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The Ledger q

The document discusses the meaning and purpose of ledgers, the double entry concept, and the rules for recording transactions. It includes practical exercises for preparing trial balances and identifying appropriate ledger types. Additionally, it outlines common errors in trial balances and provides examples of transactions to be recorded in relevant ledgers.

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joy.wanjiku3405
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5 views

The Ledger q

The document discusses the meaning and purpose of ledgers, the double entry concept, and the rules for recording transactions. It includes practical exercises for preparing trial balances and identifying appropriate ledger types. Additionally, it outlines common errors in trial balances and provides examples of transactions to be recorded in relevant ledgers.

Uploaded by

joy.wanjiku3405
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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24.

THE LEDGER
The topic entails:
 Meaning and purpose of ledger
 Record information in relevant ledgers
 Explain the concept of double entry as the basis of making entries into the
ledger.
 Discussing the rule of recording transactions in various ledger accounts.
 Discussing procedure of balancing ledger accounts and explain the uses of
the various columns.
 Preparation of trial balance from the ledger account balance.
 Discuss purpose and limitations of a trial balance.
 Classify ledger accounts and discuss the various types.

1. Prepare Betty’s trial balance from the following information

Items ksh
Purchases 130,000
Capital 150,000
Sales 165,000
Debtors 45,000
Creditors 40,000
Motor vehicles 120,000
Stock 50,000
Cash at bank 10,000
2. Identify the situation in which the following types of ledgers are appropriate:

i) Creditors ledger
ii) Private ledgers
iii) Normal ledger

3. The following balances were extracted from the books of Nyatike Traders
Limited as at
31st January 2010 Kshs.
Discount allowed 5,000
Buildings 250,000
Return outwards 6,000
Purchases 74,000
Creditors 20,000
Drawings 16,000
Capital 319,000
Required: Prepare Nyatike Traders Ltd trial balance as at that date
]4. The following information relates to Kebirigo Traders as at 31st December,
2009
Kshs.
Buildings 100,000
Debtors 54,000
Capital 136,000
Sales 85,000
Purchases 48,000
Stock 1 Jan.2009 25,400
Creditors 35,700
General expenses 31,800
Bank overdraft 2,500
st
Prepare a trial balance as at 31 December, 2009

5. The following trial balance was prepared by an incompetent book keeper thus
failed to
balance

Account Dr. Cr.


Fixed assets 250,000
Purchases 80,000
Sales 120,000
Debtors 22,000
Stock 60,000
Creditors 45,000
Capital 247,000
449,000 375,000

6. Outline four errors in a trial balance although present it would still balance
7. Given below is a list of subsidiary ledgers:
General ledger
Nominal ledger
Purchases ledger
Sales ledger
Cash book
Indicate in which ledger the following accounts should be recorded

8. Record the following transactions in the relevant ledger accounts for the
month of June, 2009
June 1: invested shs.100,000 cash in a retail business
June 2: Obtained a co-operative loan of Shs.20,000 cash
June 3: bought furniture Shs. 70,000, paying Shs.40,000 cheque and the bal-
ance in cash
9. The following transaction took place in the business of Highlands Retail in the
month
of June 2008
1.6.2008-commenced business with Kshs. 120,000 in cash
4.6.2008-transferred kshs66, 000 from business till to the bank
13.6.2008-brought his private furniture worth kshs. 15,000 into the business
for business use
28.6.2008-borrowed a loan in cash kshs.40, 000

Required: Post the transactions into the relevant ledger account

24. -THE LEDGER


1. Mr. Omanda started a business in January 2000 with cash in hand 100,000.
The following
transactions took place during the year:-
January: Bought stock by cash Kshs.20,000
February: Sold goods on credit Kshs.30,000
March: Opened a bank account by banking cash Kshs.60,000
April: A debtor returned goods worth shs.5,000
May: Bought goods Kshs.70,000 on credit
June: The owner took cash Shs.10,000 to pay his children school fees
2. Record the following transactions in the relevant ledger accounts, balance the
account
and extract a trial balance

Date Transaction
1/4/2007 Mary started business with shs.80,000 cash
2/4/2007 Bought stationery for shs.4,000 and paid in cash
3/4/2007 Opened a bank account and deposited shs.50,000 from
the cash till
4/420007 Bought motor vehicle worth shs.250,000 from Lucy
motors on credit
5/4/2007 Bought postage stamps for shs.60 in cash

3. The following information relates to Ndhiwa resort traders for the month of
November 2009:-
November, 1.started a business with shs 160,000 cash
2. Purchases shs.120,000
3. Made sales in cash shs.126,000
4. Paid for electricity shs.1000 in cash
5. Received rent of shs.37 500 in cash
6. Gave discount of shs.6,000 in cash
Required :- i) Post the above information in the relevant ledger accounts
and balance them off
ii) Extract a trial balance

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