Ledger

 The ledger accumulates all data necessary prior to the preparation of financial statements. All
similar transactions recorded in the journal are grouped together in the ledger.
 The ledger appears basically in the form of capital letter T. The left side of the ledger provides
the data for debit entry, and the right side of it presents information about the credit entry.
 The ledgers are arranged in the following order of accounting elements: assets, liabilities,
capital, income and expenses accounts.
 The ledger has the following major parts:
1. the account title and page number;
2. the debit side;
3. the credit side.
Example:

The following transactions happened during the month of February, 2015:

Feb. 1 Angel invested cash of ₱500,000 in the business.

15 Borrowed money from Metro Bank, ₱200,000 for additiona;l working capital.

30 Paid the rental for the month, ₱5,000

Journal

2015 Particulars Debit Credit

Feb 1 Cash on Hand ₱500,000
Angel, Capital ₱500,000
To record initial investment
15 Cash on Hand ₱200,000
Bank loan payable ₱200,000
To record bank loan
30 Rent Expense ₱5,000
Cash on Hand ₱5,000
To record rent for the month

Ledger

2015 Particulars Debit 2015 Particulars Credit

Feb 1 Initial Investment ₱500,000 Feb 30 Advance Rent ₱5,000
15 Borrowed Money ₱200,000

Footing the ledger

 Is the process of adding the debit and the credit money columns of the ledger and finding their
balances.

Debit Totals Greater than Credit Totals

- If an account has a debit balance, the debit total is higher than the credit total, the difference is
placed on the “Particular” column of the debit side.

Credit Totals Greater than Debit Totals

- If an account has a credit balance, the credit total is bigger than the debit total, the difference is
placed on the “Particular” column of the credit side.