Ledger: ISC Class 11 Accounts Notes on Posting and Balancing

What Ledger is about

Weightage: Ledger belongs to the unit Journal, Ledger and Trial Balance, which CISCE weights at 12 of the 80 marks in the ISC Class XI Accountancy Paper I (Theory). Class XI is examined by the school, so your school sets the paper within this weightage.Source: CISCE ISC Accountancy syllabus, examination year 2028, Class XI unit weightage

Key concepts

Meaning and importance of the ledger

The ledger is a book (or computer file) containing all the accounts of a business, each on a separate page or folio. It is the principal book of accounts: the journal is the book of original entry, and the ledger is the book of final entry.

Utility:

• Shows the net position of each account: how much each debtor owes, each creditor is owed, the cash and bank balances, total sales and total wages.
• It is the basis of the trial balance and the final accounts.
• Gives quick information to the owner and to tax authorities.
• Helps detect errors through the trial balance.

The ledger has an index (alphabetical list of accounts with page numbers) so that any account can be found quickly. Large firms split the ledger into a debtors' (sales) ledger, a creditors' (purchases) ledger and a general ledger.

Worked example

Suppose a shop's journal has 400 entries for the year, 37 of which involve the customer Kapil. Why can the owner not easily find Kapil's balance from the journal, and how does the ledger help? [2 marks]

Try it first, then show the solutionSolution

1. The journal records entries in date order, so Kapil's 37 entries are scattered among 400 others.
2. In the ledger, all 37 are posted to one account, Kapil's A/c, whose balance at once shows how much he owes.

Answer: The journal is chronological, not account-wise; the ledger collects all of Kapil's transactions in one account, so his balance is seen directly.

Format of a ledger account

The traditional T-form has two equal halves: the left is the debit (Dr) side, the right the credit (Cr) side.

Dr — Cash Account — Cr

Date	Particulars	J.F.	Amount (₹)	Date	Particulars	J.F.	Amount (₹)
	To ...				By ...

• Date: of the transaction (year, month, day).
• Particulars: the name of the other account in the journal entry, with 'To' on the debit side and 'By' on the credit side.
• J.F. (journal folio): the page of the journal from which the entry was posted.
• Amount: as in the journal.

A running balance format (Date | Particulars | J.F. | Debit | Credit | Dr/Cr | Balance) shows the balance after every entry. It is used by banks and in computerised accounts.

Worked example

In which column and with which prefix will 'Rent paid ₹9,000 in cash' appear in (a) Rent A/c and (b) Cash A/c? [2 marks]

Try it first, then show the solutionSolution

1. Journal entry: Rent A/c Dr 9,000 To Cash A/c 9,000.
2. (a) Rent A/c is debited: on its debit side write 'To Cash A/c 9,000'.
3. (b) Cash A/c is credited: on its credit side write 'By Rent A/c 9,000'.

Answer: (a) Rent A/c, debit side: 'To Cash A/c ₹9,000'. (b) Cash A/c, credit side: 'By Rent A/c ₹9,000'.

Mechanics of posting

Posting is transferring each journal entry to the accounts concerned. For every entry:

1. Open (or locate) the account debited in the journal.
2. On its debit side, enter the date and write 'To' + the name of the account credited, with the amount.
3. Open the account credited.
4. On its credit side, enter the date and write 'By' + the name of the account debited, with the amount.
5. Write the ledger folio in the journal's L.F. column and the journal folio in the ledger's J.F. column, as a cross-reference and proof of posting.

For a compound entry, each debited account is posted with the name(s) of the credited account(s), and vice versa. If a debit has several credits, the credited accounts are named separately in the debited account (some books write 'Sundries' instead).

Posting an opening entry: each asset account starts with 'To Balance b/d' on its debit side and each liability and capital account with 'By Balance b/d' on its credit side.

