Self-Balancing Ledger

Self-Balancing Ledger

In case of large business with voluminous transactions, having large numbers of ledgers are kept by a concern, the accountant would have to face great difficulty in tracing errors in case of difference in Trial Balance. To reduce the trouble and time involved in locating the errors and to distribute work among several persons, this system has been designed, which is maintained by adopting any one of the following two systems:

–  Self-Balancing System,

–  Sectional Balancing System.

Maintenance of Self-Balancing Ledgers

Following is an example of such Self-Balancing ledgers maintained:

  • Sales Ledger (Debtors Ledger): In the sales ledger individual debtors accounts are maintained. All credit sales, cash collections, discount, sales return, bad debts, etc. are recorded in the individual debtors account.
  • Bought Ledger (Creditors Ledger): In the bought ledger, individual creditor’s accounts are maintained.
  • General Ledger: General Ledger contains real accounts, nominal accounts and non-trading personal accounts except those relating to trade debtors and trade creditors.

If the Sales or Bought ledgers double entry is not complete, a separate trial balance cannot be taken out from ledgers. If these ledgers are maintained in such a way as to offer separate trial balances, the system would be known as “Self-balancing”. In such a case a “General Ledger Adjustment Account” is prepared in each of the subsidiary ledgers. The General Ledger would have:

  • Bought Ledger Adjustment Account (i.e.; Total Creditors Account) and
  • Sales Ledger Adjustment Account (i.e.; Total Debtors Account).

These accounts are known as Control Accounts.

Advantages of Self-Balancing Ledger

  • Easy location of Errors: Under Self-Balancing Ledger system detection of error is simpler.
  • Division of Work: As multiple ledgers are maintained, accounting work can be divided among many clerks, each clerk being in charge of a particular ledger.
  • Information Access: Details of transaction related to Debtors and Creditors can be accessed immediately.
  • Internal Control: Chances of mistakes and fraud are reduced as controls are maintained through General ledgers.
  • Fixation of Responsibility: Responsibility can be easily fixed to the concerned ledger keeper.
  • Early Preparation of Final Accounts: From trial balance drawn from General Ledger final accounts can be easily prepared.
  • Quick Finalization: The system enables preparation of accounts without personal ledgers having to be balanced individually.

Disadvantages of Self-Balancing Ledger

  • Additional Work: Some additional columns have to be maintained for entry of control accounts.
  • Not suitable for small concerns: For small concerns, maintenance of these ledgers may not produce advantages.

Accounting Procedure

Under Self-Balancing system, the 3 ledgers (i.e., Sales Ledger, Bought Ledger and General Ledger) are made self balancing by introducing the four Accounts:

  • In General Ledger:
  • Debtors Ledger Adjustment A/c,
  • Creditors Ledger Adjustment A/c.
  • In Debtors Ledger: General Ledger Adjustment A/c.
  • In Creditors Ledger: General Ledger Adjustment A/c.

Transfer between Subsidiary Ledger

Sometimes purchase may be made from a customer (whom previously goods were sold). The person’s account will appear in the Sales Ledger (as debtors) and also in the Purchase Ledger (as creditors). He will pay or be paid only the difference. To square up accounts, his balance will have to be transferred from one ledger to another (Purchase and Sales).

Transfer of this nature affects the two personal accounts and all the adjustment accounts. Suppose, A’s Account has been transferred in this manner. The following journal entries show transfer from A’s Purchase ledger to A’s Sales ledger:

To transfer his credit balance to his account in the Sales Ledger: A A/c                                                                                                   Dr. (In Purchase Ledger)     To A A/c (In Sales ledger)
To correct the two adjustment accounts in respect of creditors: Bought Ledger Adjustment A/c                                                          Dr.      (In General Ledger)     To General Ledger Adjustment A/c      (In Purchase Ledger)
To correct the two adjustment accounts in respect of customers: General Ledger Adjustment A/c                                                        Dr.     (In Sales Ledger)     To Sales Ledger Adjustment A/c     (In General Ledger)

Balances in Personal Ledgers 

Normally, Customers Accounts in Debtors Ledger will show debit balances. But, in some exceptional cases, Customer’s Accounts show credit balances, like – 

  1. If a customers has paid advance but goods have not been dispatched to him.
  2. If a customer has paid in full and then he returns some goods.

