Why is "Reversing debit and credit on a transaction (e.g., debiting Sales when recording a credit sale)." a common mistake in Ledger accounting?

Why it happens: Confusion about which account 'gives' and which 'receives'. How to avoid it: Rely on **DEAD CLIC**: Debits = Expenses, Assets, Drawings (increases). Credits = Liabilities, Income, Capital (increases). For a credit sale: Income ↑ (Sales) → Cr. Receivable ↑ (Customer) → Dr asset. Source: Edexcel 4AC1 examiner reports flag this in every series.

Why is "Putting customer accounts in the General Ledger or supplier accounts in the Sales Ledger." a common mistake in Ledger accounting?

Why it happens: Forgetting the personal-vs-impersonal distinction. How to avoid it: Personal accounts (named individuals/businesses) → Sales Ledger (customers) or Purchases Ledger (suppliers). All others → General Ledger.

Why is "Writing 'Balance c/d' on the SAME side as the larger total." a common mistake in Ledger accounting?

Why it happens: Students forget that c/d must make the smaller side equal the larger side. How to avoid it: Balance c/d ALWAYS goes on the smaller side. Balance b/d (next day) ALWAYS appears on the opposite side from where c/d was written.

Why is "Writing only the figure in the Details column without naming the contra account." a common mistake in Ledger accounting?

Why it happens: Students assume the marker will figure it out. How to avoid it: The Details column must name the OTHER account in the double entry. 'Bank' in the Sales account tells the marker the entry is Cr Sales / Dr Bank.

Why is "Treating drawings as an expense (debiting Drawings on the income statement)." a common mistake in Ledger accounting?

Why it happens: Drawings look like 'money going out'. How to avoid it: Drawings reduce CAPITAL, not profit. Drawings have their own T-account that is closed off to Capital at year-end. They never appear in the income statement.

Why is "Not double-ruling the totals at the foot of a T-account when balancing." a common mistake in Ledger accounting?

Why it happens: Cosmetic but examiner-noted. How to avoid it: Once both sides are equal, draw a double line under both totals to indicate the account has been balanced. This is the standard accounting convention.

Why is "Recording goods bought as 'Inventory' (or 'Stock') instead of 'Purchases' during the year." a common mistake in Ledger accounting?

Why it happens: Confusion about how inventory works. How to avoid it: Goods bought during the year are debited to **Purchases** (an expense account). The **Inventory** account is only touched at year-end via a Journal entry that records opening and closing inventory.

Introduction to Book KeepingPearson Edexcel IGCSE Accounting 4AC1

Ledger accounting

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Ledger Accounting — Edexcel IGCSE Accounting (4AC1) Detailed Notes

The T-account, double entry rules (DEAD CLIC), the three ledger divisions, and how to balance an account. Every Paper 2 calculation question depends on flawless mastery of this content.

What you’ll learn

Mapped to the Pearson Edexcel IGCSE 4AC1 syllabus (2026 onwards).

Explain the structure of the ledger and identify the three divisions.
State the rules of double entry and apply them to transactions using DEAD CLIC.
Open and post entries to T-accounts for assets, liabilities, capital, income and expenses.
Balance a T-account at period-end and carry the balance forward.
Recognise the connection between books of original entry, the ledger and the trial balance.

The three divisions of the ledger

Sales Ledger for customers, Purchases Ledger for suppliers, General Ledger for everything else.

The ledger is the collection of all the accounts of the business. Edexcel 4AC1 divides it into three parts:

1. Sales Ledger (Debtors Ledger). Contains personal accounts of credit customers. Each customer has their own page/account showing what they owe. The total of all debit balances in the Sales Ledger = trade receivables in the SOFP.

2. Purchases Ledger (Creditors Ledger). Contains personal accounts of credit suppliers. Each supplier has their own account showing what is owed to them. The total of all credit balances = trade payables in the SOFP.

3. General Ledger (Nominal Ledger). Contains all impersonal accounts — non-current assets (premises, machinery, vehicles), other assets (inventory, bank, cash via the Cash Book), liabilities (loan, accruals), capital, drawings, income (sales, discount received), expenses (purchases, wages, rent, depreciation, discount allowed).

