Self balancing ledgers

A/c entries 4593 views 5 replies

Sam

181 Points Joined August 2012

Can anyone explain how self balancing ledger works...in simple language.....

i also can't understand the accounting....

1) as in i have come across a sum where,openingbalance of sundry debtors is (Dr)rs 40000 and (Cr 2000).

and in the Debtors ledger Adjustment A/c in the Genral ledger both the balances are written on the respective sides

how can a A/c have both Cr and Dr balance together

2) in the same account it has ' To GLA A/c ' and ' By GLA A/c' on both the sides.

3) what is transfer from Debtors Ledger to Creditors Ledger and vice versa (meaning)

plz help

thank you

Replies (5)

Roshan A

Chartered Accountant

458 Points Joined October 2009

1.The Debtors account you talking about is kind of group account & consist of balances of various debtors.Thus Debtor A from whom amt is receivable will be shown in Debit side & say an advance has been received from Debtor B then it will have Credit effect on Debtors(group) account.

3. It may happen that you sell some goods to debtor A & also purchase some other goods from Creditor A.Thus amt is payable & receivable to/from Mr A and so these amts are written off against each other as adjustment:

Creditors account Dr.

To Debtors account

Sam

181 Points Joined August 2012

thanks

What exactly is GLA A/c?(genral ledger adjustment account)

it is written in place of SalesA/c etc

Roshan A

Chartered Accountant

458 Points Joined October 2009

Yes its kind of sales account because to make an entry you need to give Dr & Cr(to 2 different accounts) as per rules of double entry system.Thus this is a notional account created with name GLA