The Ledger &
Posting from Journal
Master the Ledger — the principal book of accounts. Learn the T-format, posting rules, balancing technique, and the difference between debit and credit balances. Every account you open in Tally or by hand follows exactly this structure.
5Posting Rules
20MCQs
20Quiz Qs
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📌 Why Ledger Is the Heart of Accounting
From Journal Entries to Account-wise Summary
The Journal records every transaction in date order. But to know the total effect on each account — how much cash do I have? how much does Ramesh owe me? — you need the Ledger. The Ledger collects all entries related to one account and gives you its running balance. Every Trial Balance, P&L Account and Balance Sheet starts from the Ledger.
1. Meaning and Definition of Ledger
A Ledger is a book of final entry (also called the principal book of accounts) in which all transactions, already recorded in the Journal, are classified and posted account-wise. Each account gets its own page (or folio) in the Ledger.
Definition: "The Ledger is a book which contains, in a classified and summarised form, a permanent record of all transactions."
Key contrast: Journal = chronological record (date-wise). Ledger = analytical record (account-wise). Together they form the complete double-entry system.
2. Utility / Importance of Ledger
1
Account-wise Summary
Shows the complete record of each account at one place — all debits, all credits, and the net balance.
2
Trial Balance Preparation
Closing balances from the Ledger are directly used to prepare the Trial Balance to verify arithmetical accuracy.
3
Final Accounts
Trading Account, P&L Account, and Balance Sheet are all prepared from Ledger account balances.
4
Control Over Debtors & Creditors
Individual debtor and creditor balances can be tracked instantly — essential for collections and payments.
5
Legal Evidence
A properly maintained Ledger is accepted as legal evidence in courts and by tax authorities.
6
Facilitates Audit
Auditors verify Ledger postings against Journal entries to confirm accuracy and detect fraud.
3. Format of a Ledger Account (T-Format)
Each Ledger account is written in a T-format with two sides: Debit (Dr.) on the Left and Credit (Cr.) on the Right. Each side has four columns: Date, Particulars, Journal Folio (J.F.), and Amount.
| Dr. [Account Name] Account Cr. | |||||||||
| Date | Particulars | J.F. | Amount (₹) | Date | Particulars | J.F. | Amount (₹) | ||
| YYYY Mon DD | To | Source A/c name | — | XX,XXX | YYYY Mon DD | By | Source A/c name | — | XX,XXX |
| To | Balance c/d | — | XX,XXX | By | Balance c/d | — | XX,XXX | ||
Key format rules: Dr. side entries use prefix "To". Cr. side entries use prefix "By". The closing balance is written as "Balance c/d" (carried down) on the heavier side to make both sides equal. It reopens as "Balance b/d" (brought down) on the opposite side in the next period.
4. Posting Rules — How to Transfer from Journal to Ledger
Posting means transferring entries from the Journal to the respective Ledger accounts. Follow these five rules every time:
1
Open the Debited Account's Ledger Page
In the account that was debited in the Journal, make an entry on the Dr. (left) side. Write "To [Credited Account Name]" in the Particulars column.
2
Open the Credited Account's Ledger Page
In the account that was credited in the Journal, make an entry on the Cr. (right) side. Write "By [Debited Account Name]" in the Particulars column.
3
Record Date and Amount
Copy the exact date from the Journal entry. Record the amount in the Amount column of both accounts.
4
Record Journal Folio (J.F.)
Write the Journal page number in the J.F. column of the Ledger. This cross-references the two books for audit and verification.
5
Record Ledger Folio (L.F.) in Journal
Go back to the Journal and write the Ledger page number in the L.F. column of the Journal entry. This completes the cross-reference.
5. Comprehensive Posting Example — M/s Rajesh Traders, April 2026
Journal entries for M/s Rajesh Traders (same as Chapter 7). We post the first four transactions to their respective Ledger accounts.
