Introduction to acccounting chapter 3 new

4,058 views
3,652 views

Published on

0 Comments
1 Like
Statistics
Notes
  • Be the first to comment

No Downloads
Views
Total views
4,058
On SlideShare
0
From Embeds
0
Number of Embeds
0
Actions
Shares
0
Downloads
62
Comments
0
Likes
1
Embeds 0
No embeds

No notes for slide

Introduction to acccounting chapter 3 new

  1. 1. BIT 163 INTRODUCTION TO ACCOUNTING CHAPTER THREE
  2. 2. Books of original entry and ledgers <ul><li>Books of original entry: </li></ul><ul><li>Are use to record all the transaction for the first time </li></ul><ul><li>a. Journal </li></ul><ul><li>b. Cash Book </li></ul>
  3. 3. Books of original entry and ledgers <ul><li>JOURNAL </li></ul><ul><li>There are two type of Journal </li></ul><ul><li>General Journal </li></ul><ul><li>Special Journal </li></ul><ul><li>Purchase Journal-use to record purchase of goods on credit </li></ul><ul><li>Sales Journal-use to record sale of goods on credit </li></ul><ul><li>Return Outwards Journal-use to record goods returned to the creditors </li></ul><ul><li>Return Inwards Journal-use to record goods returned by the debtors </li></ul>
  4. 4. JOURNAL General Journal -use to record the transactions that cannot recorded in special journal. -some of the main uses of journal are listed below: The purchase and sale of fixed assets on credit The correction of errors Writing off bad debts Opening entries Transactions such as drawings, additional capital by owner Adjustment of balance day
  5. 5. Format of General Journal           Credit (Cr) Debit (Dr) Folio Details Date General Journal
  6. 6. Explanation <ul><li>Date: to record the date of the transaction </li></ul><ul><li>Details: to record the name of account (s) to be debited and the name of the account (s) to be credited. </li></ul><ul><li>Folio: to record the reference number of ledger. </li></ul><ul><li>Debit: amount (s) to be debited </li></ul><ul><li>Credit: amount (s) to be credited </li></ul>
  7. 7. Special Journal <ul><li>Purchase Journal </li></ul><ul><li>-use to record purchases goods on credit. </li></ul><ul><li>-the purchaser will receive purchases invoices when goods bought on credit. </li></ul><ul><li>-the purchaser enters the details from the invoice in his purchases journal. </li></ul>
  8. 8. Example of Purchase Journal           Amounts Folio Invoice No Details Date Purchase Journal
  9. 9. Purchase Journal <ul><li>Date: use to record date of the transactions. </li></ul><ul><li>Details: use to record name of the creditors. </li></ul><ul><li>Invoice no: use to record the reference number of the invoice. </li></ul><ul><li>Amounts: use to record the final amount of invoice. </li></ul>
  10. 10. Sales Journal <ul><li>To record sales good on credit </li></ul><ul><li>The seller will send sales invoice to debtors when goods sold on credit. </li></ul><ul><li>The sellers enters details from the invoice in his sales journal. </li></ul>
  11. 11. Example of Sales Journal           Amounts Folio Invoice No Details Date Sales Journal
  12. 12. Explanation of Sales Journal <ul><li>Date: use to record date of the transactions </li></ul><ul><li>Details: use to record name of the debtors </li></ul><ul><li>Invoice no: use to record the reference number of the invoice. </li></ul><ul><li>Folio: use to record the number of ledger </li></ul><ul><li>Amounts: use to record the final amount of invoice. </li></ul>
  13. 13. Return Outwards Journal <ul><li>Use to record amount of goods returned to the creditors. </li></ul><ul><li>The purchaser will receive debit note when goods returned to creditors. </li></ul><ul><li>The purchaser enter details from the </li></ul><ul><li>debit notes in his return outwards journal. </li></ul>
  14. 14. Format of Return Outwards Journal           Amounts Folio Debit Notes No Details Date Return Outwards Journal
  15. 15. Explanation of Return Outwards Journal <ul><li>Date: use to record date of the transactions. </li></ul><ul><li>Details: use to record name of creditors. </li></ul><ul><li>Debit notes: use to record the reference number of the debit note. </li></ul><ul><li>Folio: use to record the reference number ledger. </li></ul><ul><li>Amounts: use to record the final amounts of debit notes. </li></ul>
  16. 16. Return Inwards Journal <ul><li>Use to record amounts of goods returned by the debtors. </li></ul><ul><li>The seller will send debit note to the debtors when goods returned by them. </li></ul><ul><li>The seller enters details from debit notes in his return inwards journal </li></ul>
  17. 17. Format of Return of Inwards Journal           Amounts Folio Debit Notes No Details Date Return Inwards Journal
  18. 18. Explanation of Return Inwards Journal <ul><li>Date: use to record the date of </li></ul><ul><li>transactions. </li></ul><ul><li>Details: use to record the name of debtors. </li></ul><ul><li>Debit Notes: use to record the reference number of Debit Notes </li></ul><ul><li>Folio: use to record the reference number of ledger </li></ul><ul><li>Amounts: use to record the final amounts of debit notes. </li></ul>
  19. 19. CASH BOOK <ul><li>Use to record cash and bank transactions. </li></ul><ul><li>Receiving money either by cash or cheque will be recorded in debit side=increase the cash and bank balance. </li></ul><ul><li>Paying money either by cash or cheque will be record in credit side =decreases the cash and bank balance </li></ul><ul><li>Two types of Cash Book as per below: </li></ul>
  20. 20. Two column Cash Book                     Bank Cash F Details Date Bank Cash F Details Date
  21. 21. Three column Cash Book                         Bank Cash Dis F Details Date Bank Cash Dis F Details Date
  22. 22. Three column Cash Book <ul><li>Discounts allowed-cash discounts allowed by a company to its debtors when they pay before maturity or on time. </li></ul><ul><li>Discounts received-cash discounts received by a company from its suppliers when its pay their account before maturity or on time. </li></ul>

×