Ledger

Debit side of the account that was debited in journal

Step 1: Posting means transferring journal entries to the Ledger correctly. Step 2: The debit part of a journal entry is posted on the DEBIT side of the account that was debited in the journal. Step 3: Similarly, the credit part of the journal entry is posted on the CREDIT side of the account that was credited in the journal. Step 4: In the particulars column of the debited account, we write the name of the credited account with prefix 'To'. Step 5: This maintains the double-entry system — every transaction has equal debit and credit effects in the Ledger just as in the Journal.

Compound Entry

Step 1: A 'Simple Entry' involves only two accounts — one debit and one credit. Step 2: When a single transaction affects MORE than two accounts and is recorded as one entry, it is called a 'Compound Entry'. Step 3: For example, if Bank and Discount Allowed are both debited against one creditor being credited, that is a compound entry. Step 4: An 'Opening Entry' is passed at the beginning of the accounting year to record opening balances of assets and liabilities — it is a different concept. Step 5: A 'Closing Entry' is used to close revenue and expense accounts at year-end. The Compound Entry

Debit side — To Balance b/d

Step 1: At the beginning of a new accounting year, an Opening Entry records all asset, liability, and capital balances. Step 2: All asset accounts normally have a DEBIT balance (assets = debit balance rule). Step 3: So when opening an asset account in the Ledger, the balance is written on the DEBIT side. Step 4: The description used is 'To Balance b/d' — where 'b/d' means 'brought down' from the previous year. Step 5: For liabilities and capital, which have CREDIT balances, we write 'By Balance b/d' on the credit side. Never confuse 'b/d' (brought down = opening) with 'c/d' (carried down = clo

Debit side as To Balance c/d

Step 1: Balancing an account means making both sides equal by writing the difference on the shorter side. Step 2: If Credit side > Debit side, it means the credit side is HEAVIER. Step 3: To balance, we put the difference on the SHORTER side — which is the Debit side. Step 4: This difference is written as 'To Balance c/d' (carried down) on the Debit side. Step 5: This balance is then brought to the CREDIT side of the next period as 'By Balance b/d', indicating a credit balance. A credit balance typically appears in liability, capital, and income accounts.