Journal Summary (selected transactions):
Apr 1: Cash A/c Dr ₹8,00,000 | To Capital A/c ₹8,00,000
Apr 3: Furniture A/c Dr ₹60,000 | To Cash A/c ₹60,000
Apr 5: Purchases A/c Dr ₹2,40,000 | To Ramesh A/c ₹2,40,000
Apr 8: Cash A/c Dr ₹3,00,000 | To Sales A/c ₹3,00,000
Apr 16: Salary A/c Dr ₹45,000 | To Cash A/c ₹45,000
Apr 20: Bank A/c Dr ₹2,00,000 | To Cash A/c ₹2,00,000
Apr 1: Cash A/c Dr ₹8,00,000 | To Capital A/c ₹8,00,000
Apr 3: Furniture A/c Dr ₹60,000 | To Cash A/c ₹60,000
Apr 5: Purchases A/c Dr ₹2,40,000 | To Ramesh A/c ₹2,40,000
Apr 8: Cash A/c Dr ₹3,00,000 | To Sales A/c ₹3,00,000
Apr 16: Salary A/c Dr ₹45,000 | To Cash A/c ₹45,000
Apr 20: Bank A/c Dr ₹2,00,000 | To Cash A/c ₹2,00,000
📈 Ledger Account 1 — Cash Account
| Dr. Cash Account Cr. | |||||||||
| Date | Particulars | J.F. | Amount (₹) | Date | Particulars | J.F. | Amount (₹) | ||
| Apr 1 | To | Capital A/c | 1 | 8,00,000 | Apr 3 | By | Furniture A/c | 1 | 60,000 |
| Apr 8 | To | Sales A/c | 1 | 3,00,000 | Apr 16 | By | Salary A/c | 1 | 45,000 |
| Apr 20 | By | Bank A/c | 1 | 2,00,000 | |||||
| Apr 30 | By | Balance c/d | 7,95,000 | ||||||
| Total | 11,00,000 | Total | 11,00,000 | ||||||
| May 1 | To | Balance b/d | 7,95,000 | ||||||
Cash Account has a Debit Balance of ₹7,95,000. Dr. total ₹11,00,000 > Cr. total ₹3,05,000 → Difference ₹7,95,000 written as "By Balance c/d" on Cr. side to balance. Reopens on Dr. side as "To Balance b/d" on May 1.
📈 Ledger Account 2 — Capital Account
| Dr. Capital Account Cr. | |||||||||
| Date | Particulars | J.F. | Amount (₹) | Date | Particulars | J.F. | Amount (₹) | ||
| Apr 30 | To | Balance c/d | 8,00,000 | Apr 1 | By | Cash A/c | 1 | 8,00,000 | |
| Total | 8,00,000 | Total | 8,00,000 | ||||||
| May 1 | By | Balance b/d | 8,00,000 | ||||||
Capital Account has a Credit Balance of ₹8,00,000. Cr. side is heavier → Difference written as "To Balance c/d" on Dr. side. Reopens as "By Balance b/d" on Cr. side (May 1).
📈 Ledger Account 3 — Ramesh Account (Creditor)
| Dr. Ramesh Account Cr. | |||||||||
| Date | Particulars | J.F. | Amount (₹) | Date | Particulars | J.F. | Amount (₹) | ||
| Apr 30 | To | Balance c/d | 2,40,000 | Apr 5 | By | Purchases A/c | 1 | 2,40,000 | |
| Total | 2,40,000 | Total | 2,40,000 | ||||||
| May 1 | By | Balance b/d | 2,40,000 | ||||||
6. Balancing a Ledger Account — Step-by-Step Method
1
Total Both Sides
Add up all amounts on the Dr. side and all amounts on the Cr. side separately at the end of the period.
2
Find the Difference
Subtract the smaller total from the larger total. This difference is the closing balance (Balance c/d).
3
Write Balance c/d on the Lighter Side
Write "Balance c/d" (carried down) on whichever side has the smaller total, so both sides become equal.
4
Write Equal Totals
Both sides now show the same total. Draw double lines under them to show the account is balanced.
5
Bring Down the Balance
On the NEXT period's opening date, write "Balance b/d" (brought down) on the OPPOSITE side from where c/d was written.
