Question

In self balancing , Bought Ledger Adjustment Account is opened in

• A. Bought Ledger
• B. General Ledger
• C. Sold Ledger
• D. None of these

Answer 1

Answer:

B. General Ledger

Self-balancing system :

• It is a system whereby separate Trial Balance can be taken out from
  each ledger.
• Under this system ledgers are made self-balancing by
  opening adjustment accounts
• The first step is that the ledger should be spilt up into certain number of ledgers as shown under:

     1. Debtors Ledger: It is also known as Nominal ledger. This ledger should contain the accounts only         trade debtors (customers).

     2. Creditors Ledger: This ledger should contain the accounts only trade creditors
        (suppliers),it also called as sales ledger, sold ledger or customer ledger

     3. General Ledger: This ledger should contain all the remaining accounts i.e other than
        trade debtors and trade creditors. It is also called as purchases ledger, bought ledger or supplier ledger

• The second step is that in each of the above ledgers the extra adjustment account or accounts
  should be opened as mentioned below:

        1. General Ledger Adjustment account: This extra account should be opened in the
           “Debtors ledger” in addition to the usual accounts of all the debtors.

        2. General Ledger Adjustment account: This extra account should be opened in the
           “Creditors ledger” in addition to the usual accounts of all the debtors.

       3. Debtors Ledger Adjustment account: This extra account should be opened in the
         “General ledger” in addition to the usual other accounts.

       4. Creditors Ledger Adjustment account: This extra account should be opened in the
          “General ledger” in addition to the usual other accounts.