledger and balance the accounts.
July 1st    :    Ramu started business with a capital of 75,000
1st    :    Purchased goods from Manu on credit 25,000
2nd    :    Sold goods to Sonu 20,000
3rd    :    Purchased goods from Meenu 15,000
4th    :    Sold goods to Tanu for cash 16,000
5th    :    Goods retuned to Manu 2,000
6th    :    Bought furniture for 15,000
7th    :    Bought goods from Zenu 12,000
8th    :    Cash paid to Manu 10,000
9th    :    Sold goods to Jane 13,500
10th    :    Goods returned from Sonu 3,000
11th    :    Cash received from Jane 5,500
12th    :    Goods taken by Ramu for domestic use 3,000
13th    :    Returned Goods to Zenu 1,000
14th    :    Cash received from Sonu 12,000
15th    :    Bought machinery for 18,000
16th    :    Sold part of the furniture for 1,000
17th    :    Cash paid for the purchase of bicycle for Ramu's son 1,500
19th    :    Cash sales 15,000
20th    :    Cash purchases 13,500
Solution:
Journal in thebooks of M/s Rama & Sons
for the period from July 1st, _5 to July 31st, _5

DateV/R
No.
Particulars
L/FAmount
(Dr)
Amount
(Cr)
July 1stCash a/c
To Capital a/c
Dr
75,000
75,000
[Being the amount received from Mr. Ramu, the proprietor as his capital contribution vide receipt no:___ dated:__]
July 1stGoods/stock a/c
To Manu a/c
Dr
25,000
25,000
[Being the value of stock purchased from Mr. Manu vide bill no:___ dated:__]
July 2ndSonu a/c
To Goods/stock a/c
Dr
20,000
20,000
[Being the value of stock sold to Mr.Sonu vide bill no:___ dated:__]
July 3rdGoods/stock a/c
To Meenu a/c
Dr
15,000
15,000
[Being the value of stock purchased from Mr.Meenu on credit vide bill no:___ dated:__]
July 4thCash a/c
To Goods/stock a/c
Dr
16,000
16,000
[Being the value of stock sold to Mr. Tanu for cash vide receipt no:___ dated:__]
July 5thManu a/c
To Goods/stock a/c
Dr
2,000
2,000
[Being the value of stock returned to Mr. Manu vide bill no:___ dated:__]
July 6thFurniture a/c
To Cash a/c
Dr
15,000
15,000
[Being the value of furniture purchased from M/s ___vide bill no:___ dated:__]
July 7thGoods/stock a/c
To Zenu a/c
Dr
12,000
12,000
[Being the value of stock Purchased from Mr. Zenu vide bill no:___ dated:__]
July 8thManu a/c
To Cash a/c
Dr
10,000
10,000
[Being the amount paid to Mr. Manu vide voucher no:___ dated:__]
July 9thJane a/c
To Goods/stock a/c
Dr
13,500
13,500
[Being the value of stock Sold to Ms.Zane vide bill no:___ dated:__]
July 10thGoods/stock a/c
To Sonu a/c
Dr
3,000
3,000
[Being the value of stock returned from Mr. Sonu vide bill no:___ dated:__]
July 11thCash a/c
To Jane a/c
Dr
5,500
5,500
[Being the amount of cash received from Ms. Jane vide cash receipt no:___ dated:__]
July 12thDrawings a/c
To Goods/stock a/c
Dr
3,000
3,000
[Being the amount of stock taken by Ramu for domestic use vide bill no:___ dated:__]
July 13thZenu a/c
To Goods/stock a/c
Dr
1,000
1,000
[Being the amount of stock returned to Mr. Zenu vide bill no:___ dated:__]
July 14thCash a/c
To Sonu a/c
Dr
12,000
12,000
[Being the amount of cash received from Mr. Sonu vide cash receipt no:___ dated:_]
July 15thMachinery a/c
To Cash a/c
Dr
18,000
18,000
[Being the amount paid for machinery purchased to M/s ____vide voucher no:___ dated:__]
July 16thCash a/c
To Furniture a/c
Dr
1,000
1,000
[Being the amount received on sale of furniture vide cash receipt no:___ dated:__]
July 17thDrawings a/c
To Cash a/c
Dr
15,000
15,000
[Being the amount of cash paid for bicycle purchases for proprietor's son vide voucher no:___ dated:__]
July 19thCash a/c
To Goods/stock a/c
Dr
15,000
15,000
[Being the value of stock sold for cash vide receipt no:___ dated:__]
July 20thGoods/stock a/c
To Cash a/c
Dr
13,500
13,500
[Being the value of stock Purchased for vide voucher no:___ dated:__]

General Ledger
[Books of Mr. Ramu]
Ledger - Cost Accounting Techniques, Cost Accounting B Com Notes | EduRev
Ledger - Cost Accounting Techniques, Cost Accounting B Com Notes | EduRev
Ledger - Cost Accounting Techniques, Cost Accounting B Com Notes | EduRev
Ledger - Cost Accounting Techniques, Cost Accounting B Com Notes | EduRev
Ledger - Cost Accounting Techniques, Cost Accounting B Com Notes | EduRev
Ledger - Cost Accounting Techniques, Cost Accounting B Com Notes | EduRev
Ledger - Cost Accounting Techniques, Cost Accounting B Com Notes | EduRev

