Saturday, February 10, 2018
Friday, February 9, 2018
Wednesday, November 25, 2015
What is journal?
journal
An accounting record where all business transactions are originally entered. A journal details which transactions occurred and what accounts were affected. Journal entries are usually recorded in chronological order, and using the double-entry method of bookkeeping.
Monday, November 23, 2015
What is ledger?
What is a Ledger?
A ledger is an accounting book that facilitates the transfer of all journal entries in a chronological sequence to individual accounts. The process of recording journal entries into the ledger is called posting.
Type of ledger collect information from
General Ledger
The general ledger accumulates information from journals. Each month all journals are totalled and posted to the General Ledger. The purpose of the General Ledger is therefore to organise and summarise the individual transactions listed in all the journals.
Debtors Ledger
The Debtors Ledger accumulates information from the sales journal. The purpose of the Debtors Ledger is to provide knowledge about which customers owe money to the business, and how much. More information on Debtors Ledger
Creditors Ledger
The Creditors Ledger accumulates information from the purchases journal. The purpose of the Creditors Ledger is to provide knowledge about which suppliers the business owes money, and how much.
Sunday, November 15, 2015
What are subsidiary books? Why are they maintained?
What are subsidiary books? Why are they maintained?
Subsidiary book is the sub division of Journal. These are known as books of prime entry or books of original entry as all the transactions are recorded in their original form. In these books the details of the transactions are recorded as they take place from day to day in a classified manner.
The important subsidiary books used are as following:-
-Cash Book : Used to record all the cash receipts and payments.
-Purchase Book : Used to record all the credit purchases.
-Sales Book : Used to record all the credit sales
-Purchase Return Book : Used to record all goods returned by business to the supplier
-Sales Return Book : Used to record all good returned by the customer to the business.
-Bills Receivable Book : Used to record all accepted bills received by business.
-Bills Payable Book : Used to record all bill accepted by us to our creditors.
-Journal Proper : Used to record those transactions for which there is no separate book.
These subsidiary books are maintained because it may be impossible to record each transaction into the ledger as it occurs. And these books record the details of the transactions and therefore help the ledger to become brief. Future reference and any desired analysis becomes easy as transactions of similar nature are recorded together.