7. Types of Balances — Debit vs Credit
| Balance Type | When It Occurs | Which Accounts Normally Have This |
|---|---|---|
| Debit Balance | Dr. total > Cr. total — Balance c/d goes on Cr. side; Balance b/d opens on Dr. side | All Asset A/cs (Cash, Bank, Furniture, Machinery, Debtors), Expense A/cs (Salary, Rent), Drawings A/c, Purchases A/c, Losses A/c |
| Credit Balance | Cr. total > Dr. total — Balance c/d goes on Dr. side; Balance b/d opens on Cr. side | All Liability A/cs (Creditors, Loans, Bank Overdraft), Capital A/c, Sales A/c, Income A/cs (Rent Received, Commission Received) |
| Nil Balance | Dr. total = Cr. total exactly — no balance c/d needed | Nominal A/cs closed to P&L at year end (Salary, Rent etc.) |
8. Journal vs Ledger — Key Differences
| Basis | Journal | Ledger |
|---|---|---|
| Nature | Book of original/prime entry | Book of final entry / principal book |
| Recording basis | Chronological (date-wise) | Analytical (account-wise) |
| Format | 5-column tabular format | T-format (Dr. side left, Cr. side right) |
| Entry prefix | Dr. account first; "To" for Cr. account | "To" on Dr. side; "By" on Cr. side |
| Balance | No balancing done — just totalled | Balanced at end of each period |
| Purpose | Records what happened and why (narration) | Shows net position of each account |
| Used for | Chronological audit trail | Preparing Trial Balance and Final Accounts |
9. Meaning of Posting
Posting is the process of transferring entries from the Journal to the respective Ledger accounts. After posting, every Journal entry leaves a trace in two Ledger accounts — one Dr. and one Cr. — maintaining the double-entry principle throughout.
Cross-referencing: J.F. (Journal Folio) in the Ledger → page number of the Journal from where the entry was posted.
L.F. (Ledger Folio) in the Journal → page number of the Ledger account where the entry has been posted.
L.F. (Ledger Folio) in the Journal → page number of the Ledger account where the entry has been posted.
⚡ Quick Recall — Chapter 8 Key Points
Ledger = Book of Final Entry / Principal Book. Records transactions account-wise after they are journalised.
T-format: Dr. side (Left) uses "To" prefix. Cr. side (Right) uses "By" prefix.
Posting rule: Debited account in Journal → entry on Dr. side of that Ledger account writing "To [Credited A/c]". Credited account → entry on Cr. side writing "By [Debited A/c]".
Balancing: Add both sides. Write difference as "Balance c/d" on the lighter (smaller) side. Reopen as "Balance b/d" on the OPPOSITE side next period.
Debit Balance (Dr. > Cr.) → Assets, Expenses, Drawings, Losses. Credit Balance (Cr. > Dr.) → Liabilities, Capital, Income, Sales.
J.F. in Ledger = Journal page number. L.F. in Journal = Ledger page number. Both are filled after posting is complete.
Journal is chronological (date-wise). Ledger is analytical (account-wise). Both are needed for complete double-entry.
Nominal A/cs (expenses and incomes) have nil balance at year end — they are closed to P&L A/c, not carried forward.
Personal A/cs of debtors have Debit Balance. Personal A/cs of creditors have Credit Balance.
Ledger is the source for preparing the Trial Balance. Without accurate Ledger, no Final Accounts are possible.
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20 MCQs — The Ledger
Mixed difficulty — ledger format, posting rules, balancing, and debit/credit balances. Q17–Q20 are CUET-level.
📚 Questions 1 to 20
1
The Ledger is called the "Principal Book of Accounts" because:
AIt is the first book where transactions are recorded
BIt contains the classified account-wise summary from which Trial Balance and Final Accounts are prepared
CIt is maintained by the principal (owner) of the business
DIt is required by law to be submitted to the government
Answer: B. The Ledger is called the Principal Book because all Ledger account balances are used to prepare the Trial Balance, P&L Account, and Balance Sheet. The Journal is the book of original entry; the Ledger is the book of final entry.
2
In the Ledger T-format, which prefix is used for entries on the DEBIT side?
ABy
BTo
CFor
DFrom
Answer: B — "To". Dr. side (left) uses "To" prefix. Cr. side (right) uses "By" prefix. Memory trick: Dr. = To | Cr. = By. This is a fixed rule in Ledger format — never reversed.
3
Journal entry: Furniture A/c Dr ₹50,000; To Cash A/c ₹50,000. How is this posted to the Furniture Ledger Account?
ACr. side: "By Cash A/c ₹50,000"
BDr. side: "To Cash A/c ₹50,000"
CDr. side: "To Furniture A/c ₹50,000"
DCr. side: "By Furniture A/c ₹50,000"
Answer: B. Furniture A/c was debited in the Journal → entry goes on the Dr. (left) side of Furniture Ledger A/c. The Particulars column shows the other account (Cash A/c) with prefix "To". Amount: ₹50,000.
4
Journal entry: Furniture A/c Dr ₹50,000; To Cash A/c ₹50,000. How is this posted to the Cash Ledger Account?