The Cash Book is special — it is BOTH a book of original entry AND the cash and bank accounts. It is not held inside any of the three ledger divisions; it stands on its own.

Personal accounts (named) → SL or PL.
Impersonal accounts → General Ledger.
Cash Book = book of original entry + cash/bank ledger account.

DEAD CLIC — the rule of debit and credit

Internalise this once and you'll never get a Dr/Cr wrong again.

Side	What it INCREASES
Debit (Dr)	Drawings, Expenses, Assets
Credit (Cr)	Liabilities, Income, Capital

Mnemonic: DEAD CLIC = Debits Expenses Assets Drawings / Credits Liabilities Income Capital.

Memorise DEAD CLIC once — debits go up for Drawings, Expenses, Assets; credits go up for Liabilities, Income, Capital.

Procedure for every transaction:

Identify the two accounts affected.
Classify each as Asset, Expense, Drawings, Liability, Income, or Capital.
Decide whether each is increasing or decreasing.
Apply DEAD CLIC: increases match the natural side; decreases go on the opposite side.
Enter on opposite sides of the two T-accounts.

Worked example. Owner introduces £10,000 cash as capital:

Cash = Asset, increasing → Dr Cash £10,000.
Capital = Capital, increasing → Cr Capital £10,000.

Another. Pays £500 wages by cheque:

Wages = Expense, increasing → Dr Wages £500.
Bank = Asset, decreasing → Cr Bank £500.

Debit side = Drawings, Expenses, Assets.
Credit side = Liabilities, Income, Capital.
Increases on the natural side; decreases on the opposite side.

The T-account — format and conventions

Standard layout, contra-account references in Details, double-ruled totals.

Every ledger account is drawn as a 'T':

            Dr             Account Name             Cr
        Date | Details | £             Date | Details | £
        --------------------------     --------------------------

Key conventions:

Account name at the top centre.
'Dr' label above the left column, 'Cr' above the right.
Three columns per side: Date, Details, £.
Details column = NAME of the contra account. If the entry's other side is in the Bank account, write 'Bank' in Details — NOT 'paid in cash' or 'received'.
At period-end, balance off the account.
Totals are double-ruled to show the account has been balanced.

Account name centred at top.
Three columns each side: Date | Details | £.
Details = contra account NAME, not transaction description.
Double-rule totals when balancing.

Balancing a T-account

Make the two sides equal with Balance c/d, bring it down on the OPPOSITE side next period.

Step-by-step procedure:

Total each side mentally.
The difference is the balance.
Write 'Balance c/d' on the smaller side with the difference figure.
Both sides now have the same total — draw a double line under the totals.
On the first day of the next period, write 'Balance b/d' on the OPPOSITE side (the side where the larger total was).

Example. Customer L Patel:

Dr entries: opening £450, sales £700, sales £300 = £1,450.
Cr entries: cheque £450, returns £80, discount £20 = £550.
Difference = £900.
Cr side has £550, Dr side has £1,450 → Cr side is smaller.
Write 'Balance c/d £900' on the Cr side. Now Cr total = £550 + £900 = £1,450 = Dr total. ✓
Next day: 'Balance b/d £900' on the Dr side.

Why the swap? Because b/d shows what L Patel still OWES — a debit balance on a customer's account = receivable.

From book of original entry to the ledger

Individual entries go to personal accounts; totals go to nominal accounts.

The standard posting flow:

Book of original entry	Where each entry goes	Where the total goes
Sales Day Book	Dr each customer (SL)	Cr Sales (GL) at period-end
Purchases Day Book	Cr each supplier (PL)	Dr Purchases (GL) at period-end
Sales Returns DB	Cr each customer (SL)	Dr Sales Returns (GL)
Purchases Returns DB	Dr each supplier (PL)	Cr Purchases Returns (GL)
Cash Book (Dr side)	Cr the other account (SL/GL)	n/a — cash/bank ARE the ledger
Cash Book (Cr side)	Dr the other account (PL/GL)	n/a
Cash Book discount columns	(already in personal accounts at posting time)	Total to Discount Allowed (Dr GL) / Discount Received (Cr GL)
Petty Cash Book	(Cr Petty Cash for each payment)	Analysis column totals → Dr expense accounts (GL)
The Journal	Dr/Cr accounts named in the entry	n/a

Double entry is preserved at every stage.

