Hi i have recently started my course and am getting very confused to when filling out the main ledger on a subsidory account for eg a sales day book why teh sales ledger control account is the opposite....
I am finding it hard to understand the difference
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Best advice I was given, try not to understand it too much, else you'll get confused. So long as you remember the SLCA as your assets and your PLCA as your liabilities, it will help you with your double entry, and will help you make sure the VAT is on the right side of the T account!
As I say, this is how I remember it, other members may completely disagree, in which case I need to revise more before my next exam
Day books, and the customer/sales ledger are separate. They carry the detail, whereas the SLCA is a summary, or an overall view. Each individual sale will be posted here, and then a total for the day/week/month carried over to the SLCA. Therefore, the balances on the day books and sales ledger at any time should match the balance on the SLCA in the main ledger.
That's because your bank statement is written by the bank, from their point of view. It's a credit, a liability, because they owe you money.
When you're overdrawn, your account is in debit. You owe them money, so they have an asset there.
As you say, smile nod and agree and eventually it will sink in!
Hey guys im totally still getting very confused with certain ledgers... Ive been looking at past papers where they ask you for example say what accounts you bring down in your main ledger yet purchases is on credit and the purchase ledger control acount is the opposite can you explain why
and Credit entries coming [size=+1] out[/size] of an account
When your supplier sells you something (on credit)
It comes [size=+1] out[/size] of the supplier's account within the purchase ledger credit
and goes [size=+1] in[/size] to the purchases account debit
When your customer buys something from you (on credit)
It comes [size=+1] out[/size] of your sales account credit
and goes [size=+1] in[/size] to the customer's account within the sales ledger debit
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The entries to the debit side of the purchase control will be payments, credits and discounts received.
Perhaps it would help if you can refer to which past paper you are looking at
I'm confused to be honest..
the answer is correct.
Is your question referring to the labelling within the T-accounts or the bal c/d?
If its the bal c/d then its just the balancing figure you use to balance the accounts with at the end of the period.
If its the labelling then thats just how double entry works - you debit the purchases T - account (which is the main heading) with the purchases in the period - and within that account for that entry you enter in the "details" part the corresponding T account where the figure associates with
But to answer the question your asking, i think that the exam is wrong...lol unless anyone else can think of a reason that the Purchase Ledger Control account would have a debit balance?
day books:
SALES credit
VAT credit
SDB debit
PURCHASES debit
VAT debit
PDB credit
Trial Balance
PALED AND CLIPS
DEBIT CREDIT
P purchase C capital
A assets L liabilities
L losses I income
E expenses P profit
D drawings S sales
If you can remember these your debits and credits will be easy
remember sales returns and purchase returns are the opposite
nic x studying level 4 xx
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Seems you are doing such an excellent work here and It's really great, Thanks for all your posts. However I'm also struggling with the general ledger. Can you please help with the process of transfering from sales day book to the general ledger and then to the subsidiary sales ledger. Thank you.
Purchases 1000 on credit
Sale tax 17.5 %