Similarly Creditors Accounts show credit balances in credit ledger. But in some exceptional cases, Creditors Accounts show debit balances. For example, if advance has been paid to a creditor but goods have not so for been received.

In the above cases, debit and credit balances will be shown separately in Adjustment Accounts.

Other Entries

Apart from sales, purchase and payments made to or received from creditors and debtors, there are some others entries related to debtors, as shown below:

  • Recovery of bad debts: For recovery of bad debts (Previously written off), following journal entry is made:
Cash A/c                                                                                Dr.
        To Bad Debts Recovered A/c    

Cash Accounts and Bad Debts Recovered Account both will appear in General Ledger. Therefore, Adjustment Accounts will not be affected.

  • Endorsement of B/R to Creditors: Following journal entry is made for this transaction:
Creditors A/c                                                                                Dr.
        To B/R A/c    

Above transaction will be debited in creditors Ledger Adjustment Account and credited in General Ledger Adjustment Account.

  • Dishonoure of Endorsed B/R : The entry will be:
Debtors A/c                                                                               Dr.
        To Creditors A/c    

Above entry will affect both personal ledgers (Debtors and Creditors Ledger) and all the four Adjustment Accounts will be affected. Following entries will be made in Adjustment Accounts:

Sales Ledger Adjustment A/c                                                                                Dr.
      To General Ledger Adjustment A/c (In Sales Ledger) 
General Ledger Adjustment A/c (In Purchase Ledger)Dr.
To Purchase Ledger Adjustment A/c 
  • B/R discounted with Bank: This will also not affect Adjustment Accounts. Both debit and credit aspects of this transaction will appear in General Ledger. Therefore, Adjustment Account will not be affected.
  • Provision for Bad and doubtful debts: This will not affect Adjustment Accounts. In case balance of sundry debtors has been given at net amount after deducting provision for bad and doubtful debts, amount of debtors should be shown at gross value in Adjustment Account.

Sub-Division of Sales Ledger and Purchase Ledger

If number of customers and creditors is large, more than one Sales Ledger and Purchase Ledger may be maintained. This sub-division of Ledger can be made on the following basis:

  • On the Basis of Alphabets: Account of customers whose names start with the alphabets A to H, from I to P, from Q to Z, in such case separate adjustment accounts for each sub-division will be maintained in the General Ledger.
  • On the Basis of Area: Instead of sub-division on the basis of name, the sub-division may be done on the basis of area. For example, if customers of business are spread over the country, a separate ledger may be maintained for each state.

Sectional Balancing System

Under this method also personal accounts of trade debtors and trade creditors are maintained in separate ledgers like Self-balancing system. In this system three ledgers are maintained:

  • General Ledger
  • Sales Ledger or Debtors Ledger.
  • Purchase Ledger or Creditors Ledger.

But under Sectional Balancing System, Trial balance is prepared only in General Ledger. Following Control Accounts are opened in General Ledger to complete double entry:

  • Total Debtors Account or Debtors Ledger Control Account.
  • Total Creditors Account or Creditors Ledger Control Account.

Distinction between Self-Balancing and Section Balancing System

 Self-BalancingSectional Balancing
Trial BalanceSeparate trial balance is prepared for each ledger.Trial balance is prepared for General Ledger only.
Control Account in ledgersControl accounts are opened in all the ledgers.Control accounts are opened in General Ledger only.
Double EntryDouble entry is completed in each ledger.Double entry is complete in General Ledger only.
Number of EntriesIt involves more accounting entries comparing to self balancing system.It involves less accounting work as compared to self balancing system.
Control AccountsControl accounts are normally called ‘Adjustment Accounts’.Control accounts are normally called ‘Total Accounts’ or Contact Accounts.