ACr. side: "By Furniture A/c ₹50,000"
BDr. side: "To Furniture A/c ₹50,000"
CDr. side: "To Cash A/c ₹50,000"
DCr. side: "By Cash A/c ₹50,000"
Answer: A. Cash A/c was credited in the Journal → entry goes on the Cr. (right) side of Cash Ledger A/c. The Particulars column shows the other account (Furniture A/c) with prefix "By". Amount: ₹50,000.
5
Cash A/c: Dr. side total ₹9,00,000; Cr. side total ₹3,20,000. The closing balance and its side are:
ACredit Balance ₹5,80,000
BDebit Balance ₹5,80,000
CDebit Balance ₹12,20,000
DCredit Balance ₹12,20,000
Answer: B — Debit Balance ₹5,80,000. Dr. total ₹9,00,000 > Cr. total ₹3,20,000 → Difference = ₹5,80,000. Since Dr. side is heavier, the balance is a Debit Balance. "Balance c/d" written on Cr. side; reopens as "Balance b/d" on Dr. side.
6
Capital A/c: Dr. side total ₹40,000 (drawings); Cr. side total ₹5,00,000 (capital introduced). Closing balance is:
ADebit Balance ₹4,60,000
BCredit Balance ₹4,60,000
CDebit Balance ₹5,40,000
DCredit Balance ₹5,40,000
Answer: B — Credit Balance ₹4,60,000. Cr. total ₹5,00,000 > Dr. total ₹40,000 → Difference = ₹4,60,000. Cr. side is heavier → Credit Balance. "Balance c/d" on Dr. side; reopens as "Balance b/d" on Cr. side.
7
"Balance c/d" in a Ledger account is written on which side?
AAlways on the Debit side
BAlways on the Credit side
COn the lighter (smaller total) side, to make both sides equal
DOn the heavier (larger total) side
Answer: C. Balance c/d is always written on the side with the SMALLER total, so that both sides become equal. The balance then opens on the OPPOSITE side as "Balance b/d" in the next period — which is where the actual net balance sits.
8
Which of the following accounts would normally show a CREDIT balance?
ACash A/c
BSalary A/c
CDebtors A/c
DCreditors A/c
Answer: D — Creditors A/c. Creditors are liabilities → Credit Balance. Cash (Real, asset) → Debit. Salary (Nominal, expense) → Debit. Debtors (Personal, asset) → Debit. Liabilities, Capital, and Income accounts carry Credit balances.
9
J.F. written in the Ledger stands for:
AThe Ledger page number of this account
BThe page number of the Journal from where this entry was posted
CThe journal entry number within the Journal
DJoint folio — used when two journals are combined
Answer: B — Journal Folio. J.F. in the Ledger = Journal page number from where the entry was posted. L.F. in the Journal = Ledger page number where the account appears. Together they form a complete cross-reference system.
10
Business started with ₹5,00,000 cash. After posting, which account gets "To Capital A/c" on its Dr. side?
ACapital A/c
BSales A/c
CCash A/c
DPurchases A/c
Answer: C — Cash A/c. Journal: Cash A/c Dr → posted to Dr. side of Cash Ledger A/c with "To Capital A/c". Capital A/c Cr → posted to Cr. side of Capital Ledger A/c with "By Cash A/c".
11
Goods sold on credit to Priya ₹80,000. After posting, Priya's account shows:
ADebit Balance ₹80,000 — she is a debtor (owes us money)
BCredit Balance ₹80,000 — she is a creditor
CNil balance — both sides cancel out
DCredit Balance ₹80,000 — sales are always credited
Answer: A. Journal: Priya A/c Dr ₹80,000 (she is the receiver → Personal A/c). Posted to Dr. side of Priya's Ledger. Since no payment yet, Dr. total > Cr. total → Debit Balance ₹80,000. Debtors always show Debit Balance.
12
Which accounts are closed to nil balance at year end and NOT carried forward?
AReal Accounts (assets)
BPersonal Accounts (debtors and creditors)
CNominal Accounts (expenses and incomes)
DCapital Account
Answer: C — Nominal Accounts. All expense and income accounts (Salary, Rent, Commission Received, Sales, Purchases etc.) are closed to P&L A/c at year end — their balance becomes nil. Real and Personal accounts carry forward their balances to the next year.