Individual entry → personal account (SL/PL).
Total → nominal account (GL).
Cash Book entries post directly (no day-book step).

Personal vs impersonal — the most common ledger error

If the account is a person/business name, it's personal. If it's a category, it's impersonal.

| Personal accounts | Impersonal accounts | |---|---|| Credit customers — go to Sales Ledger | All assets (premises, machinery, vehicles, inventory, bank, cash) — General Ledger | | Credit suppliers — go to Purchases Ledger | All liabilities (loan, accruals) — General Ledger | | | Capital and Drawings — General Ledger | | | All income (sales, discount received) — General Ledger | | | All expenses (purchases, wages, rent) — General Ledger |

Why does this matter?

The Sales Ledger total at any moment = trade receivables in the SOFP.
The Purchases Ledger total = trade payables in the SOFP.
The General Ledger contains every other figure needed for the trial balance and financial statements.

How it’s examined

Paper 1: Apply DEAD CLIC to transactions (state Dr and Cr for each — 4–6 marks); identify ledger division (3–4 marks).

Paper 2: Open and post T-accounts for a series of transactions (8–12 marks); balance an account at period-end. Often part of a larger 'prepare the trial balance' question.

Common stems: 'State which account is debited and which is credited…', 'Open the necessary accounts and record…', 'Balance the account at…', 'In which division of the ledger would you find…'

Sources: Pearson Edexcel International GCSE in Accounting (4AC1) Specification — Issue 3 (2026 onwards); Edexcel 4AC1 Examiner Reports (2022–2024). Last reviewed 2026-05-19.

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Step-by-step worked examples — Ledger accounting

Step-by-step solutions to past-paper-style questions on ledger accounting, written exactly the way a tutor would explain them at the board.

1Apply DEAD CLIC to a series of transactions
Building confidence• Edexcel 4AC1 style — short answer (5 marks)• DEAD-CLIC, AO1, AO2
Question
For each of the following, state which account is debited and which is credited: (a) Paid wages by cheque £1,200. (b) Sold goods on credit to L Smith £600. (c) Owner introduced £5,000 cash as capital. (d) Returned faulty goods to supplier J Khan £150. (e) Received cheque from L Smith in part-settlement £400.
Step-by-step solution
1. Step 1
  For each: classify each side as Asset, Expense, Liability, Income, Capital, or Drawings.
2. Step 2
  Apply DEAD CLIC. Debit increases: Expenses, Assets, Drawings. Credit increases: Liabilities, Income, Capital.
Answer
(a) Dr Wages £1,200 (expense ↑); Cr Bank £1,200 (asset ↓)

(b) Dr L Smith £600 (asset ↑ — receivable); Cr Sales £600 (income ↑)

(c) Dr Cash £5,000 (asset ↑); Cr Capital £5,000 (capital ↑)

(d) Dr J Khan £150 (liability ↓); Cr Returns Outwards £150 (deduction from expense)

(e) Dr Bank £400 (asset ↑); Cr L Smith £400 (asset ↓ — receivable settled)
Examiner tip
A* candidates write exactly which account name appears on each side. 'Returns Outwards' is the credit, not 'Purchases'. Examiner reports penalise vague entries like 'cash account' instead of 'Bank'.
2Balance a T-account at month-end
Higher• Edexcel 4AC1 style — calculation (6 marks)• balancing, T-account, AO1, AO2
Question
The following entries relate to L Patel's account in the Sales Ledger for May 2026.

1/5: Balance b/d £450 Dr.

8/5: Credit sale £700.

15/5: Cheque received £450.

20/5: Credit sale £300.

27/5: Returns inwards £80.

31/5: Discount allowed £20.