Worked example

Post the compound entry: Mehta & Co. Dr ₹90,000; To Bank A/c ₹88,200; To Discount Received A/c ₹1,800. [2 marks]

Try it first, then show the solutionSolution

1. Mehta & Co. A/c, debit side: 'To Bank A/c 88,200' and 'To Discount Received A/c 1,800'.
2. Bank A/c, credit side: 'By Mehta & Co. 88,200'. Discount Received A/c, credit side: 'By Mehta & Co. 1,800'.

Answer: Mehta's account shows both credits on its debit side; Bank and Discount Received each show 'By Mehta & Co.' on the credit side.

Balancing ledger accounts

At the end of the period every account is balanced:

1. Total both sides separately (in pencil).
2. Find the difference: the balance.
3. Write the difference on the smaller side as 'To/By Balance c/d' (carried down), so both sides total the same.
4. Write the equal totals on the same line on both sides and rule them off.
5. Bring the balance down on the opposite side, dated the first day of the next period: 'To Balance b/d' (debit balance) or 'By Balance b/d' (credit balance).

A debit balance means the debit side was bigger: assets, expenses, debtors, drawings. A credit balance means the credit side was bigger: liabilities, capital, revenues, creditors. The Cash A/c can never have a credit balance; the Bank A/c can (overdraft).

Which accounts are balanced and which are closed?

• Personal and real accounts (assets, liabilities, capital) are balanced and carried down to the next year.
• Nominal accounts (expenses, losses, revenues, gains) are closed by transfer to the Trading A/c (direct items: purchases, wages, carriage inwards, sales) or the Profit and Loss A/c (indirect items: salaries, rent, advertisement, interest, discount).

Worked example

Suppose Neel's Cash A/c for May 2026 shows on the debit side: Balance b/d ₹40,000, Sales ₹25,000, Kapil ₹18,000, Commission ₹3,500; and on the credit side: Purchases ₹30,000, Wages ₹6,000, Rent ₹9,000, Drawings ₹4,000. Balance the account. [3 marks]

Try it first, then show the solutionSolution

1. Debit total = 40,000 + 25,000 + 18,000 + 3,500 = ₹86,500. Credit total = 30,000 + 6,000 + 9,000 + 4,000 = ₹49,000.
2. Balance = 86,500 − 49,000 = ₹37,500: write 'By Balance c/d 37,500' on the credit side; both totals ₹86,500.
3. On 1st June: 'To Balance b/d 37,500' on the debit side.

Answer: Debit balance of ₹37,500 (cash in hand), carried down on 31st May and brought down on 1st June.

Closing entries: transfer to Trading and Profit and Loss Account

Closing entries close nominal accounts at the year-end by transferring them to the Trading or Profit and Loss Account.

Purpose	Entry
Direct expenses and opening stock	Trading A/c Dr; To Opening Stock, Purchases, Wages, Carriage Inwards, Freight, Power and Fuel A/c
Sales and purchases returns	Sales A/c Dr; To Sales Returns A/c. Purchases Returns A/c Dr; To Purchases A/c (or deduct returns in the Trading A/c)
Sales to Trading	Sales A/c Dr; To Trading A/c
Gross profit	Trading A/c Dr; To Profit and Loss A/c (gross loss: the reverse)
Indirect expenses and losses	Profit and Loss A/c Dr; To Salaries, Rent, Advertisement, Carriage Outwards, Bad Debts, Discount Allowed, Depreciation A/c
Indirect incomes and gains	Interest Received, Discount Received, Commission Received A/c Dr; To Profit and Loss A/c
Net profit	Profit and Loss A/c Dr; To Capital A/c (net loss: the reverse)
Drawings	Capital A/c Dr; To Drawings A/c

Direct items relate to buying or making the goods (in the Trading A/c); indirect items relate to running, selling and financing the business (in the Profit and Loss A/c).