Accounting Procedure of Sectional Balancing System

  • Under sectional balancing system personal accounts of Debtors and Creditors are maintained in Sales Ledger and Purchase Ledger respectively on single entry basis. In General Ledger, double entry is completed with the help of Total Debtors and Total Creditors Accounts.
  • To prove the accuracy of the Sales Ledger would be to maintain a Total Debtors Account in the General Ledger whereas accounts of individual customers would be maintained in the Sales Ledger. In the General Ledger, the Total Debtors Account would be periodically posted by the totals of various transactions (e.g. monthly total credit sales, total amount received from credit customers, total discount allowed to them, total returns inwards, total bill receivable received etc.) The balance in the Total Debtors Account should be equal to the total of balances shown by the accounts of individual customers ensuring accuracy of the Total Debtors Account as well as individual customers’ account. Any difference indicates error somewhere.
  • In the same way, the accuracy of individual suppliers accounts may be checked by comparing the total of their balances with the balance in the Total Creditors Account.
  • The double entry would be completed in the General Ledger itself. For instance for credit sales, Total Debtors Account would be debited and Sales Account credited. For goods returned to suppliers, Total Creditors Account would be debited and Return Outward Account credited.
  • The “total accounts” (also known as adjustments or control accounts) prove the accuracy of the subsidiary (Sale or Bought) ledgers.

Rectification of Errors

For rectification of errors relating to self balancing and sectional balancing system, the following steps should be followed:

  • Under Self-Balancing System : To rectify error, normal entry of rectification should be made. At first it will be checked whether adjustment account’s error affects also, then these will also be rectified. If error affects only personal account, there will be no effect on adjustment accounts.
  • Under Sectional Balancing System : Under this system personal accounts of debtors and creditors will be corrected through single entry. Accounts related to General Ledger will be corrected through Total Debtors or Total Creditors Account.

Practical Problems

General Ledger Adjustment A/c, Debtors Ledger Adjustment A/c and Creditors Ledger Adjustment A/c)

Ex. Peers Ltd. has three ledgers in use, viz. a Debtors Ledger, a Creditors Ledger and a Nominal Ledger, which are kept on the system of self-balancing. From the following particulars, prepare the adjustment account that would appear in each of these ledgers.

2009, Jan. 1Balance of Sundry Debtors15,000
 Balance of Sundry Creditors17,000
          Jan. 31Credit Purchases6,000
 Credit Sales10,700
 Cash Sales1,500
 Paid to Creditors9,800
 Discount allowed by them400
 Cash received from debtors7,700
 Discount allowed300
 Bills payable accepted1,300
 Bills Receivable3,000
 Return Inwards870
 Return Outwards600
 Rebates allowed to debtors280
 Rebate allowed by creditors350
 Provision for Doubtful Debts320
 Bad Debts450
 Bills Receivable dishonoured475


Steps involved in solving the above problem:

  • Preparing Debtors Ledger Adjustment A/c in General Ledger.
  • Preparing Creditors Ledger Adjustment A/c in General Ledger.
  • Preparing General Ledger Adjustment A/c in Debtors Ledger.
  • Preparing General Ledger Adjustment A/c in Creditors Ledger.

Working Details:

  1.                                In General Ledger

Debtors Ledger Adjustment Account

Dr.    Cr.
2009 Jan. 1  To Balance b/d  15,0002009 Jan. 31  By Nominal Ledger Adjustment A/c:   
Jan. 31To Nominal Ledger Adjustment A/c: Sales  10,700 Bank Discount7,700 300
 Bill Receivable dishonored475 Bills Receivable3,000
    Return Inwards870
    Bad Debts450
   Jan. 31By Balance c/d13,575
  26,175  26,175
  •                                            Creditors Ledger Adjustment Account     
Dr.    Cr.
2009 Jan.31  To Nominal Ledger Adjustment A/c:   2009 Jan. 1  By Balance b/d  17,000
 Bank Discount9,800 400Jan.31By Nominal Ledger Adjustment A/c: Purchases  6,000
 Bills payable1,300   
 Return Outwards600   
Jan.31To Balance c/d10,550   
  23,000  23,000
  • In Debtors Ledger

General Ledger Adjustment Account

Dr.    Cr.
2009 Jan. 31  To Debtors’ Ledger Adjustment A/c: Bank    7,7002009 Jan. 1 Jan.31  By Balance b/d By Debtors Ledger Adjustment A/c:  15,000
 Discount300      Sales10,700
 Bills Receivable3,000 Bills Receivable Dishonoured475
 Return Inwards870   
 Bad Debts450   
Jan.31  To Balance c/d13,575   
  26,175  26,175
  • In Creditors Ledger

General Ledger Adjustment Account

Dr.    Cr. 
2009 Jan. 1  To Balance b/d  17,0002009 Jan.31  By Creditors Ledger Adjustment A/c:   
Jan.31By Creditors’ Ledger Adjustment A/c: Purchases  6,000 Bank Discount9,800 400
    Bills payable1,300
    Return Outwards600
   Jan.31By Balance c/d10,550
  23,000  23,000

Note: Cash Sales and Provision for Doubtful Debts do not affect Debtors ledger. Therefore they are not entered in Self-Balancing Ledger System.

