Customer ledger cards

Customer ledger cards

Customer Ledger cards are not part of the Double-entry system. They are for memorandum purposes only. They allow you to know the total amount an individual customer owes you.

CUSTOMER LEDGER CARDS

A/c Code: JJM01 - JJ Manufacturing
Date	Details	Reference	Amount	Date	Details	Reference	Amount
2 July 2006	Sales invoice daybook	SI1	2500	20 July 2006	Bank receipts daybook	BR1	2500
29 July 2006	Sales invoice daybook	SI2	3200	31 July 2006	balance c/d		3200
			-------				-------
			5700				5700
			====				====
1 August 2006	Balance b/d		3200

General (nominal) ledger

GENERAL (NOMINAL) LEDGER

Sales parts
Date	Details	Reference	Amount	Date	Details	Reference	Amount
31 July 2006	Balance	c/d	2500	2 July 2006	Sales invoice daybook	SDB	2500
			-------				-------
			2500				2500
			====				====
				1 August 2006	Balance	b/d	2500
Sales service
Date	Details	Reference	Amount	Date	Details	Reference	Amount
31 May 2006	Balance	c/d	3200	29 July 2006	Sales invoice daybook	SDB	3200
			-------				-------
			3200				3200
			====				====
				1 June 2010	Balance	b/d	3200
Electricity
Date	Details	Reference	Amount	Date	Details	Reference	Amount
10 May 2010	Electricity Co.	PDB	1000	30 May 2010	Balance	c/d	1000
			-------				-------
			1000				1000
			====				====
1 June 2010	Balance	b/d	1000
Water
Date	Details	Reference	Amount	Date	Details	Reference	Amount
12 May 2010	water Co.	Pdb	1600	31 May 2010	Balance	c/d	1600
			-------				-------
			1600				1600
			====				====
1 August 2010	Balance	b/d	1600
Other a/c
Date	Details	Reference	Amount	Date	Details	Reference	Amount
28 July 2006	Owner's Wages	BPDB	400	31 July 2006	Balance	c/d	400
			-------				-------
			400				400
			====				====
1 August 2006	Balance	b/d	400
Bank Control A/c
Date	Details	Reference	Amount	Date	Details	Reference	Amount
31 July 2006	Bank receipts daybook	BRDB	2500	31 July 2006	Bank payments daybook	BPDB	2300
				31 July 2006	Balance	c/d	200
			-------				-------
			2500				2500
			====				====
1 August 2006	Balance	b/d	200
Trade Debtors Control A/c
Date	Details	Reference	Amount	Date	Details	Reference	Amount
1 July 2006	Balance	b/d	0	31 July 2006	Bank receipts daybook	BRDB	2500
31 July 2006	Sales Invoice Daybook	SDB	5700	31 July 2006	Balance	c/d	3200
			-------				-------
			5700				5700
			====				====
1 August 2006	Balance	b/d	3200
Trade Creditors Control A/c
Date	Details	Reference	Amount	Date	Details	Reference	Amount
31 July 2006	Bank Payments Daybook	BPDB	1900	1 July 2006	Balance	b/d	0
31 July 2006	Balance	c/d	700	31 July 2006	Purchase Daybook	PDB	2600
			-------				-------
			2600				2600
			====				====
				1 August 2006	Balance	b/d	700

The customers ledger cards shows the breakdown of how the trade debtors control a/c is made up. The trade debtors control a/c is the total of outstanding debtors and the customer ledger cards shows the amount due for each individual customer. The total of each individual customer account added together should equal the total in the trade debtors control a/c.
The supplier ledger cards shows the breakdown of how the trade creditors control a/c is made up. The trade creditors control a/c is the total of outstanding creditors and the suppliers ledger cards shows the amount due for each individual supplier. The total of each individual supplier account added together should equal the total in the trade creditors control a/c.
Each Bank a/c shows all the money in and out through a bank. If you have more than one bank account for your company you will have to maintain separate bank account ledger in order to complete bank reconciliation statements and be able to see how much is left in each account.

Bank account

Bank A/c
Date	Details	Reference	Amount	Date	Details	Reference	Amount
1 July 2006	Balance	b/d	0	17 July 2006	Bank Payments Daybook	BP701	1000
				28 July 2006	Bank Payments Daybook	BP703	400
				31 July 2006	Balance	c/d	200
			-------				-------
			2500				2300
			====				====
1 August 2006	Balance	b/d	200

[edit] Unadjusted trial balance

Trial balance as at 31 July 2006
	A/c description	Debit	Credit
	Sales-parts		2500
	Sales-service		3200
	Widgets	1600
	Electricity	1000
	Other	400
	Bank	200
	Trade Debtors Control A/c	3200
	Trade Creditors Control A/c		700
		-------	-------
		6400	6400
		=====	=====
Both sides must have the same overall total
Debits = Credits.

The individual customer accounts are not to be listed in the trial balance, as the Trade debtors control a/c is the summary of each individual customer a/c......
The individual supplier accounts are not to be listed in the trial balance, as the Trade creditors control a/c is the summary of each individual supplier a/c.
Important note: this example is designed to show double entry. There are methods of creating a trial balance that significantly reduce the time it takes to record entries in the general ledger and trial balance.

Profit-and-loss statement and balance sheet

Profit and loss statement

for the month ending 31 July 2006
		Dr
x	Sales
x	Sales-parts	2500
x	Sales-service	3200
x		-------
x		5700
x	Widgets	1600
x		-------
x	Gross Profit	4100
x	Less expenses
x	Electricity	1000
x	Other	400
x		-------
x		1400
x		-------
x	Net Profit	2700
x		====

Balance sheet

as at 31 July 2006
			Dr
x	Current Assets
x	Bank A/c		200
x	Trade Debtors		3200
x			-------
x			3400
x	Current Liabilities
x	Trade Creditors		700
x			-------
x			700
x			-------
x	Net Current Assets		2700
x			====
x	Capital & Reserves
x	Revenue Reserves a/c		2700
x			-------
x			2700
x			====

---

Double Entry Example 2

[edit] Transactions

XYZ Company is closing its books for the end of the month. Each of the daily journals has been summarized and the amounts are ready to be transferred to the general ledger. The amounts to be transferred are:

• Purchase raw materials on trade credit: 500,000
• Pay workers from cash in bank to make goods: 1,500,000
• Pay sales force from cash in bank to sell goods: 1,000,000
• Sell goods for cash: 3,500,000

To close the books for the month, we will adjust expenses and revenue to zero by appropriately crediting and debiting the income summary and then closing the income summary to retained earnings (part of equity).
These items are entered in the ledger below; each matching credit and debit have been numbered to make finding them in the ledger easier.

Ledgers

General Ledger (in 000s)

Transaction	Debit	Credit	Balance
Expenses
Balance forward			-
1 Raw materials	500		500
2 Labor	1500		2000
3 Sales costs	1000		3000
5 Income summary		3000	-
Total	3000	3000
Revenue
Balance forward			-
4 Revenue from sales		3500	3500
6 Income summary	3500		-
Total	3500	3500
Cash
Balance forward			11000
2 Labor		1500	9500
3 Sales costs		1000	8500
4 Revenue from sales	3500		12000
Total	3500	2500
Accounts Payable
Balance forward			1000
1 Raw materials		500	1500
Total	-	500
Income summary
Balance forward			-
5 Expense	3000		3000
6 Revenue		3500	500
7 Retained earnings	500		-
Total	3500	3500
Retained earnings
Balance forward			10000
7 Income summary		500	10500
Total	-	500
Total all accounts:	13500	13500

The amount in equity (in the form of retained earnings) has changed with a net credit of 500,000. Since equity has a normal balance of credit, this means there is now 500,000 more in equity than at the beginning of the month.