Write up the account and bring down the closing balance.
Step-by-step solution
1. Step 1
  L Patel is a customer — his account sits in the Sales Ledger. Sales increase his debt (Dr); receipts/returns/discounts reduce his debt (Cr).
2. Step 2
  Add up each side, calculate the difference, enter 'Balance c/d' on the smaller side and 'Balance b/d' on the larger side on the next day.
Answer
L Patel — Sales Ledger Account (May 2026)

Dr Cr
Date Details £ Date Details £
1/5 Balance b/d 450 15/5 Bank 450
8/5 Sales 700 27/5 Returns Inwards 80
20/5 Sales 300 31/5 Discount Allowed 20
31/5 Balance c/d 900
1,450 1,450
1/6 Balance b/d 900

L Patel owes the business £900 at the start of June.
Examiner tip
Top-band requirements: (1) both sides total identically, (2) 'Balance c/d' on the SMALLER side, (3) 'Balance b/d' on the OPPOSITE side on the next day, (4) totals are double-ruled.
3Identify the correct ledger division for each account
Building confidence• Edexcel 4AC1 style — short-answer (4 marks)• ledger-divisions, AO1
Question
State in which division of the ledger each of the following accounts would be found: (a) Premises. (b) J Brown — a credit customer. (c) K Singh — a credit supplier. (d) Discount Allowed.
Step-by-step solution
1. Step 1
  Three divisions: Sales Ledger (credit customers), Purchases Ledger (credit suppliers), General Ledger (everything else — assets, liabilities, capital, income, expenses).
Answer
(a) General Ledger — Premises is a non-current asset.

(b) Sales Ledger — J Brown is a credit customer (a personal account).

(c) Purchases Ledger — K Singh is a credit supplier.

(d) General Ledger — Discount Allowed is a nominal (expense) account.
Examiner tip
A common error is to put assets in 'the asset ledger' (no such division). All non-personal accounts sit in the General Ledger.
4Open and post a series of transactions to multiple T-accounts
Stretch• Edexcel 4AC1 style — extended response (10 marks)• multi-account, AO1, AO2, balancing
Question
Open T-accounts and record the following transactions of Hassan's new business for week 1 of trading:

1 Sep: Hassan introduced £10,000 by cheque as capital.

2 Sep: Bought goods on credit from W Lee £2,000.

3 Sep: Cash sales £600 (banked).

4 Sep: Sold goods on credit to A Park £1,200.

5 Sep: Paid £500 by cheque to W Lee in part-settlement.

6 Sep: Returned goods to W Lee £200.

7 Sep: Paid rent by cheque £400.

Balance each account at 7 Sep.
Step-by-step solution
1. Step 1
  Identify accounts: Bank, Capital, Purchases, W Lee, Sales, A Park, Returns Outwards, Rent.
2. Step 2
  Post each entry to TWO accounts. Use DEAD CLIC to determine sides.
3. Step 3
  Balance each non-zero account at 7 Sep.
Answer
Key entries (showing both sides):

Bank Account — Dr side: Capital £10,000, Sales £600. Cr side: W Lee £500, Rent £400, Balance c/d £9,700. Total = £10,600 each side. Balance b/d 8 Sep £9,700.

Capital Account — Cr: Bank £10,000. Balance c/d £10,000 (Cr).

Purchases Account — Dr: W Lee £2,000. Balance c/d £2,000 (Dr).

W Lee (Purchases Ledger) — Cr side: Purchases £2,000. Dr side: Bank £500, Returns Outwards £200, Balance c/d £1,300 (Cr). Total = £2,000 each side.

Sales Account — Cr: Bank £600, A Park £1,200. Balance c/d £1,800 (Cr).

A Park (Sales Ledger) — Dr: Sales £1,200. Balance c/d £1,200 (Dr).

Returns Outwards Account — Cr: W Lee £200. Balance c/d £200 (Cr).

Rent Account — Dr: Bank £400. Balance c/d £400 (Dr).

