self balancing system

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Anubhuti Bhawsar (Querist)
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07 October 2009 how should the following transaction be shown in debtors ledger adjustment account in the general ledger :

>Bills receivable drawn during the 3 months (1-1-2003 To 31-3-2003) totalled Rs. 30,000 of which bills amounting to Rs. 10,000 were endorsed in favor of suppliers. out of the endorsed bills, one bill for Rs. 6,000 was dishonoured for non-payment as the party became insolvent, his estate realised nothing.

>cheques received from customer Rs. 8,000 were dishonoured, a sum of Rs. 2,000 was irrecoverable; baddebts written off in the earlier years realised Rs. 11,000

shakuntala chhangani

shakuntala chhangani (Expert)
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10 November 2009 Hi Anubhuti,
In SBL we open Debtors Ledger Adjustment (DLA in reality total drs. A/c) A/c in General Ledger and General Ledger Adjustment (GLA)A/c in Debtors Ledger. the solution to your question is as under :
Normal entry Self balancing entry
1. BR A/c dr. 30,000 GLA A/c Dr. 30,000
To Drs. A/c 30,000 To DLA A/c 30,000

2.Crs. A/c Dr. 10,000 No Entry
To BR A/c 10,000

3.Drs. A/c Dr. 6,000 DLA A/c Dr. 6,000
To Crs A/c 6,000 To GLA A/c 6,000

4.Bad debts A/c Dr.6,000 GLA A/c Dr. 6,000
To Drs. A/c 6,000 To DLA A/c 6,000

5. Drs. A/c Dr. 8,000 DLA A/c Dr. 8,000
To Bank A/c 8,000 To GLA A/c 8,000

6.Bad debts A/c Dr.2,000 GLA A/c Dr. 2,000
To Drs. A/c 2,000 To DLA A/c 2,000

7. Cash/Bank A/c Dr. 11,000 No Entry
To Bad debts recovered A/c 11,000

further, keep in mind that a self balancing entry will be passed in DLA A/c only if the Drs. A/c appears in the nornal entry in which case Drs. A/c Will be written as DLA A/c and the the other A/c in the original entry will be written as GLA A/c in Self balancing entry

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