13
The key difference between Journal and Ledger is:
AJournal is maintained by a clerk; Ledger by the owner
BJournal records transactions chronologically; Ledger records them account-wise (analytically)
CJournal is used for large businesses; Ledger for small businesses
DJournal contains final balances; Ledger contains narrations
Answer: B. Journal = chronological order (date-wise). Ledger = analytical order (account-wise). This is the fundamental distinction. Journal has narration; Ledger does not. Ledger is balanced; Journal is just totalled.
14
Posting means:
AWriting entries into the Journal for the first time
BTransferring entries from the Journal to the respective Ledger accounts
CBalancing each Ledger account at end of the period
DPreparing the Trial Balance from Ledger balances
Answer: B. Posting = transferring from Journal to Ledger. Each Journal entry creates two postings: one Dr. entry in the debited account's Ledger, and one Cr. entry in the credited account's Ledger.
15
Salary A/c: Dr. side ₹60,000 (salary paid). Cr. side: nil. At year end the account is:
ACarried forward as Debit Balance to next year
BTransferred to Balance Sheet on liabilities side
CClosed by transferring to P&L A/c — Salary A/c Cr; P&L A/c Dr
DLeft open with Debit Balance forever
Answer: C. Salary is a Nominal Account (expense). At year end: P&L A/c Dr ₹60,000; To Salary A/c Cr ₹60,000 — closes Salary A/c to nil. It then appears as an expense in P&L Account, not carried forward in the Ledger.
16
Sales A/c in the Ledger will normally show a:
ADebit Balance — sales reduce assets
BCredit Balance — sales are income (Nominal A/c, revenue)
CNil balance always
DDebit Balance — sales increase debtors
Answer: B. Sales A/c is a Nominal Account representing income. Income accounts are always credited → Cr. side > Dr. side → Credit Balance throughout the year. At year end it is closed to P&L (Cr. side of P&L).
17
CUET: Assertion (A): "Balance b/d" always appears on the same side as "Balance c/d" in a Ledger account. Reason (R): The opening balance is always the same type as the closing balance.
ABoth A and R are true, and R correctly explains A
BBoth A and R are true, but R does not explain A
CA is false; R is true
DBoth A and R are false
Answer: C — A is false; R is true. "Balance c/d" is written on the LIGHTER side. "Balance b/d" opens on the OPPOSITE (heavier) side — they are always on different sides. The Reason (R) is true: the nature of balance (Dr. or Cr.) carries forward to the next period.
18
CUET: Purchases A/c Dr ₹3,00,000. Sales Returns A/c Dr ₹20,000. Sales A/c Cr ₹5,00,000. Purchases Returns A/c Cr ₹30,000. Which TWO accounts show Debit Balances?
ASales A/c and Purchases Returns A/c
BPurchases A/c and Sales Returns A/c
CSales A/c and Sales Returns A/c
DPurchases A/c and Purchases Returns A/c
Answer: B. Purchases A/c Dr ₹3,00,000 with no Cr. entry → Debit Balance. Sales Returns A/c Dr ₹20,000 with no Cr. entry → Debit Balance. Sales A/c Cr → Credit Balance. Purchases Returns A/c Cr → Credit Balance.
19
CUET: Cash A/c: Opening Balance b/d ₹50,000; Cash Sales ₹80,000; Received from Debtors ₹40,000; Paid Rent ₹15,000; Paid Salaries ₹25,000; Deposited in Bank ₹60,000. Closing Balance of Cash A/c is:
A₹60,000 Dr.
B₹70,000 Dr.
C₹1,70,000 Dr.
D₹80,000 Cr.
Answer: B — ₹70,000 Dr. Dr. side: Opening b/d ₹50,000 + Cash Sales ₹80,000 + Debtors ₹40,000 = ₹1,70,000. Cr. side: Rent ₹15,000 + Salaries ₹25,000 + Bank deposit ₹60,000 = ₹1,00,000. Closing Balance = ₹1,70,000 − ₹1,00,000 = ₹70,000 Dr.
20
CUET: Assertion (A): The Ledger is prepared after the Journal. Reason (R): Posting can only be done after Journal entries are recorded, because the Ledger gets its data from the Journal.
ABoth A and R are true, and R correctly explains A
BBoth A and R are true, but R does not explain A
CA is true; R is false
DBoth A and R are false
Answer: A — Both true and R explains A. The correct accounting flow is Journal → Ledger. Posting (transferring from Journal to Ledger) can only happen after Journal entries exist. The Reason correctly explains why the Ledger always follows the Journal.
Chapter 8 — Live Quiz
20 questions · Ledger & Posting · One at a time · Instant feedback
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