Worked example

Pass the closing entries for: Wages ₹28,000; Salaries ₹42,000; Interest Received ₹6,000. [3 marks]

Try it first, then show the solutionSolution

1. Wages are direct: Trading A/c Dr 28,000 To Wages A/c 28,000.
2. Salaries are indirect: Profit and Loss A/c Dr 42,000 To Salaries A/c 42,000.
3. Interest received is an indirect income: Interest Received A/c Dr 6,000 To Profit and Loss A/c 6,000.

Answer: Three closing entries as shown; wages to Trading, salaries and interest to Profit and Loss.

Adjusting entries

Adjusting entries are passed at the year-end so that each period carries exactly its own revenues and expenses (accrual and matching). The common ones:

Adjustment	Entry
Closing stock	Closing Stock A/c Dr; To Trading A/c
Outstanding expense	Expense A/c Dr; To Outstanding Expense A/c
Prepaid expense	Prepaid Expense A/c Dr; To Expense A/c
Accrued income	Accrued Income A/c Dr; To Income A/c
Income received in advance	Income A/c Dr; To Income Received in Advance A/c
Depreciation	Depreciation A/c Dr; To Asset A/c
Interest on capital	Interest on Capital A/c Dr; To Capital A/c
Interest on drawings	Capital A/c Dr; To Interest on Drawings A/c
Bad debts written off	Bad Debts A/c Dr; To Debtor's A/c

After adjusting, the expense or income account is closed to the Trading or Profit and Loss A/c at its adjusted amount, and the new asset or liability (outstanding, prepaid, accrued, advance) is carried down.

Worked example

Suppose rent paid during 2025-26 was ₹22,000 for 11 months; the March 2026 rent of ₹2,000 is unpaid. Pass the adjusting and closing entries and find the rent charged. [3 marks]

Try it first, then show the solutionSolution

1. Adjusting: Rent A/c Dr 2,000 To Outstanding Rent A/c 2,000.
2. Rent for the year = 22,000 + 2,000 = ₹24,000.
3. Closing: Profit and Loss A/c Dr 24,000 To Rent A/c 24,000. Outstanding Rent A/c (credit ₹2,000) is carried down as a liability.

Answer: Rent charged ₹24,000; outstanding rent ₹2,000 shown as a liability.

Ledger in real life

Each concept, met in an everyday situation. Read the situation, answer the question in your own words, then compare with the model answer. The one-line hook is what to remember.

Topics in this chapter

• Closing and Adjusting Entries: Transfer to Trading and Profit and Loss Account
• Ledger: Format, Posting from the Journal and Balancing

Ledger: key facts

Balance of an account

Balance = Larger side total − Smaller side total (written on the smaller side as Balance c/d)

Debtor's closing balance

Opening balance + Credit sales − Cash/cheques received − Returns − Discount allowed − Bad debts

A debit balance.

Gross profit (Trading A/c)

Gross profit = (Sales − Sales returns) + Closing stock − Opening stock − (Purchases − Purchases returns) − Direct expenses

Net profit (Profit and Loss A/c)

Net profit = Gross profit + Indirect incomes − Indirect expenses and losses

Ledger: diagrams to practise

Practise each one on paper: draw it from the checklist, then tick off every label.

How the school exam asks Ledger

The question patterns to expect, and the method that works for each.

Tricks to remember Ledger

Short memory aids. Say each one aloud once, then use it on a question the same day.

• 'To' on the left, 'By' on the right

  T comes before B in the word 'TaBle': To on the left (debit), By on the right (credit).

  Use it when: Posting.

• Carry down where it is smaller

  The balance c/d always sits on the smaller side; b/d appears on the bigger side next period.

  Use it when: Balancing.

• Own or owe carries on; spend or earn closes

  Assets, liabilities and capital are carried down; expenses and incomes are closed to Trading or P&L.

  Use it when: Year-end treatment.

Ledger: exam-level solved questions

Ordered from exam level to HOTS. Cover the solution, write your own, then compare step by step.

