Ledger | Meaning, Format, Example and Balancing of Accounts (original) (raw)

Last Updated : 20 Apr, 2026

A Ledger is a principal book of accounts in which all transactions recorded in the Journal or Subsidiary Books are posted to their respective accounts. It contains separate accounts for assets, liabilities, capital, income, and expenses, and helps in preparing the Trial Balance and final accounts. A ledger is formed after the journal and is the secondary step of bookkeeping.

Format of Ledger

Ledger is a T-format account where the debit is depicted on the left side, and the credit is depicted on the right side. The columns include date, particulars, journal folio (JF), and amount.

**Debit: The debit side of an account represents when the debit increases.

**Credit: The credit side of an account represents when the credit increases.

**Date: The date on which the transaction takes place.

**Particulars: The contra entry of the concerned account according to the double entry system is shown under this head.

**Journal Folio: The reference number of the journal entry from the journal.

**Amount: It is the amount debited or credited to a particular amount during the transaction.

Example of Ledger Accounts

Let us assume ABC Ltd. records the following transactions for the year ending on March 31, 2023:

1. Plant purchased for Rs. 34,000/- through cheque on April 1, 2022.

2. Good sold for cash amounted Rs. 3,900/- on August 18, 2022.

3. Goods sold to MNP Ltd. on credit for Rs. 7,200/- on January 20, 2023.

4. Depreciation charged on Plant Rs. 3,400/- on March 31, 2023.

**Solution:

Journal entries in the Books of ABC Ltd. for the year ending March 31, 2023:

Balancing of Accounts

1. The debit and credit columns of every ledger account are compared when all the journal entries are posted in the ledger accounts. The difference between the total of debit and credit side is ascertained. The difference is to be placed in the amount column of the side having a lesser total.

2. **'*Balance c/d***’ is to be entered in the particulars column against the difference, and in the date column, the last day of the accounting period is entered. Now both the debit and credit columns are to be totalled, and the totals will be equal. The totals of both sides are to be recorded in the same line horizontally. The difference has to be brought down to the opposite side below the total. 'Balance b/d’, is to be entered in the particulars column against the difference brought down, and in the date column, the first day of the next accounting period is entered.

3. If the total on the debit side of an account is higher, the balancing figure is the debit balance, and if the credit side of an account has a higher total, the balancing figure is the credit balance. If the two sides are equal, that account will show nil balance.

**Example: