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Problems With Accounts Only in Single Ledger

The document discusses accounting problems that arise when using a single ledger system. It provides examples of businesses run by Sriram, Srinivas, and Laxman that track various financial transactions such as purchases, sales, expenses, and income in individual ledger accounts. For each business, the gross profit, net profit, and balance sheet are calculated. The key issue identified is that a single ledger system makes it difficult to generate meaningful financial reports and analyze business performance over time.

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mahendra nath
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240 views

Problems With Accounts Only in Single Ledger

The document discusses accounting problems that arise when using a single ledger system. It provides examples of businesses run by Sriram, Srinivas, and Laxman that track various financial transactions such as purchases, sales, expenses, and income in individual ledger accounts. For each business, the gross profit, net profit, and balance sheet are calculated. The key issue identified is that a single ledger system makes it difficult to generate meaningful financial reports and analyze business performance over time.

Uploaded by

mahendra nath
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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ACCOUNTS ONLY (SINGLE LEDGER)

Problems with accounts only in Single Ledger

 Sriram started a business with cash 1,00,000/- .

 Purchase Furniture 45,000/- .

 Purchase Raw material 50,000/- .

 Sold Raw material 60,000/- .

 Paid salaries 5,000/- .

 Paid rent 2,000/- .

S.No. Ledger name Group Name Amount


1 Sri Ram Capital Account 1,00,000
2 Furniture Fixed Assets 45,000
3 Purchase R/M Purchase Account 50,000
4 Sold R/M Sales Account 60,000
5 Salaries Indirect Expences 5,000
6 Rent “ “ “ 2,000

Reports:-

 Gross Profit = Sales-Purchase-Direct Expences + Closing stock + Direct Income

=60,000-50,000-0+0+0 = 10,000/- .

 Net Profit = gross Profit-Indirect Expences + Indirect Income

=10,000-(5,000+2,000)+0 =3,000/-

 Balance Sheet = Net Profit + Capital Account

=3,000 + 1,00,000 = 1,03,000/-

 Srinivas Started a business with cash 3,00,000/- .

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 Purchase Plants & Machinery 1,00,000/- .

 Purchase Goods 80, 000/- .

 Sold Goods 1,60,000/- .

 Paid salaries 10,000/- .

 Carriage in words 1,000/- .

 Carriage on sales 2,000/-

 Rent received 2,000/-

 Printing & Stationery 1,000/-

 Electrical Charges 1,000/-

 Telephone Bill 1,000/-

 Adds Charges 1,500/-

S.No. Ledger name Group Name Amount


1 Srinivas Capital Account 3,00,000
2 Plants & Machinery Fixed Assets 1,00,000
3 Purchase Goods Purchase Account 80,000
4 Sold Goods Sales Account 1,60,000
5 Salaries Indirect Expences 10,000
6 Carriage in words Direct Expences 1,000
7 Carriage on Sales Indirect Expences 2,000
8 Rent received Indirect Income 2,000
9 Printing & Stationery Indirect Expences 1,000
10 Electrical Charges “ “ “ 1,000
11 Telephone Bill “ “ “ 1,000
12 Adds Charges “ “ “ 1,500

Gross Profit = 1,60,000+80,000-1,000+0+0= 79,000/-

Nett Profit = 79,000-16,500+2,000= 64,500/-

Balance Sheet =64,500 + 3,00,000= 3,64,500/- .


Accounts only in Multiple Ledger
 Laxman Started a Business 5,00,000/-

 Purchase furniture 50,000/-

 Purchase computer 30,000/-

 Purchase raw material 1,50,000/-

 Sold raw material 2,50,000/-

 Paid rent 3,000/-

 Telephone bill 1,000/-

 Carriage on sales 2,000/-

 Carriage in words 1,000/-

 Bad debitors 1,000/-

S.No. Ledger name Group name Amount


1 Laxman & co Capital account 5,00,000/-
2 Furniture Fixed assets 50,000/-
3 Computer “ “ “ 30,000/-
4 Purchase raw material Purchase account 1,50,000/-
5 Sold raw material Sales account 2,50,000/-
6 Rent Indirect expenses 3,000/-
7 Telephone bill “ “ “ 1,000/-
8 Carriage on sales “ “ “ 2,000/-
9 Bad debtors “ “ “ 1,000/-
10 Carriage in words Direct expenses 1,000/-

Gross Profit =(2,50,000 -1,50,000) -1000 =1,00,000-1,000=99,000/-

Net Profit = 99,000-{3,000+1,000+2,000+1,000)=92,000/-

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Balance Sheet = 92,000 + 5,00,000 =5,92,000/-

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