Week3a.journals Ledgers
-
Upload
yow-jing-pei -
Category
Documents
-
view
4 -
download
1
description
Transcript of Week3a.journals Ledgers
-
Journals & Ledgers
-
T account: An illustration
Cash
Debit Credit
Balance b/f 450.00 7 Jan Wages
expense
150.00
2 Jan Sales 200.00 15 Jan Electricity
expense
120.00
5 Jan Sales 350.00 Balance c/f 730.00
1,000.00 1,000.00
Balance b/f 730.00
-
Ledger account: An illustration
Cash Debit Credit
Balance b/f 450.00
2 Jan Sales 200.00
5 Jan Sales 350.00
7 Jan Wages expense 150.00
15 Jan Electricity expense 120.00
Balance c/f 730.00
1,000.00 1,000.00
Balance b/f 730.00
-
Introduction Journal entries entered into a journal
Small number of transactions General Journal
Large number of transactions Specialised Journals (also called
Subsidiary Books)
Each journal will record transactions of a similar nature
Why?
To have more than 1 person involved in the recording process.
More efficient saves time & effort, since the entries are automatically classified.
-
Subdivision of Journals & Ledgers Journals can be subdivided to: Purchases Journal (or Accounts Payable or
Creditors Journal)
Sales Journal (or Accounts Receivable or Debtors Journal)
Cash Payments Journal
Cash Receipts Journal
Returns Inwards Journal (Sales Returns Journal)
Returns Outwards Journal (Purchases Returns Journal)
General Journal whatever thats not recorded in the above
-
Subdivision of Journals & Ledgers
Ledgers can be subdivided to: Purchases Ledger (Accounts Payable or Creditors
Ledger for individual creditors
Sales Ledger (Accounts Receivable or Debtors Ledger) for individual debtors
Cash Book for all cash/cheque transactions
General Ledger for all other accounts other than the above.
-
Purchases Journal
To record credit purchases, based on purchase invoices.
Purchase invoice is issued by the supplier of goods with details of goods purchased (quantity/amount, price per
unit, total price)
At the end of a regular period (daily/weekly/ monthly), the total of
purchases journal entries are transferred
to the General Ledger.
-
Sales Journal
To record credit sales to customers, based on sales invoices.
Sales invoice is issued by the business to the customer of goods with details of goods sold (quantity/amount, price per
unit, total price)
At the end of a regular period (daily/weekly/ monthly), the total of sales
journal entries are transferred to the
General Ledger.
-
Purchases Returns/Returns
Outwards Journal To record goods returned by a business to
its suppliers.
When goods are returned, the supplier sends a credit note.
Credit note states how much refund the business is entitled to.
At the end of a regular period (daily/weekly/ monthly), the total of
purchases returns entries are transferred
to the General Ledger.
-
Sales Returns/Returns Inwards
Journal To record goods returned by customers to
the business.
When goods are returned, the business issues a credit note to the customer.
Debit note states how much refund the customer is entitled to.
At the end of a regular period (daily/weekly/ monthly), the total of sales
returns entries are transferred to the
General Ledger.