Journal → Ledger → Trial Balance
The accounting process flow.
Step 1: Journal (Book of Original Entry)
Record ALL transactions chronologically with date, description, debit/credit.
Example:
01-Jan: Cash Dr. 1,00,000
To Capital Cr. 1,00,000
(Owner invested capital)
Step 2: Ledger (Book of Accounts)
Post from journal to individual account pages.
Cash Ledger: Dr. Side: ₹1,00,000 (from capital) Cr. Side: (payments when made)
Capital Ledger: Cr. Side: ₹1,00,000
Each account shows all transactions affecting it.
Step 3: Trial Balance
List ALL ledger balances
| Account | Debit | Credit |
|---|---|---|
| Cash | 80,000 | |
| Inventory | 50,000 | |
| Capital | 1,00,000 | |
| Sales | 50,000 | |
| Expenses | 20,000 | |
| Total | 1,50,000 | 1,50,000 |
If balanced → Proceed to final accounts!
✅ Checkpoint
Trial balance MUST balance. If not, find error before moving forward.
Quiz
Test Your Knowledge
Test Your Knowledge
Question 1 of 1
1. What is the main concept covered in this lesson?
Key Takeaway: Understanding Journal → Ledger → Trial Balance is essential for making informed financial decisions.