ACCY121-Week 3-Journals and and Ledgers (1).pptx

ACCY121-Week 3- Journals and Ledgers ©2023 John Wiley & Sons Australia Ltd  Journals Example #1: Owner contributes $20 000 in cash to start a business – Cash (asset) is debited because the debit represents an increase in cash – Capital (equity) is credited because...

ACCY121-Week 3- Journals and Ledgers ©2023 John Wiley & Sons Australia Ltd  Journals Example #1: Owner contributes $20 000 in cash to start a business – Cash (asset) is debited because the debit represents an increase in cash – Capital (equity) is credited because the credit represents an increase in equity Date Name of account Dr Cr 1/9/2 $20 Cash 3 000 Capital – N $20 Bartholomew 000  Ledgers A ledger is an account that accumulates all the information about changes in specific account balances. A ledger can be used in place of a journal. Each ledger account will have: – a debit (left side) – a credit (right side)  Rules of debits and credits Example: Cash ledger – The cash account has a normal debit balance – Entries are as per journals, i.e., a debit entry in the journal is a debit entry in the ledger account – Balance the account to determine the amount carried forward to the next period