Ledger Transformation:
Sometimes Perform/Format some good from a person and sells Other goods to him. the same person is, therefore, a creditor as well as a debtor of the firm and show his name will appear in the sales ledger as well as in Purchase/bought ledger. (Transfer from One Ledger to Another Ledger)
However, Settlement of such person Account will be made by deducting the balance office one Account having the small amount of the other having greater amount.
Read more:
- Sectional and Self-balancing ledgers: Meaning, Format, and Notes.
- Capital payments And Revenue payments with Examples.
Thus, for this purpose transfer entry is made in the Journal this transfer will affect the total debtors account and total creditors account.
The following Journal Entry will be passed for this purpose:
Personal account (in total creditors account) Dr.
To Personal account (in Total debtors account)
it is to be remembered that if the Debit balance is transferred from sales ledger to purchase ledger or credit balance is transferred from purchase ledger to sales ledger. you can also check out Types of Financial Statements.
Thus, the transfer entry to be passed will be same but if the credit balance is transferred from sales ledger to purchase ledger or Debit balance is transferred from purchase ledger to Sales Ledger.
The following Journal Entry will be passed for this purpose:
Personal account (in total debtors account) Dr.
To Personal account (in Total Creditors account)
Read more:
- Sectional Balancing System: Explanation with Examples and Advantages.
- Relationship and Differences between Bookkeeping and Accounting.
- Sectional Balancing System Practical Examples.
- Self Balancing Ledger System: A Complete Step-by-Step Guide
You Are Here Transfer from One Ledger to Another Ledger now you learned about this topic.
Thus, Learn more about Accounting study Notes Here.
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