Assets Ledger account balancing | Ledger

Assets Ledger account balancing - Feature Image

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.

The Following are the name of Assets account: –

  1. Cash
  2. Bank
  3. Land and Building
  4. Plant and Machinery
  5. Furniture and fixture
  6. Tools and Die
  7. Freehold Premises
  8. Stock or Inventories
  9. Computer
  10. Office Equipment
  11. Sundry Debtors
  12. Bills Receivables
  13. Investment
  14. Patent and Copyright
  15. Trade Marks
  16. Franchises
  17. Goodwill
  18. Advances to Employees
  19. Advance to Suppliers
  20. Prepaid Expenses
  21. Accrued Income

Steps of closing assets Ledger account: –

It is also known as 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 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.

Date  Transaction  Amount 
01/01/18 Debit balance in the Bank a/c 300,000
08/01/18 Purchase goods from Pawan and paid with a cheque 200,000
22/01/18 Sold goods to Shallu and she paid with a cheque 175,000
31/01/18 Salary paid to Employees 50,000

Solution:

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

Bank A/c

Date Particulars  J.F. Amount Date Particulars J.F. Amount
01/01/18 To Balance B/d 300,000 08/01/18 By Purchase a/c 200,000
22/01/18 To Sale a/c 175,000 31/01/18 By Salary a/c 50,000
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/-
and
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

Date Particulars  J.F. Amount Date Particulars J.F. Amount
01/01/18 To Balance B/d 300,000 08/01/18 By Purchase a/c 200,000
22/01/18 To Sale a/c 175,000 31/01/18 By Salary a/c 50,000
475,000 475,000
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 larger side which we get after subtracting it from the shorter side on the shorter side of the ledger account as shown below.

Bank A/c

Date Particulars  J.F. Amount Date Particulars J.F. Amount
01/01/18 To Balance B/d 300,000 08/01/18 By Purchase a/c 200,000
22/01/18 To Sale a/c 175,000 31/01/18 By Salary a/c 50,000
31/01/18 By Balance c/d (B. Fig.) 225,000
475,000 475,000

Thanks for reading the topic of Income Ledger account balancing, please comment your feedback whatever you want.

Or

If you have any question please ask us by commenting.

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.