1. http://www.bookkeeping-course.

com/
Very good concept with example

2. http://www.accountingcoach.com/

Good with example

3. http://en.wikipedia.org/wiki/Accounting

4. other to see
http://simplestudies.com/accounting/lessons/p0501.htm
http://www.middlecity.com/

5. http://www.financial-accounting-bookkeeping.com/accounts-book-keeping-
software.html

accounting software should be compatible to intake the data inputted through a payment voucher.
Normally a payment voucher will contain details of payment, amount to be paid, amount to be adjusted,
gross amount to be paid, net amount to be paid, main head of account and sub-head of account under
which the payment to be made or adjustment to be adjusted.

A bookkeeping software must point out if there is any difference between the debit and credit columns
of the payment voucher. In other words both the debit and credit columns should agree or equal, and if
there is any difference the book keeping software or accounts software should be able to point out
the difference while inputting the payment voucher.

An accounts software should be compatible to create cashbook for the payments and adjustments
inputted through the payment voucher. The accounting software should have the provision to show
the progressive total of the cashbook entries. The account software has to workout progressive total
for a given period.

A finance software should have the provision to add new main head of accounts and sub-head of
accounts. The book keeping software or finance software should also have the provision to delete
the main head of account and sub-head of account if necessary.

A book keeping software or an accounts software should be able to create general ledger folios with
respective head of accounts for the payments and adjustments inputted through the payment voucher.

The accounting software should have the provision to balance the head of accounts in the general
ledger and workout debit balance or credit balance as the case may be. The accounts software should
also be compatible to take the credit or debit balance to the trial balance.

A financial software should have the provision to accept journal vouchers. The financial software
should be able to point out if both the debit and credit columns of the journal voucher does not agree or
not equal. The financial software should be able to make necessary entries in the general ledger under
the relevant head of account, from the journal voucher entries inputted.

A bookkeeping software or account software should be compatible to accept entries inputted through
the subsidiary receipt cash books. Subsidiary receipt cashbooks will mostly consists of the cash or
check drafts received in the organization or company.

These subsidiary receipt cash books will contain an abstract of main head of accounts and sub-head of
accounts under which the cash or checks or drafts have been received. While inputting entries from
subsidiary cash books, the software should be capable to take the entries to the relevant head of
account in the general ledger mostly to the credit side.

An accounts software should have the provision to accept entries from the bank control account
prepared from the bank reconciliation statements. Normally bank control account will contain both debit
and credit entries.
Normally bank control account will contain the essential entries or head of accounts like departmental
opening balance, departmental closing balance, funds transferred from head office to branches, funds
transferred to head office from branches, etc., The accounts software should have the provision to
post entries in the general ledger under relevant head of account inputted through the bank control
account.

An account software or bookkeeping software should be able to construct trial balance from the
general ledger entries already inputted through payment vouchers, journal vouchers, subsidiary
cashbooks, bank control account, etc., The accounting software should be able to arrive progressive
total.

A financial software or book keeping software should have the provision to take a print out of
cashbook, general ledger, trial balance, etc., The financial software should be capable to take print out
for a given period say daily, weekly, fortnightly, monthly, quarterly, half-yearly and annually

What are the important aspects a

general ledger accounting
software should contain?
General ledger accounting is an important aspect in accounting and bookkeeping and following are
the important aspects a general ledger accounting software should contain.

A general ledger accounting software should be able to extract data from the payment voucher
software and create independent ledger folios for each and every head of account or append in the
existing ledger folios. The general ledger accounting software should also be capable to create
independent ledger folios for each and every head of account from the data inputted through payment
vouchers or append data in the existing ledger folios.

A general ledger accounting software should be able to extract data from the
cashbook accounting software and create independent ledger folios for each and every head of
account or append data in the existing ledger folios. The general ledger software should also have the
provision to create independent ledger folios for each and every head of account from the data inputted
through cashbook or append data in the existing ledger folios.

