{m}.{s}.1In practice, you may not often find ledger accounts in the double sided format we have used. It is however very useful as a means of learning debits and credits.

As we have seen though, the balance in an account at any time is not readily obvious.

Ledger accounts will therefore often be kept in a 3 column format. For example (right), here the left-hand column (instead of the left-hand side of the page) shows debits. The middle column (i.e. the column to the right of the debits) shows credits. The extra column to the right shows the balance.

Thus, as each transaction line is entered, the balance is calculated. This is extremely useful in practice, especially when we want to extract balances frequently throughout the year, not just at year-end.

{m}.{s}.2Note that we have entered Dr after the balance figure to indicate a debit balance and Cr to indicate a credit balance. Variations of this form of account are often seen. Credits can be indicated:

  • By putting the figure in brackets
  • By the use of a minus sign

In a less common system the debit and credit columns may be combined, credit entries being indicated by brackets or minus signs. This is not very clear and should therefore be avoided.

 

Bank
2009   Dr Cr Bal
Apr 1 Capital 2,000   2,000 Dr
15 Purchases   2,200 200Cr
20 Sales 1,450   1,250 Dr
25 Rent   1,000 250 Dr
         
[{m}.{s}a]