Meaning of ledger entries:

Ledger entries can be defined as detailed records of financial transactions in a company's ledger.

1. Date: The date on which the transaction occurred.


2. Particulars: A brief description of the transaction or the name of the account being affected.


3. Folio: A reference number or page in the journal or subsidiary ledger where the transaction is recorded.


4. Debit (₦): The amount recorded on the debit side of the ledger, representing an increase in assets or expense accounts.


5. Credit (₦): The amount recorded on the credit side of the ledger, representing an increase in liabilities, income, or a decrease in assets.


6. Balance (₦): The running total of the account after each transaction, showing the current amount available in the account.

Example :

Date	Particulars	Folio	Amount (Debit)	Amount (Credit)
024-09-01	Opening Balance		10,000
2024-09-05	Cash Sales	001	5,000
2024-09-10	Purchase of Supplies	002		1,200
2024-09-15	Bank Deposit	003	2,000
2024-09-20	Payment for Utilities	004		800
2024-09-30	Closing Balance			15,000

Opening Balance

Date	Particulars	Debit	Credit
2024-09-01	Cash	5,000
2024-09-01	Opening Balance		5,000

Sales Revenue

Date	Particulars	Debit	Credit
2024-09-03	Cash	2,000
2024-09-03	Sales Revenue		2,000

Payment to Supplier

Date	Particulars	Debit	Credit
2024-09-07	Accounts Payable	1,500
2024-09-07	Cash		1,500

Bank Deposit

Date	Particulars	Debit	Credit
2024-09-10	Cash	1,000
2024-09-10	Bank		1,000

Office Supplies Purchase

Date	Particulars	Debit	Credit
2024-09-15	Office Supplies	300
2024-09-15	Cash		300

Cash Withdrawal

Date	Particulars	Debit	Credit
2024-09-20	Cash		500
2024-09-20	Bank	500

Closing Balance

Date	Particulars	Debit	Credit
2024-09-30	Closing Balance		5,700
2024-09-30	Cash	5,700

HOW TO RECORD CASH RECEIVED

1. Determine where the cash is coming from, such as sales or receivables. Example: Cash received from a sale of goods.


2. Set up the entry in your accounting journal. Example: "Cash received entry" in the journal for today’s transactions.


3. Record the date of the transaction. Example: Date: 15th September 2024.


4. Debit the Cash Account to increase the cash balance. Example: Debit: Cash Account with ₦100,000.


5. Credit the appropriate account based on the cash source. Example: Credit: Sales Revenue Account with ₦100,000.


6. Add a brief explanation of the transaction. Example: Description: "Cash received from sales of electronic items."


7. Ensure debits and credits are equal. Example: Check: Debit (₦100,000) equals Credit (₦100,000).


8. Update the relevant ledger accounts. Example: Post to the Cash and Sales Revenue ledgers.

HOW TO RECORD CASH PAYMENT

1. Determine what the cash payment is for, such as expenses, purchases, or liabilities. Example: Payment for office rent.


2. Begin by setting up the entry in your accounting journal. Example: "Cash payment entry" in the journal for today's date.


3. Record the date of the transaction accurately. Example: Date: 15th September 2024.


4. Credit the Cash Account to reflect the decrease in cash. Example: Credit: Cash Account with ₦50,000.


5. Debit the appropriate account related to the payment, such as an expense or liability account. Example: Debit: Rent Expense Account with ₦50,000.


6. Provide a brief explanation of the payment. Example: Description: "Payment for office rent for September."


7. Ensure that debits and credits are equal. Example: Check: Debit (₦50,000) equals Credit (₦50,000).


8. Update the relevant ledger accounts to reflect the transaction. Example: Post to the Cash and Rent Expense ledgers.

Discount-related accounting involves recording and managing discounts provided to customers (discount allowed) and discounts received from suppliers (discount received).

1. Discount Allowed

Discount allowed can be defined as a reduction in the amount a business receives from customers who pay their bills early or as part of a special offer. Example: A customer pays ₦1,000 but is given a 10% discount. You record: Debit: Discount Allowed ₦100 Credit: Cash Account ₦900

2. Discount Received

Discount received can be defined as a reduction in the amount a business needs to pay to suppliers, usually for paying invoices early. Example: You owe a supplier ₦5,000 and receive a 5% discount for early payment. You record: Debit: Accounts Payable ₦250 Credit: Discount Received ₦250