The general ledger accounting software should have the provision to add or delete main head of
accounts and sub-head of accounts. In other words the general ledger accounting software should be
able to add new main head of accounts and sub-head of accounts or delete main head of accounts and
sub-head of accounts already in the data base, as per the user's choice.

The general ledger accounting software should be able to extract data from subsidiary receipt cash
book software and create independent ledger folios for each and every head of account or append
data in the existing ledger folios. The general ledger accounting software should also be compatible
to create independent ledger folios for each and every head of account or append data in the existing
ledger folios from the subsidiary receipt cashbook data.

The general ledger accounting software should be compatible to create independent ledger folios for
each and every head of account or append data in the existing ledger folios from the data extracted with
the journal voucher software. The general ledger accounting software should have the provision to
create independent ledger folios for each and every head of account or append data in the existing
ledger folios from the journal voucher register data.

The general ledger accounting software should have the provision to create independent ledger folios
for each and every head of account or append data in the existing ledger folios from the data extracted
with the bank reconciliation software. The general ledger accounting software should also have the
provision to accommodate data inputted through bank control accounts and create independent
ledger folios for each and every head of account or append data in the existing ledger folios.

The general ledger accounting software should be able to prepare trial balance from the general
ledger folios for a given period as per the user's choice for monthly or quarterly or half-yearly or
annually.

The general ledger accounting software should have the provision to balance each and every head of
account and workout debit balance or credit balance as the case may be for a given period as per the
user choice for monthly or quarterly or half-yearly or annually.

The general ledger accounting software should be able to workout progressive total under each head
of account or carry forward or brought forward the total under any head of account for any given period
as per the user's choice.

Finally the general ledger accounting software should have the provision to take print outs as per the
choice of the user for any head of account or for any given period.

what are the fundamentals of

accounting and bookkeeping,
financial accounting and
bookkeeping concepts, finance
account bookkeeping basics
Debit and credit are the basis for any accounting system. Without this debit and credit nothing can be
accomplished by any establishment which wishes to maintain accounting.

Basically debit means expenditure and credit means revenue. To an organization whether big or small if
some amount has been paid out of the organization then that organization is debiting some expenditure
on certain head of account.

Similarly if an organization is receiving some income from some other

organization or individual for business purpose or the receipt is connected with business transaction
then the organization is getting credit through some head of account.

Normally what type of debit transactions are taking place in an organization?

Here you should note that whether you run a small company or medium company or large size company
or small shop or medium shop or large departmental store accounting principle is common to all.

All payments made for the purchases of stocks in the organization.

All payments made for trading expenditures like transportation, handling charges, storage charges,
commission charges, etc.,

All payments made for the establishment charges like pay and allowances to staff, bonus, etc,

All payments made for the administrative expenses like rent, taxes, electricity charges, stationary and
printing, telephone, fax and other communication charges, advertisement charges, books and
periodicals, office expenditures etc.,

All payments made for maintenance and repairs to buildings, godowns, vehicles, furniture and fixtures,
plant and machinery, improvement on buildings.

All payments made for miscellellaneous expenditures like legal charges, insurance charges, audit fees,
sales tax, income tax, depreciation, training expenditure, losses written off and other miscellaneous
expenditures not covered in any particular head of account.

All payments made for interest and bank charges like interest paid on loans, interest on security deposit.
All payments made for deposits which can be received later like telephone deposits, electricity deposits,
rental deposits, postal deposits, etc.,

All payments made for the purchase of fixed assets like land, buildings, vehicles, furniture and fixtures
and other assets which are permanent in nature.

All payments made in advance but will be adjusted later like purchase of stocks connected with the
trading of the organization.

All payments made for advance payments like staff advances but will be adjusted later from the salary
of the employees.

Normally what type of credit transactions are taking place in an organization?

All amounts transferred from head office to branch offices.

All amounts received by way of sales in the organization.

All amounts received by way of rent, commission, interest.

All amounts received by way of deposits like security deposit from the contractors etc,

All amounts recovered from the advances already paid to staff.

