©CGAP/World Bank, 2009
The General Ledger
is a record of transactions organized by account number beginning
with the asset accounts and ending with expense accounts
A5-O1a
Cash Account No. 101
Date Explanation Debit Credit Balance
404,901 July 1 Purchased computer 4,000 400,901
3 Purchased motorcycles 4,000 396,901 31 Collected savings 51,000 447,901
Gross Fixed Assets Account No. 150
Date Explanation Debit Credit Balance
230,504 July 1 Purchased computer 4,000 234,504
3 Purchased motorcycles 15,000 249,504
©CGAP/World Bank, 2009
The General Journal is a chronological record of transactions
A5-O1b
Date Account Title and Explanation Ref
Num Debit Credit
July 1 Gross Fixed Assets – Computer 150 4,000
Cash (purchased equipment)
101 4,000
3 Gross Fixed Assets – Motorcycles 150 15,000
Cash 101 4,000
Short-term Liabilities (purchased motorcycles on cash & credit )
225 11,000
31 Cash 101 51,000
Demand Deposits (collect savings)
201 51,000
©CGAP/World Bank, 2009
Ledger Accounts
Represents the accumulation of all information about
changes in an asset, liability, equity, revenue, or expense
item in one place.
Each Ledger account is identified by its account name and
number as stated on the Chart of Accounts.
A5-O2
Gross Fixed Assets Account No. 150
Date Explanation Debit Credit Balance
230,504 July 1 Purchased computer 4,000 234,504
3 Purchased motorcycles 15,000 249,504
©CGAP/World Bank, 2009
Cash Ledger – Account 101
Most Important
The number of Cash transactions in most MFIs is large.
The chances of committing fraud are higher than with other assets.
Importance of timely payments to reputation and financial position
A5-O3
Cash Account No. 101
Date Explanation Debit Credit Balance
404,901 July 1 Purchased computer 4,000 400,901
3 Purchased motorcycles 4,000 396,901 31 Collected savings 51,000 447,901 31 July loan repayments 226,200 674,101 31 July loan disbursements 290,000 384,101 31 July loan fees 5,800 389,901
©CGAP/World Bank, 2009
Posting
The process of copying journal entry information from the
General Journal to the General Ledger
A5-O4
General Journal
Chronological
General Ledger
By Accounts
POSTING
Journal Credits Ledger Credits
Journal Debits Ledger Debits
©CGAP/World Bank, 2009
General Ledger A5-O5
Date Explanation Ref Debit Credit Balance
©CGAP/World Bank, 2009
General Ledger September 2007 A5-O6a
Explanation REF Debit Credit Balance
CASH AND DUE FROM BANKS 101 404,901
July 1 Purchased computer 4,000 400,901
3 Purchased motorcycles 4,000 396,901
31 Collected savings 51,000 447,901
31 July loan repayments 226,200 674,101
31 July loan disbursements 290,000 384,101
31 July loan fees 5,800 389,901
Aug 1 Semiannual board meeting 3,100 386,801
7 Short-term deposit matures 10,400 397,201
9 Prepaid rent 2,000 395,201
31 Collected savings 57,000 452,201
31 August loan repayments 222,300 674,501
31 August loan disbursements 304,000 370,501
31 August loan fees 6,080 376,581
Sept 3 Paid short-term loan 9,200 367,381
6 Study tour 1,500 365,881
30 Collected savings 63,000 428,881
30 September loan repayments 343,200 772,081
30 September loan disbursements 341,000 431,081
30 September loan fees 6,820 437,901
30 Long-term investment 40,000 397,901
Monthly Expenses 204,300 193,601
Date
©CGAP/World Bank, 2009
General Ledger September 2007 (continued) A5-O6b
Explanation REF Debit Credit Balance
TRADE INVESTMENTS 110 48,270
