From Journal to Ledger
The ledger is the principal book of accounts. While the journal records transactions date-wise, the ledger groups them account-wise so you can see, for example, every movement in the Cash account and its closing balance. Posting means transferring each journal line to the debit or credit side of the relevant ledger account.
Format of a ledger account (T-account)
Each account has two sides. The left (debit) side lists entries starting with "To …" and the right (credit) side lists entries starting with "By …". The particulars column names the other account of the same journal entry. At the end of the period the difference between the two sides is written as Balance c/d on the smaller side so both totals agree; it is carried forward as Balance b/d.
How this tool works
Enter journal lines (date, account, Dr/Cr, amount, narration) or load them with one click from the Journal Entry Maker. The tool automatically:
- creates a T-account for every distinct account name,
- finds the contra account of each line (same date and narration) for the particulars column,
- computes the closing balance and marks it Dr or Cr,
- builds a trial balance from all ledger balances,
- exports an Excel workbook with one sheet per account plus a Trial Balance sheet.
Worked example
Capital introduced ₹1,00,000 in cash; cash purchases ₹40,000; cash sales ₹55,000; rent paid ₹8,000. The Cash A/c ledger will show on the debit side: To Capital 1,00,000 and To Sales 55,000 (total 1,55,000); on the credit side: By Purchases 40,000, By Rent 8,000 and By Balance c/d 1,07,000. Cash therefore has a debit balance of ₹1,07,000, which is the cash in hand.
Reading balances
Debit balances normally represent assets, expenses and drawings; credit balances represent liabilities, capital and incomes. A credit balance in Cash is impossible and signals an error in the entries.
Frequently Asked Questions
What does "To" and "By" mean in a ledger?
By convention, debit-side entries are prefixed "To" and credit-side entries "By", followed by the name of the contra account.
Why does the tool show a trial balance too?
Ledger balances feed directly into the trial balance; showing it confirms your postings are arithmetically correct.
Can I import from Excel?
Yes. Use a sheet with columns Date, Account, Dr/Cr, Amount, Narration and click Import CSV/Excel.
How is the contra account determined?
Lines sharing the same date and narration are treated as one journal entry; the opposite-side accounts become the particulars. Give each entry a distinct narration for best results.
Disclaimer: This tool is for general information and estimation only. Tax rates and rules change — verify with official sources or a professional before acting. Read full disclaimer.