Journal
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Transcript of Journal
MEANING OF JOURNAL…A journal is the primary books of accounts in which transaction are first recorded in a date wise order..
DEFINITION OF JOURNALA journal is a chronological record of financial transaction of the business.
CHARACTERISTICS OF JOURNAL Day to day transaction are recorded in a
journal. It is a book of original entry in which
transaction are written before are posted in a ledger.
It is records both the debit and credit side aspect of transaction by double accounting system.
A journal is a record in which shows complete details of transaction in one entry.
ADVANTAGES OF A JOURNAL
Journal reduced the possibility of error.
Journal provide an explanation of transaction.
Journal provide a chronological order.
ADVANTAGES OF PETTY CASH BOOK
Time saving the chief cashier’s time.
Labour saving:saving of labour inwritting up the cash book and posting into the ledger control it provide control over small payment.
TYPES OF PETTY CASH BOOKsimple petty cash book Analytical petty cash book.
SIMPLE CASH BOOKSimple petty cash book is identical with the cash book.any cash which the petty cashier recives is recorded on the left hand side cash column and any cash pays out is recorded on right hand side.
ANALYTICAL PETTY CASH BOOKanalytical cash book has two side, left side use to record the reciept of cash and left side record to use recording the payment.
GOODS TAKEN FOR PERSONAL USE:
Goods taken for personal use
Drawing A/c ….Dr To purchase(being the goods taken for personal use)
GOODS GIVES AS CHARITYGoods given as charity is not sales of goodsThe entry passed is :charity A/c …..Dr
To purchase A/C(being the goods given as charity,hence
credited to purchase A/c)
LOSS BY FIRE THEFTIn both cases, it is loss to business.The entry passed :Loss by fire A/c ….Dr To purchase(being the loss of goods by theft or
fire)
When goods (stock) are fully insurfed, loss is to be borne by the Insurance Company/ the emtgru [assed os “
Insurance co. or Insurance Claim A/c …… Dr.To Loss by theft or Fire A/c
(Being the loss of goods recoverable from te insurance company)
Insurance c;ao, os am asset amd wo;; ne sjpwm as am asset om the Na;amce Sheet till the amount is received.
When the goods are partly insured:Insurance Co. A/c …. Dr. [Claim
admitted]Profit and Loss A/c ….Dr. [Loss – Claim not
admitted]
To Loss by Theft or Fire A/c(Being the Insurance claim partially admitted. Balance amount transferred to Profit and Loss A/c)
When claim is received from the Insurance Company:
Bank A/c ….Dr.To Insurance Co.(Being the Insurance claim received)
When the stock is not insured, loss is borne by the firm. At the end of the year, balance in loss by theft or fire Account is transferred to Profit and Loss Account:
Profit and Loss A/c …. Dr.To loss by theft or Fire A/c
(Being the loss trasnferred to Profit and Loss Account)
TRADE DISCOUNTTrade Discount is allowed when the goods are sold to the purchaser for vesale to the ultimate consumer or when the goods are purchase in large quantity.
CASH DISCOUNTCash Discount is the discount allowed to the debtor for making prompt payment on for making payment before due date.
ADVANTAGE OF TRADE DISCOUNT
Advantages of Trade Discount. It improves sales as purchaser is encourage to buy large quantity. It reduces purchase cost of purchaser and the improve profit margin.
Simple journal entry
It is an entry two accounts are affect i.e one A/c is debited another is credited with equal amount.
COMPOUND JOURNAL ENTRY IS AN ENTRY IN WHICH TWO OR MORE ACCOUNTS ARE CREDITED.
Compound journal entry