All amounts already paid to suppliers as advance and adjusted later.

Any other amounts not covered in any head of account.

What are the importance of payment

voucher in accounting and
bookkeeping?
A payment in an organization should be made on proper document which should
contain all relevant details of payment. It is called payment voucher. This payment voucher is the
authority for making any payment in an organization.

This payment voucher is the official document for making any payment in an organization. Payment
voucher is the source for posting the details into the General ledger.

Payment voucher is the authority required by the auditors while certifying the accounts of the
organization. Payment voucher should contain all relevant details of the payments made.

Following is the format of a payment voucher normally prepared in an organization.

Payment voucher

Name of the organization

Voucher no

Date of transaction

Name of the payee (to whom the payment is made)..................................

Particulars of payment (Brief details of natures of payment)........................

Amount both in figures and words...................................

Head of account (Payment made under which head of account).....................

Debit (Gross payment)

Credit (net payment + adjustment)

Authority to pass the payment (Signature of the person who is designated to make payment)

Acknowledgement from the payee (Signature of the person who receives the payment)

Payment made under cheque no and date.

Explanation for each column has been specified below.

Name of the organization: Name of the organization or company name may be specified.

Voucher number: Each payment voucher should be numbered. Voucher numbers should be assigned
right from the beginning of the financial year and to be closed at the end of the financial year.

For example if the financial year is beginning from 1st April the voucher number for the financial year
begins at 1. If the financial year ends at 31st March and if the voucher number ends with 9999 then the
payment voucher prepared for the financial year from 1st April to 31st March is 9999.

Voucher numbers for the next financial year should start from 1 to consecutively and it should not start
with 10000.

Name of the payee means the person or the company to whom the payment is made.

Date of transaction means date on which payment is made.

Particulars of payment: Brief details of payment like what purpose the payment is made, under what
authority or order the payment is made and other important details relevant to the payment.

It means all payments should be made on a proper order or authority. In some organization they may
issue orders with number and date to make a particular payment. The number and date of the orders
should be specified here. The order may be like this A1/10001/2008 dated 27-04-2008 for making
payment to Rent.

Amount: Here the net amount to be paid should be specified both in numbers and words.

Head of Account: It means under what head of account the expenditure should be debited is to be
provided here.

For example if the payment is made for rent it should be specified as: Head of account: Administrative
expenses-rent.

Administrative expenses are the main head of account and rent is the sub-head of account.

While specifying head of account both main head of account and sub-head of account should be
specified.

Debit: Here the gross payment to be paid to the payee should be specified.

Credit: Under this column if any adjustment is made with the payment to the nominee it should be
specified with head of account.

FAQs about payment voucher

What is a payment voucher?
A payment voucher is an abstract of payment with relevant documents connected with the payment.

What is a payment voucher number?

Payment voucher number is a number assigned to each payment to identify the payment and for
record purpose.

Whether payment voucher number has to assign for every payment?

Yes. Payment voucher number has to be assigned for every payment.

How to assign payment voucher number?

Payment voucher number should start from 1.

When the first payment voucher number starts?

At the beginning of the financial year on the first day of the financial year on the first
transaction voucher number starts.

Whether voucher number has to be assigned for every payment and transaction?
Yes. Separate voucher number should be assigned for every payment and transaction.

Whether the voucher number should be closed at the end of the day or it should be
continued on the next day?
If there are 10 transactions in a day voucher numbers have to be assigned from 1 to 10 and
at the beginning of the next day the voucher number should starts with 11 and it should
keep on going for every day till the end of the financial year.

What is a financial year or accounting year?

Financial year or accounting year 2008-2009 means 12 months period. It may be from First
April to 31st March of every year. For Example: 1-4-2008 to 31-3-2009.

Whether fresh payment voucher number starts at the beginning of the next month or it will
continue from the previous month closing?
No. It will continue from the previous month closing. For example if the voucher number
closed at 31 in the month of April the voucher number for the first day may month is 32 and
it will go till the end of may or subsequent months.

