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how do we post opening entries like debtors and creditors in journal?

asked Dec 28, 2015 in Journal Entries by sesera reddy (2 points) 1,494 views

1 Answer

0 votes

                  Balance Sheet of Mr. Ram as on 31/3/2011

Liabilities

 

Amount (Rs.)

Assets

 

Amount (Rs.)

Bank Overdraft

26000

Cash in hand

10000

Creditors

76000

Debtors

45000

Capital

301500

Investments

35000

                

 

Stock

70000

       

 

Motor car

80000

 

 

Plant

155000

 

 

Patents

8000

 

 403500

 

403500

Opening Entry: The balances of various accounts in balance sheet are called permanent accounts.  These are accounts of Assets, Liabilities and Capital.  These accounts are carried forward to the books of the next accounting period.  In the books of next year, an opening entry is passed with the help of these accounts as shown below.  The debits and credits of opening entry are equal because that represents the Accounting Equation.  Refer to the balance sheet of the example above.

The opening entry with regard to it will be recorded as follows:

 

      Cash A/c                      Dr.       10000

      Debtors A/c                 Dr.       45500

      Investments A/c          Dr.       35000

      Stock A/c                     Dr.       70000

      Motor Car A/c             Dr.       80000

      Plant A/c                     Dr.      155000

      Patents A/c                  Dr.         8000

        To Overdraft A/c                   26000

        To Creditors A/c                    76000

        To Capital A/c                     301500

 

answered Dec 28, 2015 by jbsclasses (3,971 points)

For posting this journal entry in the ledger, first open all these accounts.  Then those accounts which have been debited in the journal should be debited with the narration 'To Balance b/f'.  All those accounts which are credited in the journal account should be credited with the narration 'By Balance b/f'

                                                                               Cash A/c

Date

Particulars

Amount

Date

Particulars

Amount

1/4/2011

To balance b/f

10000

 

 

 

                                                                               Overdraft A/c

Date

Particulars

Amount

Date

Particulars

Amount

 

 

 

1/4/2011

By Balance b/f

26000

All other accounts will also be posted like this

...