Aug 7 Short-term deposit matures 10,000 38,270
GROSS LOAN PORTFOLIO 120 956,406
July 31 July loan repayments 174,000 782,406
31 July loan disbursements 290,000 1,072,406
Aug 31 August loan repayments 171,000 901,406
31 August loan disbursements 304,000 1,205,406
Sept 30 September loan repayments 264,000 941,406
30 September loan disbursements 341,000 1,282,406
IMPAIRMENT LOSS ALLOWANCE 125 (19,128)
ACCOUNTS RECEIVABLE AND
OTHER ASSETS 135 36,415
Aug 9 Prepaid rent 2,000 38,415
OTHER LONG-TERM INVESTMENTS 140 -
Sept 31 Purchased term-deposit 40,000 40,000
GROSS FIXED ASSETS 150 230,504
July 1 Purchased computer 4,000 234,504
July 3 Purchased motorcycles 15,000 249,504
ACC. DEPRECIATION 155 (100,353)
Date
©CGAP/World Bank, 2009
General Ledger September 2007 (continued) A5-O6c
Explanation REF Debit Credit Balance
DEMAND DEPOSITS 201 595,517
July 31 July savings collected 51,000 646,517
Aug 31 August savings collected 57,000 703,517
Sept 30 September savings collected 63,000 766,517
SHORT-TERM BORROWINGS 215 19,514
July 3 Purchased motorcycles 11,000 30,514
Sept 3 Paid short-term loan 8,000 22,514
Sept 6 Study tour 3,500 26,014
PAID-IN CAPITAL 301 50,000
DONATED EQUITY – PRIOR 310 1,389,241
PRIOR YEAR’S P/L 325 (778,735)
RESERVES 335 50,000
INTEREST ON LOANS 410 233,910
July 31 July loan repayments 52,200 286,110
Aug 31 August loan repayments 51,300 337,410
Sept 30 September loan repayments 79,200 416,610
Date
©CGAP/World Bank, 2009
General Ledger September 2007 (continued) A5-O6d
Explanation REF Debit Credit Balance
LOAN FEES/SERVICE CHARGE 415 24,399
July 31 July loan disbursements 5,800 30,199
Aug 31 August loan disbursements 6,080 36,279
Sept 30 September loan disbursements 6,820 43,099
INTEREST ON INVESTMENTS 420 -
Aug 7 Short-term deposit matures 400 400
DONATIONS 440 442,031
INTEREST PAID ON ST DEBT 515 1,030
Sept 3 Paid interest on short-term loan 1,200 2,230
PROVISION FOR LOAN IMPAIRMENT 530 19,128
PERSONNEL 545 197,940
July 31 Salaries 32,000 229,940
Aug 31 Salaries 32,000 261,940
Sept 30 Salaries 32,000 293,940
TRAINING AND DEVELOPMENT 565 24,379
Sept 6 Study tour 5,000 29,379
Date
©CGAP/World Bank, 2009
General Ledger September 2007 (continued) A5-O6e
Explanation REF Debit Credit Balance
RENT AND UTILITIES 566 64,256
July 31 Rent and utilities 10,700 74,956
Aug 31 Rent and utilities 10,700 85,656
Sept 30 Rent and utilities 10,700 96,356
COMMUNICATIONS 567 24,659
July 31 Phone, courier, etc. 4,000 28,659
Aug 31 Phone, courier, etc 4,000 32,659
Sept 30 Phone, courier, etc 4,000 36,659
BANK FEES 568 7,694
July 31 Bank fees 1,300 8,994
Aug 31 Bank fees 1,300 10,294
Sept 30 Bank fees 1,300 11,594
INSURANCE 569 33
PRINTING AND MATERIALS 570 29,102
July 31 Printing and materials 4,700 33,802
Aug 31 Printing and materials 4,700 38,502
Sept 30 Printing and materials 4,700 43,202
Date
©CGAP/World Bank, 2009
General Ledger September 2007 (continued) A5-O6f
Explanation REF Debit Credit Balance
REPAIR AND MAINTENANCE 571 18,119
July 31 Repair and maintenance 3,000 21,119
Aug 31 Repair and maintenance 3,000 24,119
Sept 30 Repair and maintenance 3,000 27,119
TRAVEL AND TRANSPORT 572 74,400
July 31 Travel and transport 12,400 86,800
Aug 31 Travel and transport 12,400 99,200
Sept 30 Travel and transport 12,400 111,600
LEGAL AND AUDIT FEES 573 1,942
BOARD MEETING EXPENSES 574 3,522
Aug 1 Semiannual board meeting 3,100 6,622
OTHER ADMIN/MISC EXPENSES 575 2,658
Date