SECTIONAL BALANCING

&
SELF-BALANCING SYSTEMS
1. What are the different type !f "ed#er$
The following are the different types of ledgers:
a) Debtors Ledger: It contains personal accounts of trade debtors to whom goods
are sold on credit. This ledger is also called sales ledger or sold ledger.
b) Creditors Ledger: It contains the personal accounts of trade creditors from
whom goods are purchased on credit. This ledger is also called purchase
ledger or bought ledger.
c) General Ledger: It contains all real and nominal accounts and remaining
personal accounts like capital drawings loan bank o!erdraft etc. This ledger
is also called nominal ledger.
%. What are the a&&!'nt prepared 'nder e&ti!na" (a"an&in# yte)$
"nder sectional balancing system two counts are maintained in the General ledger.
They are:
a) Total Debtors #ccount or $ales ledger Control #ccount
b) Total Creditors #ccount or %urchase ledger Control #ccount
&. 'hat are the accounts prepared under self(balancing system)
"nder self(balancing systems following account are prepared:
a) In General Ledger $ales Ledger #d*ustment #ccount is prepared and in $ales
Ledger General Ledger #d*ustment #ccount is prepared
b) In General Ledger %urchase Ledger #d*ustment #ccount is prepared and in
%urchase Ledger General Ledger #ccount is prepared.
+. Gi!e specimen of Total Debtors #ccount.
In the General Ledger
Total Debtors #ccount or $ales Ledger Control #ccount
%articulars ,s. %articulars ,s
To -alance b.d
/0pening debit balance)
To Credit sales
To -., dishonoured
To -., renewed
To Cash refunded to
Customers
To $undry charges
/Interest charged and
noting charges)
To -alance c.d
/Closing credit balance)
-y -alance b.d
/0pening credit balance)
-y Cash recei!ed
-y -., recei!ed
-y Discount allowed
-y #llowances gi!en
-y $ales returns
-y -ad debts written off
-y Transfer /$et off)
-y -alance c.d
/Closing debit balance)
!isit us 1 www.geocities.com.rkbusinessclass. +2
3. Gi!e specimen of Total Creditors #ccount.
In the General Ledger
Total Creditors #ccount or %urchase Ledger Control #ccount
%articulars ,s. %articulars ,s.
To -alance b.d
/0pening debit balance)
To -.% issued
To -., recei!ed endorsed
To Discount recei!ed
To #llowances recei!ed
To %urchase returns
T0 Transfer /$et off)
To -alance c.d
/Closing credit balance)
-y -alance b.d
/0pening credit balance)
-y Credit purchases
-y -.% dishonoured
-y ,efund from creditors
-y #llowances gi!en
-y Interest and e4penses
%ayable to creditors.
-y -alance c.d
/Closing debit balance)
5. 6ame any fi!e transactions which are not recorded total Debtors #ccount and Total
Creditors #ccount.
a) Cash sales
b) Cash purchases
c) %ro!ision for bad and doubtful debts
d) %ro!ision for discount on debtors and creditors
e) -ad debts pre!iously written off now reco!ered.
f) -ills recei!able discounted.
g) Trade discount.
h) -ills payable met during the year
i) Cash recei!ed from bills recei!able on due dates.
7. 'hat are the ad!antages of self(balancing and sectional balancing ledgers)
Important ad!antages are gi!en below:
a) 8rrors are detected 9uickly
b) If errors creep into any particular ledger only that ledger is checked up. This
sa!es time and energy.
c) It ser!es as a basis of internal check system.
d) The figures of total debtors and total creditors are readily a!ailable.
e) It helps to prepare final account 9uickly.
:. 'hat are the differences between self(balancing and sectional balancing systems)
$elf -alancing $ystem $ectional -alancing $ystem
;
<
&
"nder this system double entry
system is completely applied
#d*ustments accounts are
prepared in each ledger
separately
$eparate trial balance an be
prepared at the end of each
Double entry system is not applied
0nly control accounts are prepared
in general ledger
Trial balance may be prepared only
in the general ledger
!isit us 1 www.geocities.com.rkbusinessclass. 3=
ledger
2. Gi!e specimen of Debtors Ledger #d*ustment #ccount.
In the General Ledger #ccount
$ales Ledger #d*ustment #ccount
%articulars ,s. %articulars ,s
To -alance b.d
/0pening debit balance)
To General Ledger
#d*ustment #ccount
Credit sales
-., dishonoured
-., renewed
Cash refunded to
Customers
$undry charges
/Interest charged and
noting charges)
To -alance c.d
/Closing credit balance)
-y -alance b.d
/0pening credit balance)
-y General Ledger
#d*ustment #ccount
Cash recei!ed
-., recei!ed
Discount allowed
#llowances gi!en
$ales returns
-ad debts written off
Transfer /$et off)
To -alance c.d
/Closing debit balance)
;=. Gi!e specimen of %urchase Ledger #d*ustment #ccount
In the General Ledger
%urchase Ledger #d*ustment #ccount
%articulars ,s. %articulars ,s.
To -alance b.d
/0pening debit balance)
To General Ledger
#d*ustment #ccount
-.% issued
-., recei!ed endorsed
Discount recei!ed
#llowances recei!ed
%urchase returns
Transfer /$et off)
To -alance c.d
/Closing credit balance)
-y -alance b.d
/0pening credit balance)
-y General Ledger #d*ustment
#ccount
Credit purchases
-.% dishonoured
,efund from creditors
#llowances gi!en
Interest and e4penses
%ayable to creditors.
-y -alance c.d
/Closing debit balance)
!isit us 1 www.geocities.com.rkbusinessclass. 3;
;;. >ow do you record the following)
Transactions Debtors Ledger Creditors ledger
Debit Credit Debit Credit
0pening debit balance (debtors ledger
0pening debit balance (creditors ledger
0pening credit balance (debtors ledger
0pening credit balance (creditors ledger
Closing credit balance( debtors ledger
Closing credit balance( creditors ledger
Closing debit balance( debtors ledger
Closing debit balance( creditors ledger
Credit sales
-., dishonoured
-., renewed
Cash refunded to customers
$undry charges ? interest etc. customers
Cash recei!ed from customers
-., recei!ed
Discount allowed
#llowances gi!en
$ales returns
-ad debts written off
Transfer /$et off)
-.% issued
-., recei!ed endorsed
Discount recei!ed
#llowances recei!ed
%urchase returns
Credit purchases
-.% dishonoured
,efund from creditors
!isit us 1 www.geocities.com.rkbusinessclass. 3<
#llowances gi!en
Interest and e4penses payable to crs.
8ndorsed bill dishonoured
Cash sales
Cash purchases
%ro!ision for bad and doubtful debts
%ro!ision for discount on debtors and
creditors
-ad debts pre!iously written off now
reco!ered.
-ills recei!able discounted.
Trade discount.
-ills payable met during the year
Cash recei!ed from bills recei!able on
due dates.
@@@@@@@@@@
!isit us 1 www.geocities.com.rkbusinessclass. 3&
!isit us 1 www.geocities.com.rkbusinessclass. 3+