Check (trial balance proxy):

Dr totals: Bank £9,700 + Purchases £2,000 + A Park £1,200 + Rent £400 = £13,300

Cr totals: Capital £10,000 + W Lee £1,300 + Sales £1,800 + Returns Outwards £200 = £13,300 ✓
Examiner tip
Top-band answers (1) open ALL accounts, (2) post each entry twice with the correct contra reference in the Details column, (3) balance each account, (4) include a check that total Dr = total Cr. The 'check' is what separates A* from A.
5State Dr or Cr for each transaction effect
Getting started• Edexcel 4AC1 style — short-answer (5 marks)• DEAD-CLIC, AO1
Question
State whether each account entry is a debit or a credit: (a) Sales — increase by £500. (b) Bank — decrease by £200. (c) Drawings — increase by £100. (d) Capital — increase by £5,000. (e) Trade Payables — decrease by £400.
Step-by-step solution
1. Step 1
  Use DEAD CLIC: Debits ↑ Expenses, Assets, Drawings. Credits ↑ Liabilities, Income, Capital. For decreases, flip the side.
Answer
(a) Sales ↑ = Credit (income increases on Cr).

(b) Bank ↓ = Credit (asset decreases on Cr).

(c) Drawings ↑ = Debit.

(d) Capital ↑ = Credit.

(e) Trade Payables ↓ = Debit (liability decreases on Dr).
Examiner tip
Each line is 1 mark. Most-marked error: confusing decrease of asset (Cr) with decrease of liability (Dr).
6Identify the ledger division for each account
Getting started• Edexcel 4AC1 style — short-answer (5 marks)• ledger-division, AO1
Question
State the ledger division (Sales Ledger / Purchases Ledger / General Ledger) where each account is found: (a) Insurance Expense. (b) A Khan — a credit customer. (c) Motor Vehicles. (d) K Lee — a credit supplier. (e) Loan from Bank.
Step-by-step solution
1. Step 1
  Personal accounts (named) → SL or PL. Everything else → GL.
Answer
(a) General Ledger (expense).

(b) Sales Ledger (credit customer).

(c) General Ledger (non-current asset).

(d) Purchases Ledger (credit supplier).

(e) General Ledger (liability).
Examiner tip
Even capital accounts and loans (both involving people) sit in the General Ledger — only TRADING customers/suppliers go to SL/PL.
7Calculate the closing balance on a customer's account
Building confidence• Edexcel 4AC1 style — calculation (4 marks)• balancing, receivables, AO1, AO2
Question
K Khan's account had an opening balance of £600 Dr on 1 April. During April: credit sales to her £950; cheque received from her £750; returns inwards £100; discount allowed £50. Calculate the closing balance.
Step-by-step solution
1. Step 1
  Use the receivables formula: Closing = Opening + Credit Sales − Cash Received − Returns − Discount.
Answer
Closing balance = £600 + £950 − £750 − £100 − £50 = £650 Dr

K Khan owes £650 at month-end.
Examiner tip
A* candidates state 'Dr' (or 'owed by customer') alongside the figure. The Dr/Cr label is part of the answer.
8Calculate the closing balance on a supplier's account
Building confidence• Edexcel 4AC1 style — calculation (4 marks)• balancing, payables, AO1, AO2
Question
M Wong (supplier) had an opening balance of £1,200 Cr. During the month: credit purchases £2,400; cheque paid to her £1,800; returns outwards £150; discount received £30. Calculate the closing balance.
Step-by-step solution
1. Step 1
  Closing = Opening + Credit Purchases − Cash Paid − Returns − Discount.
Answer
Closing balance = £1,200 + £2,400 − £1,800 − £150 − £30 = £1,620 Cr

The business owes M Wong £1,620 at month-end.
Examiner tip
Symmetric to the customer formula but mirror-image. The supplier's account has a Cr balance because the business owes the supplier.
9Calculate the closing bank balance from a series of cash transactions
Building confidence• Edexcel 4AC1 style — calculation (5 marks)• bank-balance, AO1, AO2
Question
On 1 May the bank account showed £2,800 Dr. During May the following bank transactions occurred:

Cash sales banked £1,400

Cheque received from L Khan £600

Cheque paid to K Wong £900

Wages by cheque £1,200

Rent by cheque £500

Calculate the closing bank balance.
Step-by-step solution
1. Step 1
  Total receipts and payments separately, then apply to opening balance.
Answer
Receipts (Dr Bank): 1,400 + 600 = £2,000. Payments (Cr Bank): 900 + 1,200 + 500 = £2,600.

Closing balance = £2,800 + £2,000 − £2,600 = £2,200 Dr

The bank account is in funds; nothing is overdrawn.
Examiner tip
Always specify Dr (in funds) or Cr (overdrawn). A negative balance would indicate an overdraft (Cr side).

