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General Ledger Overview and Notes

The document discusses general ledger accounting concepts including the difference between balance sheet and nominal accounts, examples of account types and their debits and credits, and an explanation of trial balances. Balance sheet accounts are permanent accounts while nominal accounts reset each year. The trial balance checks the accuracy of double entry accounting by ensuring debits equal credits.

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Selwandile Zondi
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105 views4 pages

General Ledger Overview and Notes

The document discusses general ledger accounting concepts including the difference between balance sheet and nominal accounts, examples of account types and their debits and credits, and an explanation of trial balances. Balance sheet accounts are permanent accounts while nominal accounts reset each year. The trial balance checks the accuracy of double entry accounting by ensuring debits equal credits.

Uploaded by

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

GENERAL LEDGER

What is the difference between Balance Sheet Accounts and Nominal


Account?
● The nominal account is an income statement account (expenses, income,
loss, profit). It is also known as a temporary account.
● The balance sheet account ( Asset, Liability, owner's equity), which are
permanent accounts. So nominal accounting starts with a zero balance at the
start of every accounting year.

GENERAL LEDGER
CHEAT NOTE:

DEBIT CREDIT

D C
DEBTORS CREDITORS
E L
EXPENSES LIABILITIES
A I
ASSETS INCOME
D C
DRAWINGS CAPITAL

DR_____________________________________________________________CR
-C+
CAPITAL
+A-
ASSETS
-L+
LIABILITIES
-I+
INCOME
+E-
EXPENSES
-O+

OWNERS EQUITY
BALANCE SHEET ACCOUNT SECTION
OWNERS EQUITY
B1- CAPITAL
B2- DRAWINGS

FIXED ASSET
B3- LAND AND BUILDING
B4- VEHICLES
B5- EQUIPMENT

CURRENT ASSETS
B6- TRADING STOCK
B7- DEBTORS CONTROL
B8- BANK
B9- CASH FLOAT
B10- PETTY CASH
B11- CREDITORS CONTROL

NOMINAL SHEET ACCOUNT SECTION


INCOME
N1- SERVICES OR SALES
N2- COST OF SALES
N3- DEBTORS ALLOWANCE

EXPENSES
N4- IN ALPHABETICAL ORDER
TRIAL BALANCE
1. Summary of the accounts balances in the General Ledger.
2. Accuracy of the double entry system is tested by doing a Trial Balance
3. Adding the debits should equal the credits
4. Only done at the end of the month.
BALANCE SHEET ACCOUNT SECTION FOL DEBIT CREDIT

OWNERS EQUITY

Capital B1

Drawings B2

Debtors Allowance B3

FIXED ASSETS

Land and Buildings B4

Vehicle B5

Furniture B6

Equipment B7

CURRENT ASSETS

Trading Stock B8

Bank B9

FIXED LIABILITIES

Long Term Loan B10

CURRENT LIABILITIES

Creditors B11

NOMINAL ACCOUNT SECTION

Sales N1

Cost of sales N2

Discount Received N3

Commission Income N4

Rent Income N5

EXPENSES ALPHABETICAL ORDER N6

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