Short and excess ledger -for rounding

This query is : Resolved

Quick Summary

Query on handling rounding differences in sales. Issue arises as short and excess ledger does not appear. Solution: create a rounding off ledger and pass separate journal entries for differences instead of adjusting sales directly.

Querist : Anonymous

Querist : Anonymous (Querist)

03 July 2017 create short and excess ledger -under indirect expenses but while making rounding of sales ,
it do not appear in ledger but while making journal entry of purchase and expenses it appear , how to make rounding of sales

Aashok Kumar Sharma

Aashok Kumar Sharma

(Expert)
Follow

25 July 2025 Got it — you want to handle rounding differences in sales in your ledger, but currently when you round sales, the short and excess ledger entries are not appearing, unlike with purchases and expenses.

Here’s how to manage rounding of sales and ensure short/excess ledger entries show properly:

1. Understanding the Problem:
When you round purchase or expense amounts, the difference (rounding off) is captured in a Short and Excess Ledger (usually under indirect expenses).

But when you round sales, you might just adjust the sales figure directly, so the rounding difference doesn’t get posted separately.

Ideally, rounding differences (short or excess) should be recorded to keep accounts balanced.

2. How to Make Rounding of Sales with Short & Excess Ledger
Method A: Use Separate Rounding Ledger

Create a Rounding Off Ledger under Indirect Expenses (or Miscellaneous Expenses).

When posting sales, instead of adjusting sales amount directly, pass a journal entry for rounding difference.

Example:

Suppose actual sales amount is ₹10,025, but you want to record ₹10,000.

Difference (rounding off) = ₹25 (excess in sales).

Journal entry to record:

Particulars Debit (₹) Credit (₹)
Sales Account ₹10,000
Rounding Off (Excess) Ledger ₹25
To Debtor / Cash / Bank ₹10,025

Here, ₹25 is the excess amount, so it is debited to rounding off account.

The rounding off ledger will now appear in your accounts.

Method B: Adjust Sales & Pass Rounding Entry Separately

Post the full sales amount.

Then pass a second journal entry for rounding difference to the rounding off ledger.

3. In Tally or Other Accounting Software
While entering sales invoices, enter the exact sales figure.

Use a separate journal voucher for the rounding difference.

This way, rounding off ledger will appear in reports.

4. Summary
Rounding off should be separately accounted.

Avoid adjusting sales ledger directly to hide rounding differences.

Pass journal entry for rounding difference to a dedicated rounding off ledger under indirect expenses.

This makes your accounts clear and audit-friendly.

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now