Ledger and T-Accounts
✏️ In one line
A ledger collects all the entries of one account in one place, so you can see its balance.
📖 Story time
Meera, runs Meera's Kirana, a busy little shop
- Meera's journal lists transactions by date. But how much cash does she have right now?
- She opens a Cash account in her ledger, drawn like a big T. Money in goes on the left (Dr). Money out goes on the right (Cr).
- Moving entries from the journal to the ledger is called posting.
- The gap between the two sides is the balance. To close the account, she writes it on the smaller side as 'Balance c/d' so both sides match.
🎯 Your turn
Balance Meera's Cash account! Find the 'Balance c/d' that makes both sides equal.
Nice! Dr side = ₹25,000, Cr side = ₹15,000, so the balance c/d is ₹10,000. Meera has ₹10,000 cash in hand.
Not quite. Hint: Add up each side. The balance is the difference.
An account's debit side total is bigger than its credit side. It has a…
Nice! Right! The bigger side names the balance. Cash and other assets usually have debit balances.
Not quite. Hint: The bigger side wins.
Posting means moving entries from the journal into the ledger.
Nice! True. Journal first, then posting to the ledger.
Not quite. Hint: Read Meera's story again.
Meera: In Ravi's account (Ravi supplies goods to Meera on credit), the credit side is bigger.
What does this mean?
Nice! Yes. A credit balance in a supplier's account means he is a creditor: Meera owes him.
Not quite. Hint: Credit balance → creditor.