IGC-L07: Ledger Accounts

Recording double entry transactions in T-accounts.

Learning Objectives

By the end of this lesson, you will be able to:
  • Explain the purpose of ledger accounts
  • Prepare T-accounts accurately
  • Post transactions from double entry
  • Balance ledger accounts correctly

Concept Framework

What is a Ledger?

A ledger is a book of accounts where all business transactions are recorded in individual accounts.

Each account records increases and decreases separately.

A ledger account is presented in T-format:

Left side → Debit (Dr)
Right side → Credit (Cr)

Each transaction affects two separate ledger accounts.

If a transaction is:

Debit Cash
Credit Capital

Then:

Cash account → Debit side
Capital account → Credit side

Both entries must be recorded.

At the end of a period:

        1. Total both sides.

        2. Calculate the difference.

        3. Insert balancing figure.

        4. Bring down balance to next period.

Balancing ensures accuracy.

Worked Examples

Example 1

Transaction:
Owner invests ₹40,000 cash.

Cash Account

Debit: 40,000
Credit: —

Capital Account

Debit: —
Credit: 40,000

Example 2

Transaction:
Paid rent ₹5,000 in cash.

Rent Account

Debit: 5,000
Credit: —

Cash Account

Debit: —
Credit: 5,000

📌 Additional ledger posting practice with step-by-step explanations is available in the 🎯 Question Papers + YouTube Explanation section.

Structured Practice

Level 1 – Concept Check

Define ledger.
What is a T-account?
What does Dr mean?

Post the following to ledger accounts:

Owner invested ₹60,000 cash.
Paid electricity ₹3,000.

      1. Record the following transactions in ledger accounts and balance them:

        1. Started business with ₹100,000.

        2. Purchased goods ₹20,000 cash.

        3. Paid wages ₹8,000.

        📌 Additional structured ledger questions are available in the 🎯 Question Papers + YouTube Explanation section.

Proficiency Check

Learn – Unlearn – Relearn Approach

If you believe you have already mastered ledger accounts, attempt the following without referring to notes.
If you are unable to answer confidently, revisit the lesson before proceeding.

        1. A business purchases equipment ₹25,000 on credit. Post to relevant ledger accounts.

        2. Cash sales ₹15,000. Show complete ledger entries.

        3. Rent ₹6,000 paid in cash. Later ₹2,000 remains unpaid. How will this affect the ledger accounts?

        4. Explain why balancing a ledger account does not prove total accuracy.

Detailed Activity Solutions

Solution to Level 3 question

Solution to Structured Practice

Cash Account – Debit ₹60,000
Capital Account – Credit ₹60,000

Electricity Account – Debit ₹3,000
Cash Account – Credit ₹3,000

Solutions to Proficiency Check

      1.  

Equipment Account – Debit ₹25,000
Trade Payables – Credit ₹25,000

      1.  

Cash Account – Debit ₹15,000
Sales Account – Credit ₹15,000

      1.  

Rent Account – Debit ₹6,000
Cash – Credit ₹6,000

Outstanding Rent – Credit ₹2,000
Rent Expense remains ₹6,000

      1.  

Balancing ensures arithmetic accuracy of that account only.
It does not guarantee that transactions were recorded correctly in all accounts.

Marking Logic

2 marks – Correct ledger posting

2 marks – Accurate balancing

2 marks – Logical explanation

How This Topic Appears in the Examination

This topic commonly assessed in:

• Paper 2 structured ledger questions
• Transaction posting exercises
• Balancing accounts

Examiners frequently assess:

Correct posting
Balancing accuracy
Logical explanation

Students should practise ledger preparation regularly and review video explanations to strengthen posting skills.

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.

📌 Students should regularly attempt past examination questions and review the YouTube explanations to strengthen structured answering technique.

Self-Assessment Checklist​

  • I can prepare T-accounts confidently
  • I can post transactions accurately
  • I can balance accounts correctly
  • I understand common ledger errors
← Previous Lesson → IGC-L06: Double Entry System
Next Lesson → IGC-L08: Business Documents

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