By taking the transactions of Example 1, make posting to ledger accounts and balance the accounts.

(i) In the first transaction, cash account is debited because cash, i.e., an asset is increasing. Therefore, the entry is to be made to the debit of cash account. The second account involved in this transaction is the capital account that is a liability. Here, liability is increasing; therefore, the corresponding liability account—capital account is to be credited.

(ii) In this transaction, cash is decreasing; hence, cash account has been credited and balance in the bank is increasing; therefore, it has been debited.

(iii) Furniture is an asset and it is increasing in the transaction; hence, it has been debited the corresponding opposite account is the cash account that is decreasing; hence, it has been credited.

(iv) Purchase of goods is like an expense. Such purchase is debited to purchase account and cash is going out of the business; hence, it has been credited.

(v) Here goods have been purchased from Deepak on credit, the purchase of goods is debited to purchase account and Deepak is the giver and givers account has been credited.

Likewise, the rest of the transactions have been posted to ledger accounts.

Data from Example 1

Show journal entries for the following transactions:
(i) Ramesh started business with a cash ₹2,50,000
(ii) Deposited cash into the bank ₹1,20,000
(iii) Purchased furniture for ₹35,000 in cash
(iv) Purchased goods from Deepak of ₹15,000 in cash
(v) Purchased goods from Deepak of ₹12,000
(vi) Paid salary for the month ₹7,500
(vii) Sold goods to Mohan of ₹37,000 in cash
(viii) Sold goods to Mohit of ₹18,000
(ix) Received commission ₹3,000 by cheque
(x) Paid to Deepak ₹12,000 by cheque
(xi) Received cheque from Mohit of ₹15,000
(xii) Paid rent for the month by cheque ₹8,000