What is the date of payment voucher number?

Date of payment voucher number means the date on which the cheque is drawn. For
example if the date of the cheque for the payment voucher is 1-04-2008 then the payment
voucher date is 1-04-2008 and it will be for record purpose.

How to preserve the payment voucher?

Payment voucher is the authenticated record for the payments made. It should be neatly
bound with all the supporting documents. It should be preserved carefully for auditing
purpose. Auditors will require this basically for auditing purpose. Normally a bunch of
payment vouchers for every month should be bound and a brief note with how many voucher
numbers with number and month it related to be specified for easy verification purpose.

At the beginning of next financial year whether the payment voucher number should
continue from the previous year?
No. In the next financial year fresh voucher number should be assigned and start.

What are the documents to be enclosed in the payment voucher?

Authoritative orders to make payment. Order should contain how much amount to be paid,
whom to be paid, purpose of payment. Authenticated records such as invoice claim of the
payee duly verified by the passing authority to make payment.

After making payment what should be noted in the payment voucher?

Once the payment has been made and cheque issued a note stating that "paid and
cancelled" should be noted and signed by the passing authority.

What should be the next step at the end of the day after all the payments have been issued?

Postings have to be made in the General Ledger in the respective head of account with
reference to the payment vouchers.
how to prepare cash book, how to
maintain cashbook, what is the
cashbook format
After the Payment voucher is prepared the entries has to be recorded in the cash book. Cashbook is
the main record for recording all the payments and adjustments. Cashbook entries are originating from
the Payment voucher. It is from the cashbook entries into the General Ledger are made. Any
payment is compulsorily entered into cash with reference to the Payment voucher. Cash book has to
be maintained for each financial year.

How to enter the Payment voucher details in the debit side of cash
book?

Under the date column the date of Payment voucher should be entered.

Under the Payment voucher no column Payment voucher number assigned to the payment should be
noted.

Under the details column: Main head of account and sub-head of account under which payment should
be noted and underlined. For example if the main head of account for the payment is Administrative
Expenses and the sub-head of account is Rent it should be specified as follows.

Administrative Expenses-Rent A/C

The details as to whom the payment and what authority the payment is made should also are specified
here.

For example if the payment is made to "A&Co" for Rent under the authority no A1/10009/2008 dated 27-
04-2008 the details should be specified as follows.

Administrative Expenses: Rent

Paid to A&Co towards the Rent for administrative buildings for the month of April-2008 as per the orders
A1/10009/2008 dated 27-04-2008 vide cheque no 234567/1-04-2008

The details should be specified only within the particulars column and it should not go beyond to the
particulars column.

Under the bank column the net amount to be paid or the amount paid in cheque should be specified.

Under the adjustment column the adjustment amount if any adjusted against the gross payment should
be specified. For example if the gross amount is $1000 and the adjustment amount is $100, an amount
of $900 should be specified in the bank column and an amount of $100 should be specified in the
adjustment column.

General format of a cashbook

Name of the organization:
Cash book for the month of:..............
Dr
Date Payment voucher no L/F No Details Bank Adjustment
Cr
Date Payment voucher no L/F No Details Adjustment
Payment
L/F
Date voucher Details Bank Adjustment
No
no
 Administrative Expenses: Rent
Paid to A&Co towards the Rent
for administrative buildings for the
11/04/2008 14 201/1 month of April-2008 as per the 900 100
orders A1/10009/2008 dated 10-
04-2008 vide cheque no
234567/11-04-2008

In the credit side (left side) of the cash book the details of adjustment such as main head of account
and sub-head of account should be specified.

Payment L/F
Date Details Adjustment
voucher no No
Interest received
Interest adjustment from A&Co as per
11/04/2008 14 205/1 100
the orders A1/10009/2008 dated 10-
04-2008

Here the L.F no is the General Ledger Folio or page number and volume where the cash book entry is
posted.