Dr			Cr
Date	Details	£	Date	Details	£
1/5	Balance b/d	450	15/5	Bank	450
8/5	Sales	700	27/5	Returns Inwards	80
20/5	Sales	300	31/5	Discount Allowed	20
			31/5	Balance c/d	900
		1,450			1,450
1/6	Balance b/d	900

Key Formulae — Ledger accounting

The formulae you need to memorise for ledger accounting on the Pearson Edexcel IGCSE 4AC1 paper, with every variable defined in plain English and a note on when to use it.

The accounting equation (foundation of double entry)
$Assets = Capital + Liabilities$
$Assets$
Resources owned or controlled by the business
$Capital$
Owner's claim on net assets
$Liabilities$
Amounts owed by the business
When to use
Every double-entry transaction must keep this equation in balance. Use as a check after every entry: did both sides of the equation move by equal amounts?
Example
Owner introduces £10,000 by cheque: Assets ↑ £10,000 (Bank) and Capital ↑ £10,000 — balanced.
Balancing rule for a T-account
$Balance c/d = | Total Dr − Total Cr | (on the smaller side)$
$Total Dr$
Sum of all debit entries in the period
$Total Cr$
Sum of all credit entries in the period
$Balance c/d$
Difference between the two sides — written on the smaller side to make totals equal
When to use
At period-end to close an account. The balance c/d is then brought down as Balance b/d on the OPPOSITE side at the start of the next period.
Example
Sales account: Total Cr £4,800, Total Dr £0 → Balance c/d £4,800 on the Dr side; Balance b/d £4,800 on the Cr side next period.
Closing balance on a customer's account
$Closing Balance = Opening Balance + Credit Sales − Cash Received − Returns Inwards − Discount Allowed$
$Opening Balance$
Amount owed by customer at start of period (Dr balance)
$Credit Sales$
New invoices issued to the customer
$Cash Received$
Payments received from the customer
$Returns Inwards$
Goods returned by the customer
$Discount Allowed$
Settlement discount given to the customer
When to use
Quick calculation of a customer's closing balance without writing the full T-account.
Example
Opening £450 + Sales £1,000 − Received £450 − Returns £80 − Discount £20 = £900 owed.

Key Definitions and Keywords — Ledger accounting

Definitions to memorise and the exact keywords mark schemes credit for ledger accounting answers — sharpened from recent examiner reports for the 2026 Pearson Edexcel IGCSE 4AC1 sitting.

Ledger
Examiner keyword
The collection of accounts in which all business transactions are recorded after being entered in the books of original entry. Divided into Sales Ledger, Purchases Ledger and General Ledger.
T-account
A two-column layout for a ledger account in the shape of a T — debit entries on the left, credit entries on the right.
Double-entry bookkeeping
Examiner keyword
The system in which every transaction is recorded twice — once as a debit and once as a credit of equal amount — keeping the accounting equation in balance.
Debit (Dr)
Examiner keyword
An entry on the LEFT-hand side of an account. Increases assets, expenses and drawings; decreases liabilities, capital and income.
Credit (Cr)
Examiner keyword
An entry on the RIGHT-hand side of an account. Increases liabilities, capital and income; decreases assets, expenses and drawings.
Sales Ledger (Debtors Ledger)
Examiner keyword
The division containing personal accounts of credit customers (trade receivables). Each customer has their own account showing what they owe.
Purchases Ledger (Creditors Ledger)
Examiner keyword
The division containing personal accounts of credit suppliers (trade payables). Each supplier has their own account showing what is owed to them.
General Ledger (Nominal Ledger)
Examiner keyword
The division containing all impersonal accounts — assets (other than receivables), liabilities (other than payables), capital, income, expenses.
Balance b/d (brought down)
The closing balance of the previous period written on the opening line of the new period on the OPPOSITE side from where it was carried down.
Balance c/d (carried down)
The figure entered on the smaller side of an account at period-end to make the totals equal. Equals the difference between total Dr and total Cr.
Folio (reference)
A column in a ledger account or day book showing the cross-reference to where the matching entry appears (e.g., 'SDB' for Sales Day Book, 'GL5' for General Ledger page 5). Aids tracing and forms part of the audit trail.

