The Debtor's Ledger
In the case of Pepe's Pizza Parlour the debtor's ledger will consist mainly of the accounts of businesses who purchase goods or services off Pepe i.e. sales. These goods and services are normally purchased on credit. Nearly all goods and services sold are paid for an agreed number of days after the transaction itself (i.e. 30 days, 60 days, 90 days etc.). During this period those parties purchasing the goods would be in debt to Pepe's Pizza Parlour. They are Pepe's debtors.
| Mr. P. Thompson | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| DR | CR | |||||||||
| Debit Side | Credit Side | |||||||||
| Date | Details | Folio | Amount | Date | Details | Folio | Amount | |||
| May 01 | Balance b/d | 850.00 | ||||||||
| May 08 | Credit sale (outside catering) | C812 | 500.00 | |||||||
| May 16 | Payment received | R250 | 700.00 | |||||||
| May 31 | Balance c/d | 650.00 | ||||||||
| 1,350.00 | 1,350.00 | |||||||||
| June 01 Balance b/d | 650.00 | |||||||||
What this shows was that on May 01 Mr. P.Thompson owed Pepe £850.00.
On May 08 Pepe sold an outside catering service to him on credit at a cost of £500.00. Mr Thompson was the receiver of this service and his account is therefore debited.
On May 16 £700.00 fell due for payment to Pepe from Mr.Thompson and the amount was paid. In this case Mr. Thompson is the giver of money and his account is therefore credited.
On May 31 the account was ruled off and at this point Mr. Thompson owed Pepe's Pizza Parlour £650.00
He is Pepe's debtor and so the account balance is carried down on the left hand side of the ledger.
| The Creditor's ledger. | The Cash ledger. | The General ledger. | Return to the menu? |
If you have looked at all of the ledgers, you are ready to learn about double entries.