Basics of Accounting: Journals, Ledgers & Trial Balance

Understanding the fundamentals of accounting and the basics of accounting is one of the most important parts of the Class 11 Commerce curriculum. Accounting not only develops analytical and financial reasoning skills but also lays the foundation for higher studies in Business, Finance, and Economics.

In this article, we’ll explain the basics of accounting for Class 11 students covering Journals, Ledgers, and the Trial Balance with clear definitions and simple examples.

What Is Accounting?

Accounting is often called the language of business. It is a systematic process of identifying, recording, classifying, and summarizing financial transactions to interpret business performance.

Every transaction is recorded carefully so that final statements like the Profit and Loss Account and the Balance Sheet show the true position of the business.

1. Journal: The Book of Original Entry

The Journal is the first step in the accounting process. It records financial transactions in chronological order as they occur.
Each journal entry follows the double-entry system of accounting, meaning every transaction has two aspects debit and credit.

Format of a Journal Entry

A journal entry generally includes:

Date of the transaction
Particulars (details of accounts involved)
Ledger Folio (L.F.)
Debit amount (₹)
Credit amount (₹)

Example

April 1, 2025: Cash worth ₹10,000 received from Ram.

Journal Entry:

Cash A/c Dr. ₹10,000
To Ram A/c ₹10,000
(Being cash received from Ram)

Here, the Cash Account is debited because cash is coming in, and Ram’s Account is credited because he is the giver.

2. Ledger: The Book of Final Entry

After recording transactions in the journal, they are posted into the Ledger. The Ledger, often called the Book of Final Entry, contains separate accounts for each category assets, liabilities, income, or expenses.

Each ledger account shows total debits and credits, helping to identify balances for the Trial Balance and final statements.

Purpose of a Ledger

To classify financial data under specific account heads
To determine the balances of each account for the Trial Balance
To prepare financial statements accurately

Example

From the earlier entry:

In the Cash Account, ₹10,000 appears on the debit side
In Ram’s Account, ₹10,000 appears on the credit side

This classification helps track how each account is affected by daily business transactions.

3. Trial Balance: The Checking Tool

Once all ledger postings are complete, a Trial Balance is prepared.
It lists all ledger account balances on a specific date and ensures that total debits equal total credits.

It serves as a check on the mathematical accuracy of the books of accounts.

Key Components of a Trial Balance

Particulars (name of accounts)
Ledger Folio (L.F.)
Debit balance (₹)
Credit balance (₹)

Objectives of a Trial Balance

To verify the accuracy of ledger postings
To summarize all account balances in one statement
To act as a base for preparing final accounts

Example

Trial Balance on April 1, 2025:

Cash A/c → Debit ₹10,000
Ram A/c → Credit ₹10,000
Total Debits = Total Credits = ₹10,000

The equality of totals confirms that the books are correctly balanced.

Key Differences Between Journal, Ledger, and Trial Balance

Nature

Journal: Book of original entry
Ledger: Book of final entry
Trial Balance: Statement of balances

Function

Journal: Records transactions as they occur
Ledger: Classifies transactions under specific accounts
Trial Balance: Checks the arithmetical accuracy of the books

Order

Journal: Chronological order
Ledger: Account-wise order
Trial Balance: Summary form

Purpose

Journal: Initial recording of all transactions
Ledger: Finding account balances
Trial Balance: Verification and accuracy check

Why Learning Basics of Accounting Is Important

For Class 11 students, understanding Journals, Ledgers, and the Trial Balance builds a solid foundation for advanced topics like Depreciation, Financial Statements, and Bank Reconciliation.

Moreover, it develops essential skills such as logical reasoning, accuracy, and decision-making vital for success in commerce and finance.

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