Common Mistakes and Misconceptions — Ledger accounting

The traps other students keep falling into on ledger accounting questions — taken from recent Pearson Edexcel IGCSE 4AC1 examiner reports and mark schemes — and how to avoid them.

✕Reversing debit and credit on a transaction (e.g., debiting Sales when recording a credit sale).
Edexcel 4AC1 examiner reports flag this in every series.
Why it happens
Confusion about which account 'gives' and which 'receives'.
How to avoid it
Rely on DEAD CLIC: Debits = Expenses, Assets, Drawings (increases). Credits = Liabilities, Income, Capital (increases). For a credit sale: Income ↑ (Sales) → Cr. Receivable ↑ (Customer) → Dr asset.
✕Putting customer accounts in the General Ledger or supplier accounts in the Sales Ledger.
Why it happens
Forgetting the personal-vs-impersonal distinction.
How to avoid it
Personal accounts (named individuals/businesses) → Sales Ledger (customers) or Purchases Ledger (suppliers). All others → General Ledger.
✕Writing 'Balance c/d' on the SAME side as the larger total.
Why it happens
Students forget that c/d must make the smaller side equal the larger side.
How to avoid it
Balance c/d ALWAYS goes on the smaller side. Balance b/d (next day) ALWAYS appears on the opposite side from where c/d was written.
✕Writing only the figure in the Details column without naming the contra account.
Why it happens
Students assume the marker will figure it out.
How to avoid it
The Details column must name the OTHER account in the double entry. 'Bank' in the Sales account tells the marker the entry is Cr Sales / Dr Bank.
✕Treating drawings as an expense (debiting Drawings on the income statement).
Why it happens
Drawings look like 'money going out'.
How to avoid it
Drawings reduce CAPITAL, not profit. Drawings have their own T-account that is closed off to Capital at year-end. They never appear in the income statement.
✕Not double-ruling the totals at the foot of a T-account when balancing.
Why it happens
Cosmetic but examiner-noted.
How to avoid it
Once both sides are equal, draw a double line under both totals to indicate the account has been balanced. This is the standard accounting convention.
✕Recording goods bought as 'Inventory' (or 'Stock') instead of 'Purchases' during the year.
Why it happens
Confusion about how inventory works.
How to avoid it
Goods bought during the year are debited to Purchases (an expense account). The Inventory account is only touched at year-end via a Journal entry that records opening and closing inventory.

Practice questions

Exam-style questions with step-by-step worked solutions. Try one before checking the method.

Past paper style quiz

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Ledger accounting

Short Study Notes in the form of Slides

Short Study Notes — Ledger accounting

Detailed Notes

What you’ll learn

How it’s examined

1Apply DEAD CLIC to a series of transactions

2Balance a T-account at month-end

3Identify the correct ledger division for each account

4Open and post a series of transactions to multiple T-accounts

5State Dr or Cr for each transaction effect

6Identify the ledger division for each account

7Calculate the closing balance on a customer's account

8Calculate the closing balance on a supplier's account

9Calculate the closing bank balance from a series of cash transactions

The accounting equation (foundation of double entry)

Balancing rule for a T-account

Closing balance on a customer's account

Ledger

T-account

Double-entry bookkeeping

Debit (Dr)

Credit (Cr)

Sales Ledger (Debtors Ledger)

Purchases Ledger (Creditors Ledger)

General Ledger (Nominal Ledger)

Balance b/d (brought down)

Balance c/d (carried down)

Folio (reference)

✕Reversing debit and credit on a transaction (e.g., debiting Sales when recording a credit sale).

✕Putting customer accounts in the General Ledger or supplier accounts in the Sales Ledger.

✕Writing 'Balance c/d' on the SAME side as the larger total.

✕Writing only the figure in the Details column without naming the contra account.

✕Treating drawings as an expense (debiting Drawings on the income statement).

✕Not double-ruling the totals at the foot of a T-account when balancing.

✕Recording goods bought as 'Inventory' (or 'Stock') instead of 'Purchases' during the year.

Practice questions

Past paper style quiz

Assess your understanding