AS-L05 — Ledger Accounts
Understanding how transactions are organised into ledger accounts using the double entry system.
Learning Objectives
By the end of this lesson students should be able to:
• understand the purpose of ledger accounts
• prepare T-accounts correctly
• record debit and credit entries in ledger form
• balance ledger accounts
• answer examination-style questions
Concept Framework
What are Ledger Accounts?
Ledger accounts are individual records used to classify and summarise financial transactions.
Each account records:
• increases
• decreases
• balances carried forward
The T-Account Structure
Ledger accounts are commonly presented using a T-account format.
Left side → Debit
Right side → Credit
CORE RULES
| Account Type | Increase Side | Decrease Side |
|---|---|---|
| Assets | Debit | Credit |
| Expenses | Debit | Credit |
| Income | Credit | Debit |
| Liabilities | Credit | Debit |
| Capital | Credit | Debit |
TRANSACTION LOGIC
Every transaction affects at least two ledger accounts.
Debit entries are recorded on the left side.
Credit entries are recorded on the right side.
Ledger accounts help businesses track balances systematically.
Worked Examples
Example 1 — Cash Account
Cash introduced by owner £5,000
Cash Account
Debit Side:
Capital £5,000Example 2 — Rent Account
Paid rent £700 by cash
Rent Account
Debit: Cash £700
Cash Account
Credit: Rent £700Example 3 — Sales Account
Cash sales £1,200
Cash Account
Debit: Sales £1,200
Sales Account
Credit: Cash £1,200
📌 Additional questions are available in the 🎯 Question Papers + YouTube Explanation section.
Students should practise explanation questions regularly to improve examination performance.
Enrolled students may submit questions from recognised textbooks, past examination papers, or other academic material for expert clarification through the Student Doubt Support facility.
Structured Practice
Level 1 – Concept Check
Define ledger account
What is a T-account?
Level 2 – Application Practice
Explain why businesses use ledger accounts.
Level 3 – Examination Style Question
Record the following transaction in ledger accounts:
Paid wages £500 by bank
(2 marks)
📌 Additional structured questions are available in the 🎯 Question Papers + YouTube Explanation section.
∗ Additional structured questions are available in the Question Papers and YouTube Explanation section. Students should practise regularly and review video explanations for procedural clarity.
Enrolled students may submit questions from recognised textbooks, past examination papers or other genuine academic material for expert clarification through the Student Doubt Support facility.
Proficiency Check
Learn → Unlearn → Relearn
1. Can you prepare T-accounts correctly?
2. Can you identify debit and credit sides accurately?
3. Can you balance simple ledger accounts?
If unsure, revise the worked examples.
Detailed Activity Solutions
Solution to Level 3 question
Level 3 Answer:
Wages Account
Debit: Bank £500
Bank Account
Credit: Wages £500
Wages is an expense (debit)
Bank decreases (credit)
How This Topic Appears in the Examination
This topic commonly appears as:
• preparation of ledger accounts
• balancing T-accounts
• posting entries from transactions
Examiners assess:
• correct account structure
• accurate debit and credit entries
• balancing procedures
Self-Assessment Checklist
I understand ledger accounts
I can prepare T-accounts
I can record debit and credit entries correctly
I can balance ledger accounts
I can answer exam questions confidently
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