INCOME TAX NOTES

CA IPCC Self Balancing Ledger

CA IPCC Self Balancing Ledger 


Self Balancing ledger is prepared by 
Big Company having voluminous transaction.
to reduce to minimum the trouble
and
time involved in location the error
Self balancing ledger or 
multiple balancing ledger is prepared


Ledger :

Name of ledgers:

1. General Ledger (Sidha Account )
   In General Ledger  
(Sales / Debtor Leger adjustment / Control Account)

2. Debtor Ledger ( Ulta Account)
     In debtor Ledger  
General ledger Adjustment Account Control

3. Creditor Ledger ( Ulta Account)
      In Creditor Ledger 
 General ledger Adjustment Account Control



Transaction
Usual Entry
Self-Balancing Entry
1
For Credit Sales
Individual Customer A/c Dr.
(in Debtors Ledger)
To, Sales A/c
(in General Ledger)
Debtors Ledger Adjustment A/c Dr.
(in General Ledger)
To, General Ledger Adjustment A/c (in Debtors Ledger)

2

For Cash / Cheque received from customers
Cash A/c Dr.
(in General Ledger)
To, Individual Customer A/c
(in Debtors Ledger)
General Ledger Adjustment A/c Dr. (in Debtors Ledger)
To, Debtors Ledger Adjustment A/c (in General Ledger)

3
For
Discount Allowed or allowance to customers
Discount Allowed A/c Or, Allowances A/c Dr.
(in General Ledger)
To, Individual Customer A/c
(in Debtors Ledger)
Do
4
For Bad Debts
Bad Debts A/c Dr.
(in General Ledger)
To, Individual Customer A/c
 (in Debtors Ledger)
Do
5
For Bills Receivable received from customers
Bills Receivable A/c Dr.
(in General Ledger)
To, Individual Customer A/c
(in Debtors Ledger)
Do


In the General Ledger

Debtors Ledger Adjustment Account

Date
Particulars
Amount
Date
Particulars
Amount
Op. Dt
To, Balance b/d

Op. Dt
By, Balance b/d (if any) “ General Ledger Adjustment A/c:


General Ledger Adjustment A/c “Credit Sales


“ Cash/ Cheque received “ Bad Debts


“ Carriage and Sundry Charges Debited to customer-


“ Return Inward


“ Bills Receivable Dishonoured


“ Discount Allowed “ Other Allowances “ Bills Receivable


“ Cheque received and dishonoured “ Interest and Charges etc.


“ Transfer to or from other Ledgers


“ Refund- Cash paid to customers

Cl. Dt
“ Balance c/d


“ B/R discounted and dishonoured





“ B/R endorsed and dishonoured “ Interest charged to overdue account




Cl. Dt
“ Balance c/d (if any)





 TOTAL
 XX

  TOTAL
 XX

In the Debtors Ledger

General Ledger Adjustment Account


Date
Particulars
Amount
Date
Particulars
Amount
Op. Dt
By, Balance b/d (if any) “ General Ledger Adjustment A/c:

Op. Dt
To, Balance b/d


“ Cash/ Cheque received “ Bad Debts


General Ledger Adjustment A/c “Credit Sales


“ Return Inward


“ Carriage and Sundry Charges Debited to customer-


“ Discount Allowed “ Other Allowances “ Bills Receivable


“ Bills Receivable Dishonoured


“ Transfer to or from other Ledgers


“ Cheque received and dishonoured “ Interest and Charges etc.

Cl. Dt
“ Balance c/d


“ Refund- Cash paid to customers





“ B/R discounted and dishonoured





“ B/R endorsed and dishonoured “ Interest charged to overdue account




Cl. Dt
“ Balance c/d (if any)










Contra Transaction

Sometimes it may happen that debtors ledger shows a credit balance and creditor ledger shows a debit balance i.e., the adverse balance of debtors ledger and creditors ledger. Usually, credit, balance in debtor‟s ledger may happen on account of advance taken from creditors or allowances given to customers for different products after closing the accounts. Similarly, debit balance in creditors ledger may appear on account of excess payment made or goods returned to creditors after closing the accounts etc. Thus, these contra transactions are to be adjusted. But, student must remember that credit balance in one ledger must not be set off against debit balance of another ledger. These should be treated separately.