Journal and Ledger and examine the need for preparation of Trail Balance.

The process of the accounting in normal practice as follows:

The practice starts with the journalizing of entries. After journalisation, the entries passed in the journal will be passed into the ledger A/c. The immediate next stage is to prepare the trial balance.

Journal entry is an entry systematically recorded to the tune of golden rules of accounting in the journal book.

The journal entries are recorded in the sequential order. The order of recording is conventionally done on the basis of date. The journal entry usually contains two different parts, which are nothing but two different accounts affecting the transactions.

Journalising the entries are different from one transaction to another The difference is only due to nature and characteristics of the transactions. To journalise as easy as possible, the systematic approach to be adopted to post the transactions without any ambiguity.

Journalising can be generally categorized into following various categories.

  • Taking place within the same natured accounts

  • Taking part in between accounts of two different in categories

Ledger is nothing but preliminary book of accounting transactions at which, each account is separately maintained through the allotment of various pages for exclusive recording. The  exclusive allotment of pages for every account to finalize their balances. Finally, ledger can be understood that is a document of grouping the transactions under one heading . It is a fundamental book of accounts which mainly highlights the status of the accounts.

The journal entries which are recorded nothing but posting of the entries in the ledger book of accounts. Posting / entering the journal entries are routinely carried out immediately after the transactions.

Ledgering is a process of recording the transactions under one group from the early process of journalizing. Without journalizing, ledgering is not meaningful. The process of ledgering involves with various steps. The process commences from only at the completion of journalizing and ends at the end of balancing of journal accounts.

There are eleven different ledger accounts involved out of the journal entries which already transacted are finally balanced. The balanced ledger accounts should be prepared as a summary list of their balances and names. The total of both balances are  equivalent to each other. The major reason for the equivalent balances on both sides is only due to posting of entries to the tune of "Double Entry Accounting Concept (Or) Duality Concept". This is the concept which equates the total amount of resources raised with the total amount of applications of the enterprise.

Purposes of preparing the Trial Balance:

  • To prepare a statement of disclosure of final accounting balances of various ledger accounts on a particular date

  • To prepare a statement of cross checking device of accounting while in the process of posting of entries which mainly on the basis of Double entry accounting principle. It facilitates the accountant to have systematic posting of entries

  • It facilitates the enterprise for the preparation of Trading & Profit and Loss Accounts for the year ended…………….. and the Balance sheet as on dated ………………..

  • It provides the birds' eye view of accounting balances of various ledger accounts during the specified period.

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