Transfer between Subsidiary Ledger)

Ex. Prepare the General Ledger Adjustment Accounts as will appear in the Debtors’ and Creditors’ Ledger, from the information given below:

Balances on 1.4.98Dr. (Rs.)Cr. (Rs.)
Debtor’s Ledger47,200240
Creditor’s Ledger28026,300
Transactions for the year ended 31.3.99 Rs.
Total Sales 1,20,100
Cash Sales 8,100
Total Purchases 89,500
Creditors Purchases 67,000
Creditors paid off (in full Settlement of Rs.40,000) 39,500
Received from Debtors (in full Settlement of Rs.59,000) 58,200
Returns from Debtors 2,600
Returns to Creditors 1,800
Bills Accepted for Creditors 5,500
Bills Payable Matured 8,000
Bills Accepted by Customers 20,100
Bills Receivable Dishonoured 1,500
Bills Receivable Discounted 5,000
Bills Receivable endorsed to Creditors 4,000
Endorsed Bills Dishonoured 1,000
Bad-debts Written off (after Deducting Bad-debts Recovered Rs.300) 2,200
Provision for Doubtful Debts 550
Transfer from Debtors’  Ledger to Creditors’ Ledger 1,100
Transfer from Creditors’ Ledger to Debtors’ Ledger 1,900
Balance on 31.3.99  
Debtors’ Ledger (Cr.) Rs.380
Creditors’ Ledger (Dr.) Rs.420


Steps involved in solving the above problem:

  • Preparing General Ledger Adjustment A/c in Debtors Ledger.
  • Preparing General Ledger Adjustment A/c in Creditors Ledger.
  1.                                                       In Debtors Ledger
Dr.General Ledger Adjustment Account                                                          Cr.
DateParticulars Rs.DateParticulars Rs.
1.4.98To Balance b/d 2401.4.98By Balance b/d 47,200
31.3.99To Debtors Ledger Adj.      A/c:  31.3.99By Debtors Ledger Adj.       A/c:  
      Bank58,200        Sales on Credit       (1,20,100 – 8,100)1,12,000 
     Discount      (59,000 – 58,200)  800
      Returns2,600        B/R dishonored1,500 
      Bills Receivable20,100        Endorsed Bills1,000 1,14,500
      Bad Debts written- off (2,200 + 300)2,500  84,200 31.3.99 By Balance c/d 380
      Transfer from Debtors Ledger to Creditors Ledger   1,100    
      Transfer from Creditors Ledger to Debtors Ledger    1,900    
31.3.99To Balance c/d (Bal.      fig.)   74,640    
   1,62,080   1,62,080
  •                                           In Creditors Ledger
Dr.                General Ledger Adjustment AccountCr.
DateParticulars Rs.DateParticulars Rs.
1.4.98To Balance b/d 26,3001.4.98By Balance b/d 280
 To Creditors Ledger Adj.       A/c:   By Creditors Ledger Adj. A/c: Bank  39,500 
 Purchases67,000  Discount Received (40,000 – 39,500)  500 
 Endorsed B/R dishonoured  1,000  68,000       Returns       Bills Payable1,800 5,500 
31.3.99To Balance c/d 420 Bills Receivable endorsed4,00051,300
     Transfer from Debtors  Ledger to Creditors Ledger   1,100
           Transfer from Creditors       Ledger to Debtors Ledger   1,900
    31.3.99By Balance c/d (Bal. Fig.) 40,140
   94,720   94,720

Computation of Credit Sales and Debtors Ledger Adjustment A/c

Ex. From the following information available from the books of a Trader from 1-1-2000 to 31-3-2000, you are required to draw up the Debtors Ledger Adjustment Account in the General Ledger:

  • Total sales amounted to Rs.1,80,000 including the sale of old Xerox Machine for Rs.4,800 (Book value Rs.8,000). The total Cash sales were 80% less than the total Credit sales.
  • Cash collections from debtors amounted to 70% of the aggregate of the opening debtors and credit sales for the period. Debtors were allowed a cash discount of Rs.20,000.
  • Bills Receivable drawn during the three months totalled Rs.30,000 of which bills amounting to Rs.10,000 were endorsed in favour of suppliers. Out of the endorsed Bills, one bill for Rs.6,000 was dishonoured for non-payment as the party became insolvent, his estate realized nothing.
  • Cheques received from customers Rs.8,000 were dishonoured, a sum of Rs.2,000 was irrecoverable. Bad debts written off in the earlier years realized Rs.11,000.
  • Sundry debtors as on 1-1-2000 stood of Rs.50,000.                         


Steps involved in solving the above problem:

  • Computation of Credit Sale.
  • Preparing Debtors Ledger Adjustment A/c in General Ledger.

Working Details:

  1. Computation of Credit Sales

Let, total credit sales = Rs.100.

Then, total cash sales = Rs.[100 – (100 x 80%)] = Rs.20.

Therefore, total sales = Rs.(100 + 20) = Rs.120.

Proportion of credit sales to total sales = 100/120.

So, amount of credit sales = Rs.(1,80,000 – 4,800) x 100/120 = Rs.1,46,000.

  •                                        General Ledger

Debtors Ledger Adjustment Account

Dr.    Cr.
2000 Jan. 1 Mar. 31  To Balance b/d To General Ledger Adj. A/c:      Sales (Note-1)      Creditors-B/R dishonoured      Bank cheques dishonoured  50,000   1,46,000 6,000 8,0002000 Mar. 31  By General Ledger Adj. A/c:       Collection-Cash and       Bank       [(50,000 + 1,46,000) x 70%]       Discount       Bills Receivable       Bad Debts (6,000 + 2,000)        1,37,200 20,000 30,000 8,000
   Mar. 31By Balance c/d14,800
  2,10,000  2,10,000

Treatment of excess balance remained in Trial Balance

Ex. Prepare the Sales Ledger Control Account and the Bought Ledger Control Account from the following particulars-

ParticularsDebtors LedgerCreditors Ledger
Debit Balances at the beginning of the year1,54,900800
Credit Balances at the beginning of the year2001,25,800
Credit Sales and Purchases4,83,0002,86,900
Cash received and paid3,03,0001,84,000
Cash paid to Debtors1,200
B/R received and B/P accepted43,00034,000
Discount Allowed and Received7,0006,000
Transfer from Bought to Sold Ledger8,4008,400
Bad Debts1,200
Provision for Bad Debts3,400
B/P Dishonoured (Cancelled)2,100
Debit balances at the end of the year2,64,200400
Credit Balances at the end of the year6001,76,350

There is excess of debit of Rs.450 in the Trial Balance of General Ledger. Give your comments regarding the difference.


Steps involved in solving the above problem:

  • Preparing Sales Ledger Adjustment Account in General Ledger.
  • Preparing Bought Ledger Adjustment Account.

                                                           In General Ledger

  1. Dr.                                    Sales Ledger Adjustment Account                                               Cr.
To Balance b/d1,54,900By Balance b/d200
To General Ledger Adjustment A/c: By General Ledger Adjustment A/c: 
Credit Sales4,83,000Cash received from Debtors3,03,000
Cash paid to Debtors1,200B/R received43,000
To Balance c/d600Discount Allowed7,000
  Return Inward12,500
  Bad Debts written off1,200
  By Bought Ledger Control A/c      (Transfer)  8,400
  By Balance c/d (Balancing Figure)2,64,400
 6,39,700 6,39,700

As given in Question, Closing balance Dr. = 2,64,200, but on balancing the Account, it is Rs.2,64,400 Dr. Hence, an excess Debit of Rs.200.

  • Dr.                                    Bought Ledger Adjustment Account                                            Cr.
To Balance b/d800By Balance b/d1,25,800
To General Ledger Adjustment A/c By General Ledger Adjustment A/c      (Purchase Ledger)   
Cash paid to Creditors1,84,000Purchases2,86,900
B/P accepted34,000B/P dishonoured2,100
Discount received6,000  
Returns Outward5,900  
Sales Ledger Adjustment A/c (Transfer)  8,400  
To Balance c/d (Balance Figure)1,76,100By Balance c/d (given)400
 4,15,200 4,15,200

As given in Question, Closing balance Cr. = 1,76,350, but as per above Account, it is Rs.1,76,100 Dr. Hence, an excess Debit of Rs.250.