FAQs about cashbook and cashbook maintaining methods

whether separate cash book has to be maintained for each day or for each month or each year?
In order to minimize the stationary separate cash book need not be maintained for each day or each
month. It can be used continuously for the entire financial year. But maintaining cash book for every
month will be easy for future references. But separate cash book should be maintained for every
financial year.

whether cash book total should be summed up daily?

Yes. Cash book both in debit and credit should be summed up and total arrived daily and the total
should be carried over to next day till the end of the month. At the beginning of the next month fresh
total should be started and it should not be carried over from previous month.

Where to tally the cash book?

Separate cheque issue register should be maintained while issuing cheque for every payment. It should
be maintained date wise as follows.

Date Voucher no. Cheque no. Amount.

It should be summed up daily and at the end of the month the total payment in the cheque register and
the total amount arrived in the debit column of the cash book should tally.

whether the main head of account and sub-head of account should be underlined in the cashbook?
To look distinct the main head of account and sub-head of account may be underlined with distinctive
color.

Ex: Main head of account: Administrative Expenses Sub-head of account: Rent

whether the cash book should be attested by the competent authority?

Yes. While passing payment the passing authority should compare the Cash book, cheque, and the
entry in the cash book and countersign.

what is the ladder of payment?

Orders for making payment (Normally these orders will be issued from the administrative wing or
commercial wing of the organization) ---->Processing the order with relevant documents and to ensure
whether all the documents are available for making payment----> Preparation of Payment
voucher---------->Writing of cheque-------->Cash book------> Passing of cheque and payment------
>making entry in the cheque register----->Sending of cheque------>getting acknowledgement from the
payee.

What are the common mistakes while writing up Cash book?

If the payment voucher contains orders for issuing payment for $1010 the cheque has to be issued for
$1010. But some times due to mistake and oversight the cheque may be drawn for $1100. This mistake
can be found only at the time auditing.

Another mistake possible is Payment voucher contains orders for issuing payment for $1010, cheque
was also drawn for $1010, but while writing Cash book the amount will be entered as $1100. This
mistake can be found at the time of bank reconciliation.

What is a receipt register?

Receipt register is like a Cash book. Cash book is meant for payments. Receipt register is meant for
receipts in the organization. Like entering all the payments in the Cash book with head of accounts
receipt register is for entering all receipts with relevant head of account.

The receipt register should contain details all the amounts received in the
organization. Receipt register has to be maintained head of account wise. Whenever an amount is
received it should be entered in the receipt register. The head of account under which the receipt is
received along with other details of receipt such as cheque no, from whom it has been received, etc.,
should be entered.

The format of a receipt register is as follows :

Name of
Receipt D.D/Cheque
Date the Date
No No
customer

Head of Amount Amount Closing

account received remitted balance

The entire amount received should be remitted into the bank and Bank reconciliation has to be done
to ensure whether all the remitted amounts have been credited in the bank accounts.

Whether all the amounts remitted into the bank may be credited in the month itself?

Sometimes it may not be possible. Normally amount remitted into the bank will be credited within the
permissible days by the bank. Sometimes it may not be possible. For example amounts remitted on the
last day of the month may not be credit on the day itself. Hence such amounts should be listed out and
shown as pending realization in the Bank reconciliation. While drawing the bank control account and
arriving departmental closing balance these amounts will be taken into account.

Monthly abstract should be drawn head of account wise for all the receipts entered in the Receipt
register. Format

Abstract for the

month of..........

Ledger
Head of
folio Amount
Account
no
Postings have to be made in the General Ledger from the monthly abstract head of accounts.

What is a journal voucher, how to

prepare journal voucher
Journal voucher is like a Payment voucher. While Payment voucher is important for making
payments and to make entries in the General Ledger, journal voucher is also important in the
accounting field.

Mostly journal vouchers are prepared for adjustment entries for the amount already paid or already
received but later adjusted into relevant heads of accounts.

