Tutorial - How you can Make a Common Ledger

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Tutorial - How you can Make a Common Ledger - Part 2

In this article we continue with the following instance, which will help answering the question how you can make a common ledger. So the first step was to create a list of the company accounts which will be employed for the accounting reasons.

Subsequent we post the below transactions in to the appropriate ledger company accounts, debiting or crediting the related sides of the company accounts in order to reflect increase or decrease in assets, liabilities or equity, with respect to the character of transaction.

List of transactions and publishing towards the company accounts:

1. Investors invested publishing gear priced at Dollar4000 and cash amounting to Dollar1500 in to the business

Deb_________Equipment_________D

4000_________________________

Deb_______Cash______________D_

1500_________________________

Deb________Reveal Funds________D

__________________________5500

2. Inventory to provide publishing services fro Dollar400 was acquired on credit

Deb___________Inventory__________D

400____________________________

Deb_______Accounts Payable________D

___________________________400

3. Within the very first month the company supplied publishing services for Dollar560 and also got money for these services

Deb__________________Cash__________D

560_______________________________

Deb_______________Revenue__________D

______________________________560

4. Inventory cost of that is Dollar100 was used to provide those services

Deb______Costs_________D

100______________________

Deb_______Inventory________D

______________________100

So that all the transactions were published in to the common ledger. In case there are no transactions for the certain accounting period, the next phase to completing the ledger would be outlining the company accounts and calculating the closing balances.

While outlining the company accounts it's important to remember that:

Asset category company accounts may have money balances
Equity and liability company accounts may have credit balances
Revenue and expenses company accounts may have correspondingly credit and money balances, however, these company accounts will be closed following the test stability is ready and then accounting period begins

Amounts of the company accounts will be used to put together test stability, however this can be done only following the period-finish adjusting entries were documented and published in to the company accounts properly.

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