Note: In the General Ledger there is an excess debit balance of Rs.200 in the Sales Ledger Adjustment Account” and lesser credit balance amounting to Rs.250 in the “Bought Ledger Adjustment Account” causing excess debit of Rs.450 in the Trial Balance of “ General Ledger”. Such errors could be due to error in posting to Control Accounts maintained in the General Ledger.

Sectional Balancing System

Ex. From the following information make journal entries and ledger accounts under Sectional Balancing System:

DebtorsCredit Sales Rs.Cash received Rs.Discount allowed Rs.B/R drawn Rs.


Steps involved in solving the above problem:

  • Passing Journal Entries.
  • Preparing Total Debtors Account.
  • Preparing Sales Account.
  • Preparing Cash Account.
  • Preparing Discount Allowed Account.
  • Preparing Bills Receivable Account.
  • Preparing Trial Balance in General Ledger.
  • Preparing P’s Account.
  • Preparing Q’s Account.
  • Preparing R’s Account.
  • Preparing S’s Account.
  • Making total balance of Sundry Debtors.

In General Ledger

  1.        Journal Entries
Particulars Dr. (Rs.)Cr. (Rs.)
Total Debtors Account                                               To Sales Account (With total credit sales at the end of period)Dr.    44,000  44,000
Cash A/c                                                                    To Total Debtors A/c (with total cash received at the end of period)             Dr.    31,200  31,200
Discount A/c      To Total Debtors A/c (With total discount allowed at the end of period)Dr.    1,400  1,400
Bills Receivable A/c     To total Debtors Account (With total B/R drawn at the end of the period)  Dr.    3,500  3,500
  • Total Debtors Account
Dr.  Cr.
To Sales A/c44,000By Cash A/c31,200
  By Discount A/c1,400
  By B/R A/c3,500
  By Balance c/d7,900
 44,000 44,000
  • Sales  Account
Dr.  Cr.
To Balance c/d44,000By Total Debtors c/d44,000
  • Cash  Account
Dr.  Cr.
To Debtors c/d31,200By Balance c/d31,200
  • Discount Allowed  Account
Dr.  Cr.
To Total Debtors A/c1,400By Balance c/d1,400
  • Bills Receivable  Account
Dr.  Cr.
To Total Debtors A/c3,500By Balance c/d3,500
  •                                Trial Balance in General Ledger
 Dr. (Rs.)Cr. (Rs.)
Total Debtors Account7,900 
Sales Account 44,000
Cash Account31,200 
Discount allowed Account1,400 
Bills receivable Account3,500 

In Sales Ledger

  • P’s Account
Dr.  Cr.
To Sales A/c14,000By Cash A/c6,000
  By Discount A/c400
  By B/R A/c2,000
  By Balance c/d5,600
 14,000 14,000
  • Q’s Account
Dr.  Cr.
To Sales A/c13,000By Cash A/c10,000
  By Discount A/c500
  By B/R A/c1,500
  By Balance c/d1,000
 13,000 13,000
  1. R’s Account
Dr.  Cr.
To Sales A/c8,000By Cash A/c6,500
  By Discount A/c200
  By Balance c/d1,300
 8,000 8,000
  1. S’s Account
Dr.  Cr.
To Sales A/c9,000By Cash A/c8,700
  By Discount A/c300
 9,000 9,000
  1.  Balance of Sundry Debtors
P Q R5,600 1,000 1,300

Rectification of Errors)

Ex. Pass necessary journal entries to rectify the following errors:

  • Under self balancing system and
  • Under sectional balancing system :
    • Goods purchased from Mr. Roy for Rs.1,000/- entered in purchase book as Rs.1,400.
    • Goods purchased from Mr. Gupta for Rs.430 entered correctly in purchase book but posted to Mr. Gupta’s A/c as Rs.340.
    • Goods purchased from Mr. Dutt for Rs.830 entered in sales book.
    • A sale of Rs.530 to Mr. Batra entered correctly in sales book but posted to Mr. Dey’s A/c as Rs.350.
    • Bad debts aggregating Rs.560 were written off in sales ledger, but were not adjusted in General Ledger.
    • The total of discount received column in the cash book for the month of July, amounting to Rs.910 was not posted.
    • A cheque of Rs.3,000 received from Mr. Mukherjee posted to the account of Mr. Reddy.
    • Total of sales book overcast by Rs.130.
    • Sales Returns of Rs.510 by Mr. Mohanty entered in purchased as Rs.5,100.
    • Sales of Machinery (assets) amounting to Rs.2,500 to Mr. Agarwal entered in sales book.