Journal voucher is also prepared for rectification of errors in the heads of

accounts. When an accountant made a mistake while posting in the General Ledger there is no need to
strike the wrong entry and write the correct entry. In accounting principle it is wrong.

Like a Payment voucher is entered into the Cash book and subsequent postings are made in the
General Ledger, journal voucher is also entered into the journal day book and subsequent postings are
made in the General Ledger.

Journal voucher is like a life saving drug to the accountant when he/she made a mistake in the
General Ledger.

Following is the general format of a journal voucher:

Name of the organization

Journal voucher

Journal voucher no :
Date :

Head of Account Dr Cr

Narration

Signature

Journal voucher no: It means every journal voucher has to be assigned a number consecutively. Ex:
J.V.no.1 Here 1 means J.V.number.

Date: Date on which the J.V. was prepared.

Head of Account: Under what head of account the J.V. has to be prepared.

Dr: Amount to be debited

Cr: Amount to be credited

Narration: Purpose and reference of J.V. prepared should be stated here.

Signature: It means the person who approves the J.V. should sign here.

Situations where to use the journal voucher:

When there is a wrong posting in the General Ledger between the head of accounts journal has to be
prepared.
Example: Instead of debiting into the Electricity charges a sum of $1000 has been debited in
Establishment charges Account.

Here the mistake has to be rectified only through journal voucher. Journal voucher has to be
prepared as follows.

Name of the organization: A to Z Co., Ltd.,

Journal voucher no: 14
Date: 14-04-2008

Head of Account Dr Cr
Administrative charges A/C: Electricity charges 1000 -----
To - -
Establishment charges - 1000
Total 1000 1000
Being a sum of $1000 wrongly debited into Establishment
charges A/C vide payment voucher number 9/9-4-2008 is now
rectified
Establishment charges have been credited now through the above J.V to nullify the wrong debit already
made under Establishment charges.

Example: Instead of posting $1100 into establishment charges account a sum of $1000 only has been
posted into the establishment charges account. The difference of $100 has to be rectified as follows.

Name of the organization: A to Z Co., Ltd.,

Journal voucher no: 15
Date: 14-04-2008

Head of Account Dr Cr
Establishment charges 100 -
To - -
Festival advance - 100
Total 100 100
Being a sum of $100 omitted to post in Establishment charges
account vide payment voucher no 15/9-04-2008 is now rectified
By debiting $100 the short-debit will be now rectified.

When there is an adjustment for the amount paid in suspense account journal voucher has to be
prepared at the time of final settlement.

Example: A sum of $1000 paid as advance towards transport and handling charges vide payment
voucher 16/9-04-2008 has been adjusted.

Name of the organization: A to Z Co., Ltd.,

Journal voucher no: 16
Date: 14-04-2008
Head of Account Dr Cr
Transport and handling charges A/C 1000 -
To - -
Advance for Movement - 1000
Total 1000 1000
Being a sum of $1000 paid as advance for movement vide
Payment voucherno 17/9-4-2008 has been adjusted.
By crediting the Suspense account-Advance for movement through this J.V, the amount already under
Suspense account under Advance for movement will be cleared.

When there is an adjustment for the amount received in suspense account, journal voucher has to be
prepared at the time of final settlement. Example: A sum of $10000 received in advance for the sale of
television has been adjusted.

Name of the organization: A to Z Co., Ltd.,

Journal voucher no: 18
Date: 14-04-2008

Head of Account Dr Cr
Advance collection A/C 10000 -
To - -
Sale Account-Television - 9000
Transport and handling charges A/C - 1000
Total 10000 10000
Being a sum of $10000 received as advance collection for the
sale of television vide cash receipt no.336/5-04-2008 has been
adjusted
By debiting the amount already credited under Advance collection account will be now cleared.

accounting general ledger, general

ledger systems, general ledger
account
General ledger is a ledger which contains brief details of all transactions both debit and credit in an
organization. All payment details and receipt details are posted in the general ledger head of account
wise.