Case-study practice (Section A style)

Read the situation, then answer every part. In a school exam set on the board pattern this is a 7-mark question split into 2 + 2 + 2 + 1 marks.

Where the marks are

How a typical answer is split into step marks. Show every step: a right final answer alone rarely earns full marks.

Where students lose marks in Ledger

The slips examiners see most often, and what to write instead.

• ✗Mistake: Writing the account's own name in its particulars

  The particulars column shows the other account of the journal entry, so a reader can trace where the amount came from.

  Wrong working

  In Cash A/c (debit side): 'To Cash 25,000'.

  Right working

  In Cash A/c (debit side): 'To Sales A/c 25,000'.

  ✓Do this: In the debited account, write the credited account; in the credited account, write the debited account.

  Usually costs: ½-1 mark per account.

• ✗Mistake: Posting the full debt instead of the cheque amount to Bank

  In a settlement, only the amount actually paid passes through the bank; the discount goes to the discount account.

  ✓Do this: Bank: cheque amount; personal account: full debt; discount account: the difference.

  Usually costs: 1 mark and the bank balance.

• ✗Mistake: Carrying down the balance of an expense account

  Nominal accounts are closed to Trading or P&L; only assets, liabilities and capital are carried down.

  ✓Do this: Ask: does this item still exist on 1st April? If not, close it.

  Usually costs: 1 mark.

• ✗Mistake: Totals on different lines

  Unequal-line totals make the account look unbalanced and are not accepted as a properly balanced account.

  ✓Do this: Write both totals on the same line, then bring the balance down below.

  Usually costs: ½ mark.

• ✗Mistake: Putting carriage outwards or salaries in the Trading A/c

  They are selling and administrative costs (indirect), so they go to the Profit and Loss A/c.

  ✓Do this: Direct = buying or making goods; indirect = selling, office, finance.

  Usually costs: 1 mark and both profit figures.

Practice questions on Ledger

Write each answer on paper first. Open the hint only if you are stuck, and the answer only when you have finished.

1. Q1 · 1 mark · MCQExam level

   The ledger is also called the:
   (a) book of original entry
   (b) principal book
   (c) subsidiary book
   (d) day book

   Hint

   Book of final entry.

   Answer

   (b) principal book.

2. Q2 · 2 marks · Short answerExam level

   What do 'Balance c/d' and 'Balance b/d' mean?

   Hint

   Carried down, brought down.

   Answer

   Balance c/d (carried down) is the balancing figure written on the smaller side at the end of a period. Balance b/d (brought down) is the same amount written on the opposite side at the start of the next period.

3. Q3 · 3 marks · Short answerExam level

   Distinguish between journal and ledger on three bases.

   Hint

   Order, entry, purpose.

   Answer

   Nature: journal is the book of original entry; ledger is the principal book (final entry). Order: journal records date-wise; ledger records account-wise. Purpose: journal shows each transaction's two aspects; ledger shows the net balance of each account, from which the trial balance is prepared.

4. Q4 · 2 marks · Short answerHarder exam level

   Suppose the Bank A/c shows debits of ₹2,35,000 and credits of ₹2,61,500 for a year with no opening balance. Balance it and state what the balance means.

   Hint

   Which side is larger?

   Answer

   Credit side larger by ₹26,500: 'To Balance c/d 26,500' on the debit side and 'By Balance b/d 26,500' next period. It is a bank overdraft, a current liability.

5. Q5 · 3 marks · Short answerHarder exam level

   Suppose salaries paid in 2025-26 were ₹1,32,000 and salary for March 2026 of ₹12,000 is outstanding. Prepare the Salaries A/c with adjusting and closing entries.

   Hint

   Debit side gets cash and outstanding.

   Answer

   Dr: To Bank/Cash 1,32,000; To Outstanding Salaries 12,000 = 1,44,000. Cr: By Profit and Loss A/c 1,44,000. Adjusting entry: Salaries Dr 12,000 To Outstanding Salaries 12,000; closing: P&L Dr 1,44,000 To Salaries 1,44,000.

