Page 116 - Book-keeping for Secondary Schools Student’s Book Form One

Book-Keeping for Secondary Schools

Summary

A ledger is a fundamental component of the double entry accounting system. It is
used in maintaining a detailed and organised record of all financial transactions for
a business. It serves as a central repository where individual accounts are maintained,
summarising the impact of each transaction on specific assets, liabilities, equity,
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revenues, and expenses. The ledger ensures accuracy and completeness by recording
both the debit and credit entries for every transaction, allowing for easy tracking
and analysis of the enterprise's financial position and performance. Ledgers can be
maintained manually in physical books or electronically through computer software,
providing a comprehensive and up-to-date view of an enterprise's financial activities.

In the ledger, each account is represented in a T-shaped format, with debits on the left
hand side and credits on the right. The ledger acts as a detailed reference in organising
financial data into specific accounts. It makes it easier for accountants and financial
analysts to prepare financial statements and conduct audits. Through the ledger,
businesses can monitor the flow of funds, track revenue and expenses, identify patterns or
irregularities, and ensure compliance with accounting standards. The ledger's accuracy
and reliability are paramount in providing stakeholders with a clear understanding of
the enterprise's financial health and aiding in making informed decisions to drive the
business's success.

Revision exercise 5

1. Write up a sales returns day book and show the total sales returns for the month

of June 2023 and post the entries to respective subsidiary and general ledger
accounts.

June 1 Received goods from Mzizima store:

20 boxes of coloured chalks @ TZS 15,000
10 boxes of counter books @ TZS 20,000
Wrong specifications

10 Received goods from Mzinga shop:

20 cartons of water @ TZS 6,000
25 boxes of biscuits @ TZS 5,000
Expired

25 Received goods from Mzalendo store

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Student’s Book Form One

Book Keeping Form 1 New 2024 FINAL.indd 108 18/10/2024 10:14