General ledger should be segregated head of account wise. Each head of account should be allotted
sufficient pages required for postings from Cash book.

Every entry in the Cash book both debit and credit should be posted daily in the
general ledger head of account wise. At the end of the month each head of accounts debit should be
summed and balance should be arrived. Balance means whether the particular head of account is debit
balance or credit balance at the end of the month.

If the balance is debit balance it should be taken to debit column of the Trial balance.

If the balance is credit balance it should be taken to credit column of the Trial balance.

General format of general ledger.

Peter England Ltd.,

Administrative
Expenses:Rent

Payment
Cashbook
Voucher no/
Journal
Date Journal Details Debit Credit
register
voucher
Folio no
no
14-04- To A to Z
18 27/1 2000 ---
2008 co
As already said each head of account should contain separate folio for postings from Cash book for all
the twelve months and all the days in a year.

Date means Payment voucher date.

Voucher no means voucher number assigned to the Payment voucher.

Journal voucherno means journal voucher number assigned

Cash bookfolio means page no of the Cash book where the particular voucher is entered.

Journal voucher folio number means where the particular journal voucher is entered in journal
register.

Details: Here brief details about the debit or credit should be specified.

While making entry in the debit column of the general ledger gross amount need to be entered. Gross
amount means net amount paid plus the amount if any adjusted.

If there is any adjustment entry in the cashbook it should be posted in the credit side of the relevant
head of account.

An index with all head of accounts has to be drawn in the general ledger to easily locate the postings in
the head of accounts.

Let us see here how to close the general ledger at the end of the month and prepare Trial balance.

1, Payment vouchers entered in the cashbook should be posted into the ledger head of account wise.

2, All amounts received vide Receipt register should be entered into the general ledger head of
account wise.

3, Journal vouchers entered in the journal registers should be entered into the general ledger head of
account wise.

4, Receipts and payments as per Bank control account should be entered into the general ledger
head of account wise. Bank control account is prepared with reference to the Bank reconciliation.

5, Debit and credit columns should be summed up at the end of the month and arrive whether the
particular head of account is debit balance or credit balance.

6, Debit balance or credit balance the balance as the case may be taken to Trial balance.
how to maintain general ledger, how
to make general ledger postings
Where from the entries coming to General ledger?
1, Payment vouchers entered in the cashbook should be posted into the General Ledger head of
account wise.

2, Amounts received vide Receipt register should be entered into the general ledger head of account
wise.

3, Journal vouchers entered in the journal registers should be entered into the
General Ledger head of account wise.

4, Receipts and payments as per Bank control account should be entered into the general ledger head
of account wise. Bank control account is prepared with reference to the Bank reconciliation.

whether General Ledger entries to be made daily?

General Ledger entries are to be made daily from Cash book, Receipt register and journal register.

General Ledger entries at the end of the month may be made after the completion of Bank
reconciliation.

When to close the General Ledger?

Before drawing a monthly Trial balance General Ledger has to be closed i.e. at the close of month.

What is debit balance in the general ledger

Balances are to be arrived at the month end in each head of account in general ledger. Normally every
head of account will contain both debit and credit entries. At the end of every month after completion of
all postings from all sources all the debits and credits have to be summed up. If the debit balance
exceeds the credit balance then the particular head of account is debit balance for that particular month.

Example for debit balance head of account in the general ledger

Peter England Ltd.,

Administrative
Expenses: Rent

Payment
Voucher Cashbook
no/ Journal
Date Details Debit Credit
Journal register
voucher Folio no
No
14-04-
18 27/1 To A to Z co 2000 ---
2008
18-04- To Breeze &
21 28/1 3000 ---
2008 co
19-04- To Fredrik &
22 29/1 4000 ---
2008 Co
30-04- To Macleen &
23 30/1 5000 ---
2008 Co.,
Current month
---- ---- ---- 14000 ---
total
Previous month
---- ---- ---- ----- ---
balance
Balance up to
---- ---- ---- the end of this 14000 ---
month

how to arrive credit balance in the

general ledger, general ledger
balancing methods, general
ledger closing method
Balances are to be arrived at the month end in each head of account in general ledger. Normally every
head of account will contain both debit and credit entries. At the end of every month after completion of
all postings from all sources all the debits and credits have to be summed up. If the credit balance
exceeds the debit balance then the particular head of account is credit balance for that particular month.