Problem - 2
Journalise the following transactions in the books of Moon and post them into the ledger for the month of August
Aug 10th    :    Moon commenced business with a capital of 1,50,000
11th    :    Cash deposited into bank 50,000
12th    :    Bought equipment for 15,000
13th    :    Bought goods worth 20,000 from Star and payment made by cheque
14th    :    Sold goods to Sun for 15,000 and payment received through cheque
16th    :    Paid rent by cheque 5,000
17th    :    Took loan from Mr. Storm 25,000
18th    :    Received commission from Mr. Air by cheque 5,000
19th    :    Wages paid 15,000
20th    :    Withdrew from bank for personal use 3,000
21st    :    Withdrew from bank for office use 10,000
22nd    :    Bought goods for 25,000
23rd    :    Cash paid into bank 30,000
24th    :    Interest paid through cheque 2,000
25th    :    Gave loan to Mr.Wind 10,000
26th    :    Amount paid to Mr. Storm on loan account 15,000
27th    :    Salary paid to Manager Mr. Liquid 5,000
28th    :    Postage paid 1,000
29th    :    Received cheque from Mr. Wind on loan account 3,000
30th    :    Sold part of the equipment for 2,000

Journal in the books of M/s Rama & Sons
for the period from August 10th, _5 to August 30th, _5
DateV/R No.ParticularsL/FAmount
(Dr)
Amount
(Cr)
August 10thCash a/c
To Capital a/c
Dr
1,50,000
1,50,000
[Being the amount received from Mr. Moon, the proprietor as his capital contribution vide receipt no:__ dated:__]
11thBank a/c
To Cash a/c
Dr
50,000
50,000
[Being the amount of cash deposited into bank vide bill no:___ dated:__]
12thEquipment a/c
To Cash a/c
Dr
15,000
15,000
[Being the value of equipment purchased from M/s___ for cash vide bill no:___ dated:__]
13thGoods/stock a/c
To Bank a/c
Dr
20,000
20,000
[Being the payment made for stock purchased vide Cheque no:__ dated:__]
14thBank a/c
To Goods/stock a/c
Dr
15,000
15,000
[Being the amount received for stock sold to Mr. Sun vide Cheque no:__ dated:__]
16thRent a/c
To Bank a/c
Dr
5,000
5,000
[Being the amount paid for rent vide voucher no:___ dated:__]
17thCash a/c
To Loan from Storm a/c
Dr
25,000
25,000
[Being the cash received from Mr. Storm as loan vide receipt no:___ dated:__]
18thBank a/c
To Commission a/c
Dr
5,000
5,000
[Being the amount received for commission vide cheque no:__ dated:__]
19thWages a/c
To Cash a/c
Dr
15,000
15,000
[Being the amount paid for wages vide voucher no:___ dated:__]
20thDrawings a/c
To Bank a/c
Dr
3,000
3,000
[Being the amount withdrawn from bank for personal use vide cheque no:___ dated:__]
21stCash a/c
To Bank a/c
Dr
10,000
10,000
[Being the amount withdrawn from bank for office purpose vide cheque no:___ dated:__]
22ndGoods/stock a/c
To Cash a/c
Dr
25,000
25,000
[Being the amount of cash paid for stock purchases vide voucher no:___ dated:__]
23rdBank a/c
To Cash a/c
Dr
30,000
30,000
[Being the amount deposited into bank vide voucher no:___ dated:__]
24thInterest a/c
To Bank a/c
Dr
2,000
2,000
[Being the amount of interest paid vide cheque no:___ dated:__]
25thLoan to Mr. Wind a/c
To Cash a/c
Dr
10,000
10,000
[Being the amount of cash given to Mr. Wind as loan vide voucher no:___ dated:__]
26thLoan from Strom a/c
To Cash a/c
Dr
15,000
15,000
[Being the amount paid to Mr. Storm for repayment of loan vide voucher no:___ dated:__]
27thSalary a/c
To Cash a/c
Dr
5,000
5,000
[Being the amount paid for salary to Mr. Liquid vide voucher no:___ dated:__]
28thPostage a/c
To Cash a/c
Dr
1,000
1,000
[Being the amount paid for purchase of postage vide voucher no:___ dated:__]
29thBank a/c
To Loan to Mr. wind a/c
Dr
3,000
3,000
[Being the Cheque no:___ date___ received from Mr. Wind for repayment of loan]
30thCash a/c
To Equipment a/c
Dr
2,000
2,000
[Being the amount received on sale of equipment vide receipt no:___ dated:__]

General Ledger
[Books of M/s Rama & Sons]
Ledger - Cost Accounting Techniques, Cost Accounting B Com Notes | EduRev
Ledger - Cost Accounting Techniques, Cost Accounting B Com Notes | EduRev
Ledger - Cost Accounting Techniques, Cost Accounting B Com Notes | EduRev
Ledger - Cost Accounting Techniques, Cost Accounting B Com Notes | EduRev
Ledger - Cost Accounting Techniques, Cost Accounting B Com Notes | EduRev
Ledger - Cost Accounting Techniques, Cost Accounting B Com Notes | EduRev
Ledger - Cost Accounting Techniques, Cost Accounting B Com Notes | EduRev
Ledger - Cost Accounting Techniques, Cost Accounting B Com Notes | EduRev
Ledger - Cost Accounting Techniques, Cost Accounting B Com Notes | EduRev

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