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Assets Ledger account balancing | Ledger

Assets Ledger account balancing - Feature Image
Assets Ledger account balancing - Feature Image

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Assets Ledger account are those accounts that are related to assets of the business. Assets mean something valuable that a business owns and get benefits from it in the future or has use of it in generating income.

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Steps of closing assets Ledger account: –

It is also known as the Closing of assets Ledger account for the specific account. The closing of ledger accounts is included in the following steps: –

  • 1st Step: Totaling both sides.
  • 2nd Step: Writes the total of the largest side on both sides.
  • 3rd Step: Subtract the shorter side total from the larger side total.
  • 4th Step: Now, Write a balanced amount of the larger side which we get after subtracting it from the shorter side on the shorter side of the ledger account.

Note: – 

  • Assets ledger account always has a “Debit balance”
  • Assets Ledger account balance will always carry forward to the next financial year.

Now we will explain it further with the help of the following illustration.

We will show only transactions related to the particular Asset account

Illustration:

Prepare Bank A/c for the Month of Jan-18.

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Date Transaction Amount 
01/01/18Debit balance in the Bank a/c300,000
08/01/18Purchase goods from Pawan and paid with a cheque200,000
22/01/18Sold goods to Shallu and she paid with a cheque175,000
31/01/18Salary paid to Employees50,000

Solution:

After posting all the transaction in the journal and then posted it in the ledger we will get a ledger account as shown below:

Bank A/c

DateParticulars J.F.AmountDateParticularsJ.F.Amount
01/01/18To Balance B/d300,00008/01/18By Purchase a/c200,000
22/01/18To Sale a/c175,00031/01/18By Salary a/c50,000
Note: – if you don’t know how to post the transactions in the ledger account please click on this link ledger.
Now, we will do it step by step
1st Step: Totaling both sides.
we got Total of the Debit side is equal to 475,000/-

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and
The total of the Credit side is equal to 250,000/-

2nd Step: Writes the total of the largest side on both sides. So, that is 475,000/-

Bank A/c

DateParticulars J.F.AmountDateParticularsJ.F.Amount
01/01/18To Balance B/d300,00008/01/18By Purchase a/c200,000
22/01/18To Sale a/c175,00031/01/18By Salary a/c50,000
475,000475,000
3rd Step: Subtract the shorter side total from the larger side total.

Total of the debit side(Largest side) subtracted from the credit side total(shortest)

we got 475000 – 250000 = 225,000/-

4th Step: Now, Write a balanced amount of the larger side which we get after subtracting it from the shorter side on the shorter side of the ledger account as shown below.

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Bank A/c

DateParticulars J.F.AmountDateParticularsJ.F.Amount
01/01/18To Balance B/d300,00008/01/18By Purchase a/c200,000
22/01/18To Sale a/c175,00031/01/18By Salary a/c50,000
31/01/18By Balance c/d (B. Fig.)225,000
475,000475,000

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