Example for credit balance head of account in the general ledger.

Interest received

Payment
Voucher Cashbook
no/ Journal
Date Details Debit Credit
Journal register
voucher Folio no
No
14-04-
18 27/1 By A to Z co ---- 2000
2008
18-04-
21 28/1 By Breeze & co ---- 3000
2008
19-04- By Fredrik &
22 29/1 ---- 4000
2008 Co
30-04- By Macleen &
23 30/1 ---- 5000
2008 Co.,
 Current month
---- ---- ---- ---- 14000
total
Previous month
---- ---- ---- ----- ---
balance
Balance up to
---- ---- ---- the end of this ---- 14000
month

Whether the debit balance or credit balance in the general ledger

has to be carried over to next month?
Yes. Previous month debit or credit balance has to be carried over to next month.

Whether general ledger postings have to be made

every month?
Yes. General ledger postings have to be made from the beginning of the financial year to till the end of
the financial year. Example: 1st April to 31st March.

What is the next step after closing the general ledger at the end of
the month?
All the debit balances or the credit balances at the end of the month should be taken to trial balance as
debit or credit as the case may be.

Whether separate general ledger has to be maintained for every

month?
Not necessary. One General ledger for all head of accounts can be maintained for whole of the
financial year. However separate general ledgers can be maintained for expenditure only head of
account, for revenue only head of account and for both expenditure and revenue head of account for
every financial year. Separate general ledger has to be maintained for every year.

What is expenditure or debit balance only head of account in

general ledger?
Certain head of account should contain only debit balance. For example cost of purchases,
establishment charges, Trading expenses, Maintenance and repairs, miscellaneous expenses, Interest
and bank charges, Deposits receivable, Fixed assets, Advances, Sundry debtors.

If any credit balance is arrived in the above head of account then there must error in principles of
accounts while posting. It means some wrong posting either in the debit or credit have been made.

what is revenue or credit balance only head of account in general

ledger?
Certain head of account should contain only credit balance. For example sale account, sundry creditors
account, other receipts account, deposits repayable account.

If any debit balance is arrived in the above heads of account then there must error in principles of
accounts while posting in the ledger. The general entries should be checked up. It means some wrong
posting either in the debit or credit have been made.
what are the general ledger
postings errors, general ledger
posting mistakes, general ledger
wrong entries, how wrong ledger
postings affects trial balance
1, Wrong postings made in the head of account. Example: Instead of posting into Administrative
expenses-Rent postings may be made wrongly in Establishment charges account. Though the Trial
balancemay tally principally it is wrong and it may not reflect the true expenditure on each head of
account.

2, Wrong amounts posted: Instead of posting $1010 postings may be made wrongly for $1100. This
type of mistake is common among accountants. The Trial balancemay not agree unless the error is
located and rectified.

3, Instead of posting into the debit column of the particular head of account postings may be made
wrongly in the credit column of the particular head of account. For example: Instead of posting $1010 in
the debit column of establishment charges postings may be made wrongly in the general ledger in the
credit column of establishment charges. This is an error of accounting principle also and Trial
balancemay not tally unless the mistake is located and rectified.

4, Wrong total arrived in the head of account. Total should be done correctly in each head of account
carefully. Otherwise Trial balancemay not tally since you are taking wrong balance in the trial balance.

5, Exact debit balance or credit balance should be arrived otherwise the Trial balance may not tally.
You may take the wrong balance to Trial balance.

6, Debit balances and credit balances in every head of account should be taken to Trial balance and
arrive final Trial balance. If any balance is omitted the Trial balance may not tally.