  1. Under Self-Balancing System

                                      Journal Entries

Particulars Rs.Rs.
Mr. Roy A/c                                                                 To Purchases A/cDr.400  400
Bought Ledger adjustment A/c                                     To General Ledger adjustment A/cDr.400  400
Suspense A/c                                                                To Mr. Gupta    Dr.90  90
Purchase A/c                                                                 To Mr. Dutt (in B.L.) Dr.830  830
Sales A/c                                                                      To Mr. Dutt (in S.L.)Dr.830  830
General Ledger Adjustment A/c (in B.L.)                      To Bought Ledger Adjustment A/cDr.830  830
General Ledger Adjustment A/c (in S.L.)                      To Sales Ledger Adjustment A/cDr.830  830
Mr. Batra                                                                      To Mr. Dey     To SuspenseDr.530  350 180
Bad debts A/c                                                               To SuspenseDr.560  560
General Ledger Adjustment A/c                                   To Sales Ledger Adjustment A/c   Dr.560  560
Suspense A/c                                                               To Discount received A/cDr.910  910
Bought Ledger Adjustment A/c                                     To General Ledger Adjustment A/cDr.910  910
Mr. Reddy                                                                    To Mr. MukherjeeDr.3,000  3,000
Sales A/c                                                                      To Suspense A/cDr.130  130
General Ledger Adjustment A/c                                   To Sales Ledger Adjustment A/cDr.130  130
Mr. Mohanty (in B.L.)                                                    To Purchase A/cDr.5,100  5,100
Sales Returns A/c                                                        To Mr. Mohanty (in S.L.)Dr.510  510
Bought Ledger Adjustment A/c                                   To General Ledger Adjustment A/c (in B.L.)  Dr.5,100  5,100
General Ledger Adjustment A/c (in S.L.)                     To Sales Ledger Adjustment A/c  Dr.510  510
Sales A/c                                                                      To Mr. Agarwal (in S.L.)Dr.2,500  2,500
Mr. Agarwal (in G.L.)                                                   To Machinery A/cDr.2,500  2,500
General Ledger Adjustment A/c                                  To Sales Ledger Adjustment A/cDr.2,500  2,500
  • Under Sectional Balancing System

                                      Journal Entries

Particulars Rs.Rs.
Total Creditors A/c                                                        To Purchase A/cDr.400  400
Mr. Roy’s A/c will be debited by Rs.400 (in B.L.)   
Mr. Gupta’s A/c will be credited by Rs.90 (in B.L.)   
Purchase A/c                                                                  To Total Creditors A/c   Dr.830  830
Sales A/c                                                                       To Total Debtors A/c 830  830
Mr. Dutt’s (in B.L.) will be credited by Rs.830.   
Mr. Batra’s (in B.L.) will be credited by Rs.530 Mr. Dey’s A/c (in S.L.) will be debited by Rs.350   
Bad Debts A/c                                                               To Total Creditors A/cDr.560  560
Total Creditors A/c                                                        To Discount received A/cDr.910  910
Mr. Reddy                                                                      To Mr. MukherjeeDr.3,000  3,000
Sales A/c                                                                       To Total Debtors A/c      Dr.130  130
Total Creditors A/c                                                        To Purchase A/cDr.5,100  5,100
Sales Returns A/c                                                         To Total Debtors A/cDr.510  510
Mr. Mohanty’s A/c (in B.L.) will be debited by Rs.5,100 Mr. Mohanty’s A/c (in S.L.) will be Credited by Rs.510   
Sales A/c                                                                        To Total Debtors A/c                                                               Dr.2,500  2,500
Mr. Agarwal’s A/c (in S.L.) will be Credited by Rs.2,500   
Mr. Agarwal (in G.L.)                                                      To Machinery A/c  Dr.2,500  2,500

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