ABSTRACT
A small firm has 20 or 30 accounts on its balance sheet and the number of invoices, cash receipts, etc. is obviously much larger than in the exercises. The term ‘ledger’ dates from the time that accounting was done manually on cards (see Preface). These cards, which together form the ledger, are called ‘accounts’. For each item on the balance sheet, an account will be opened. The balance of the account will be recorded as debit or credit on the relevant account, depending whether the account is shown as debit or credit on the balance sheet. This chapter familiarises students with the preparation of ledger accounts along with the definitions. Examples are provided to show the accounting scheme on the ledger accounts. The chapter also includes multiple exercises that help students try themselves and prepare ledger accounts for a set of financial scenarios.
