To better understand for transfer of one ledger to another ledger. Let’s find an example.
Sometimes, perform/format some goods 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.
In this situation, a contra entry is working in accounting systems for entry transfer from one ledger to another ledger.
Transfer From One Ledger to Another Ledger
However, the Settlement of such a person’s Account will be made by deducting the balanced office one Account having a small amount from the other having a greater amount.
Thus, for this purpose transfer entry is made in the Journal this transfer will affect the total debtor’s account and the total creditor’s 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 the sales ledger to the purchase ledger or the credit balance is transferred from the purchase ledger to the sales ledger.
Thus, the transfer entry to be passed will be the same if the credit balance is transferred from the sales ledger to the purchase ledger or the Debit balance is transferred from the purchase ledger to the 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) |
Now you can understand how e can transfer from one ledger to another ledger in accounting systems.
