GL Lesson No 1<\/p>\n
Dear Young bankers friends
I have been requested by several f b friends to write few lessons on General Ledger,General Ledger Balance Sheet(Trial Balance),Daily Supplementary Books(Daily book),Different types of accounts maintained and accounting entries.<\/p>\n
Let us study the Principles of Accounts
1) A person and his business are two separate entities ( though not as per legal angle).
2) As per Double entries Book keeping for every Debit entry there will be corresponding equal Credit entry and vice-a- versa. (Thus by entering any financial transaction two accounts will be affected).
3)All accounts can be divided in Three Major categories
(a) Personal accounts
(b) Real Accounts
(c) Nominal accounts*
(*These are different from Nominal accounts in our Banking parlance).
The rules applicable are different for these 3 different types of accounts.
(a)Personal Accounts – These are accounts of persons.In our banks they are SB\/Current,Accounts\/FD \/Loan \/OD\/CC\/TL\/DL\/Agri etc. accounts of persons\/Proprietor\/Partnerdhip\/Ltd Companies\/Clubs\/Govt Deptts.\/Semi Govt ….. etc.
The governing principal for such Personal Accounts is …………(1)
Debit the Receiver
Credit the Giver<\/p>\n
(b) Real Accounts- These are accounts of all real things which can be perceived, felt, touched, experienced seen etc.
Cash,Furniture fixture,Plant and mach.,Computers etc…..
The principal involved in Real accounts is……………. ( 2)
Debit what Comes in
Credit what goes out.<\/p>\n
(c) Nominal Accounts
They are income and expenses accounts such as Interest on Term loans,Exchange earned, Commission earned etc and Interest paid on SB deposits. expenses on Tours and Travel,Postage paid etc.
The Accounting principal involved is ………………….(3)
Debit All Expenses and Losses
Credit All Incomes and Profit.<\/p>\n
For recording these tractions Books of Accounts are maintained and the entries \/ accounts are recorded in them.
The usual books through which the entries are passed when transaction takes place are
Cash Books\/ Day Books\/General Ledger\/General Ledger (Day Book)<\/p>\n
Some Examples
In respect of all Savings accounts a ledger Containing all individual Personal Accounts of SB account holders is maintained.
An aggregate of all SB deposits is maintained in General Ledger named as Savings Deposit which is an aggregate called as SAVINGS Account Holder’s.
GLBB or Trial Balance is the net balance of each head like SB deposits,Fixed Deposits ……..Cash on hand,Term Loan ……… it is in fact the Balance Sheet of the branch on that day.
Thus movement of an entry is from
Cash Book>Individul account>GL>GLBB.
Remember under double entry book keeping rules for every Credit there will be equal amount of Debit and vice a versa as there Wii be two sides in any Balance Sheet
Liabilities Showing Credit balances.
Assets Showing Debit Balances.
All Deposit accounts always show a Credit Balance ie Liability ie amount which is playable.
All Advancer’s- Loans\/CC\/OD etc shows a debit balance is Assets ie amount to be received.
Ex.1
Mr P deposits Cash of Rs 500 in his Savings Account.
The accounts affected are
(i) P’s Savings accoont, it is a personal account and hence as per principal (1) P is a giver and hence his ac is Credited.
(ii)The Cash account, being a Real Account apply rule no 2 ie Debit Cash as cash had come in.
Combined entry in Cash Book will be
Dr. Cash Account. Rs500\/-
Cr P’s SB account.Rs.500\/-
GL accounts will reflect the Mirror entry and Net account will go up.
GL SB Deposit Account Cr.Rs.500
GL Cash Account Dr. Rs.500
In GLBB or Balance Sheet of the day
these will appear ad Liabilities and Assets
GLBB as at…………..
Liabilities | Assets
Rs | Rs
SB Deposit. 500 | Cash Ac. 500
—————————– ————————–
Total. 500| Total. 500
———————————————————
Thus various entries are made.<\/p>\n
I pen off with this.<\/p>\n
Waman Gokhale
,7350901500<\/p>\n
<\/p>\n","protected":false},"excerpt":{"rendered":"
GL Lesson No 1 Dear Young bankers friendsI have been requested by several f b friends to write few lessons on General Ledger,General Ledger Balance Sheet(Trial Balance),Daily Supplementary Books(Daily book),Different types of accounts maintained and accounting entries. Let us study the Principles of Accounts1) A person and his business are two separate entities ( though…<\/p>\n","protected":false},"author":1,"featured_media":0,"parent":1165,"menu_order":0,"comment_status":"open","ping_status":"closed","template":"","meta":{"footnotes":""},"class_list":["post-1351","page","type-page","status-publish","hentry"],"_links":{"self":[{"href":"https:\/\/yourcareerheights.com\/index.php?rest_route=\/wp\/v2\/pages\/1351","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/yourcareerheights.com\/index.php?rest_route=\/wp\/v2\/pages"}],"about":[{"href":"https:\/\/yourcareerheights.com\/index.php?rest_route=\/wp\/v2\/types\/page"}],"author":[{"embeddable":true,"href":"https:\/\/yourcareerheights.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/yourcareerheights.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=1351"}],"version-history":[{"count":2,"href":"https:\/\/yourcareerheights.com\/index.php?rest_route=\/wp\/v2\/pages\/1351\/revisions"}],"predecessor-version":[{"id":1402,"href":"https:\/\/yourcareerheights.com\/index.php?rest_route=\/wp\/v2\/pages\/1351\/revisions\/1402"}],"up":[{"embeddable":true,"href":"https:\/\/yourcareerheights.com\/index.php?rest_route=\/wp\/v2\/pages\/1165"}],"wp:attachment":[{"href":"https:\/\/yourcareerheights.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1351"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}