6. Q6 · 3 marks · Short answerHarder exam level

   Classify as direct or indirect and state where each is closed: freight on purchases, advertisement, power used in the factory, depreciation of office furniture, carriage outwards, import duty on goods.

   Hint

   Bringing goods in vs selling and administration.

   Answer

   Direct (Trading A/c): freight on purchases, factory power, import duty on goods. Indirect (Profit and Loss A/c): advertisement, depreciation of office furniture, carriage outwards.

7. Q7 · 3 marks · Short answerHarder exam level

   Suppose a machine account shows: 1st April 2025 balance ₹2,40,000; purchase of a new machine on 1st October 2025 ₹1,00,000; depreciation for the year ₹29,000. Prepare the Machinery A/c.

   Hint

   Depreciation on the credit side.

   Answer

   Dr: To Balance b/d 2,40,000; To Bank 1,00,000 = 3,40,000. Cr: By Depreciation 29,000; By Balance c/d 3,11,000. Balance b/d on 1st April 2026 ₹3,11,000.

8. Q8 · 3 marks · Short answerHOTS / competency

   Suppose a trainee closed all accounts, including Debtors, Machinery and Capital, to the Profit and Loss A/c. Explain two consequences.

   Hint

   What should carry forward?

   Answer

   Profit would be badly misstated, since assets (debtors, machinery) would be charged as expenses and capital credited as income. The new year would open without balances for assets, liabilities and capital, so the balance sheet could not be prepared and the trial balance of the next year would be wrong.

9. Q9 · 2 marks · Short answerHOTS / competency

   Suppose a Cash A/c for a month shows a credit balance of ₹4,500. What does this tell you, and what should be checked?

   Hint

   Can you pay out more cash than you have?

   Answer

   Cash cannot have a credit balance: payments cannot exceed cash available. There is an error: a receipt omitted, a payment posted twice or on the wrong side, or a bank payment posted to cash. Check postings and totals.

10. Q10 · 2 marks · Short answerHarder exam level

    Suppose total sales for a year were ₹6,40,000 including ₹18,000 sale of an old typewriter. What correction is needed before Sales A/c is closed, and what is the amount transferred to Trading A/c?

    Hint

    Sale of an asset is not sales.

    Answer

    Sales A/c Dr 18,000 To Typewriter (Office Equipment) A/c 18,000; the amount transferred to Trading A/c is 6,40,000 − 18,000 = ₹6,22,000.

Test your recall

Answer in your head or on paper first, then open the card. Pulling an answer out of memory makes it stick far better than re-reading.

1. 1.Which side starts with 'To'?Show answer

   The debit side.

2. 2.Where is Balance c/d written?Show answer

   On the smaller side.

3. 3.Which accounts are closed, not carried down?Show answer

   Nominal accounts (expenses, losses, incomes, gains).

4. 4.Wages: Trading or P&L?Show answer

   Trading (direct expense).

5. 5.Closing entry for net profit?Show answer

   Profit and Loss A/c Dr To Capital A/c.

6. 6.Can the Cash A/c have a credit balance?Show answer

   No.

Quick revision checklist

The night before the exam: can you do each of these without looking?

• ☐Ledger = principal book; journal = book of original entry.
• ☐Debit side 'To' + other account; credit side 'By' + other account.
• ☐J.F. in ledger, L.F. in journal: cross-references.
• ☐Balance c/d on the smaller side; Balance b/d on the opposite side next period.
• ☐Assets, liabilities, capital carried down; nominal accounts closed.
• ☐Direct items → Trading A/c; indirect → P&L A/c.
• ☐Gross profit: Trading Dr To P&L; net profit: P&L Dr To Capital.
• ☐Cash: never credit balance; Bank: credit balance = overdraft.

Ledger: frequently asked questions