The document discusses the journal, which is the original book of entries where all business transactions are first recorded. It provides advantages of using a journal such as having all transactions recorded in one place chronologically, including narrations to explain each entry. The journal helps ensure accurate posting to ledger accounts and allows for errors to be rectified. Various types of subsidiary journals are described that can be used for specific transaction types depending on the business. Key differences between trade and cash discounts are also outlined.
Control accounts the account which represents a particular sub ledger, sales ledger and purchases ledger control accounts.
At the end of an accounting period the accounts are balanced off and a trial balance prepared to check the accuracy of the book keeping entries. If a trial balance fails to balance this usually indicates that an error or errors may have been made and needs to be identified. As the business expands the accounting requirements increase which may lead to more errors occurring which are very difficult to find.
These Are Accounting Notes For O levels For Both Paper 1 And Paper 2 But It is best For Paper1 as it lacks some Formats But still Free And Best .................
Definition of accounting, what is accounting cycle? And how to record business transactions, it consist on various series which started from journal entries, ledger, and trial balance. key terms of accounting. The Accounting Rules of debit and credit, Debit money, assets and liabilities, Bad Debits, Balance Sheet, Double-entry, bad debts, inventory, Expenses, depreciation , Accumulated Depreciation , types of ledger account, categories of general ledger account, Assets and Liabilities, Owners’ Equity, Revenue Expansion of the Basic Equation and Expense, and examples.
Control accounts the account which represents a particular sub ledger, sales ledger and purchases ledger control accounts.
At the end of an accounting period the accounts are balanced off and a trial balance prepared to check the accuracy of the book keeping entries. If a trial balance fails to balance this usually indicates that an error or errors may have been made and needs to be identified. As the business expands the accounting requirements increase which may lead to more errors occurring which are very difficult to find.
These Are Accounting Notes For O levels For Both Paper 1 And Paper 2 But It is best For Paper1 as it lacks some Formats But still Free And Best .................
Definition of accounting, what is accounting cycle? And how to record business transactions, it consist on various series which started from journal entries, ledger, and trial balance. key terms of accounting. The Accounting Rules of debit and credit, Debit money, assets and liabilities, Bad Debits, Balance Sheet, Double-entry, bad debts, inventory, Expenses, depreciation , Accumulated Depreciation , types of ledger account, categories of general ledger account, Assets and Liabilities, Owners’ Equity, Revenue Expansion of the Basic Equation and Expense, and examples.
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Recording of Business Transactions. Defination of Journal...Blogger
Recording of Business Transaction
Recording of Business transaction is vital to a business's financial statements and a key responsibility of the accounting department. Learn the definition of a transaction, understand the importance of recording transactions, and explore the process of double-entry accounting, with examples of credits and debits
Meaning of Journal
The journal or journal is the primary or basic book of the traders. This is the register in which all business transactions are entered date wise. In this, the accounts are made in the same order in which the transactions have taken place in the business. The word 'Journal' is derived from the French word 'Jour' which means day book, diary or 'day'. It is called 'Day' or 'Din' or 'Rose' in Hindi. By adding nal in Jour, a Journal was created, whose Hindi translation is 'Roznamcha'. Therefore, Journal or Roznamcha means daily account. Since in this the transactions are recorded from the Waste Book or the Remembrance Book (or Commemorative Book), so it is also called the Permit Book. Thus, since entries are made in it every day according to date, hence it is also called daily register or daily record.
Thus, Journal is that book in which initial accounting of both the aspects of all business transactions is done date wise and according to the rules. Therefore, according to a learned writer, “The book in which all business transactions are written in a systematic manner in the beginning, it is called journal
Definition of Journal
"The journal or 'daily record' is that book of primary entries in which date wise transactions are recorded from the memory book or the junk itself. While writing the entries, they are in the form of debit and credit. It is classified, so that later it is convenient to do correct posting in the ledger. "
BASIC ACCOUNTING FOR ALL INCLUDING MANAGERS. ACCOUNTING, DOUBLE ENTRY SYSTEM, JOURNEL (defination,advantages/limitations, how to make,) TRAIL BALANCE(defination,limitations/advantages, steps}
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Basic Ledger. Definition Of Ledger,Types & Example Of LedgerBlogger
Basic Ledger
After making entries of the transactions in the ‘Ledger‘ and the subsidiary books, the transactions are written in the ‘Ledger‘, classifying them into different accounts.
Meaning and Definition of Ledger
The ‘ledger‘ is the principal book of the business and the merchant, in which all the transactions taking place in the business are summarised and classified. In this, the transactions related to each party for a certain time are written at one place, which is called the account of that party. The purpose of doing this is to get information about the status of transactions related to an account at a given point of time. In short, ledger presents a summary of business transactions relating to a given period of time. Life
All personal, real and non-real accounts are kept in the ledger. In the traditional ledger, usually one page is maintained for each account, but if the business is large, two or more pages can be kept for one account as required. Conversely, multiple accounts can be created on the same page if the number of articles is small.
Generally, the ledger is in the form of a bound book or loose sheet book or register. The page number is printed on each of its pages. An index is maintained on the first pages of the register, which tells which account is on which page, where the computer is being used, the location of the ledger, floppy diskettes or CDs or It has been replaced by RCDs or DVDs or other similar technology.
Types of Ledger Sub – decision of Ledger
When the transactions are more and more extensive, it becomes necessary to sub-divide the ledger into several books. The sub-division of the ledger depends on the nature and size of the business entity
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4. RECORD BOOK
INTRODUCTIONS
When the business transactions take
place, the first step is to record the
same in the books of original entry or
subsidiary books or books of prime or
journal. Thus journal is a simple book
of accounts in which all the business
transactions are originally recorded in
chronological order and from which
they are posted to the ledger accounts at
any convenient time. Journalsing refers
to the act of recording each
transaction in the journal and the form
in which it is recorded, is known as a
journal entry.
5. ADVANTAGES OF JOURNAL:
Journal is original book of entries in which we record first time all
business transaction thoroughly. It advantages are given below :-
1) Journal provides records of all business transactions in one place on
the time and date basis.
2) All transactions are recorded on the basis of receipts or bill, so we
can check authenticity of each journal entries with their bills.
3) There is minimum chance to avoid any particular transaction
because in journal transactions are recorded date basis.
4) Accountant writes every journal entry’s narration bellow of that
journal entry, so other auditor can know what the reason of that
journal entry is.
6. 5) In journal, every transaction is recorded after deep analysis of two
accounts on the basis of double entry system, so there is minimum
chance of mistake in journal.
6) Journal is the basis of posting in ledger accounts. With making of
journal, accountant can not make ledger accounts.
7) If there is mistake in ledger, we can rectify it with the help of
journal or rectify journal entry in journal.
8) All opening journal entries , closing journal entries and all other
transactions which is not recorded in any other subsidiary books ,
will be recorded in journal
9) Journal is also needed in every type of accounting software . These
accounting software can make auto system of posting journal entries
by their automatic processing , but accountant must feed journal
entries in journal and other specific vouchers of journal .
10) In journal , there is one column of ledger folio . It is very
important for checking reference of each account's posting with its
original journal entry .
8. The journal has five columns, viz. (1) Date; (2) Particulars; (3) Ledger Folio;
(4) Amount (Debit); and (5) Amount (Credit) and a brief explanation of the
transaction by way of narration is given after passing the journal entry.
(1) Date: In each page of the journal at the top of the date column, the
year is written and in the next line, month and date of the first entry
are written. The year and month need not be repeated until a new page
is begun or the month or the year changes. Thus, in this column, the
date on which the transaction takes place is alone written.
(2) Particulars: In this column, the details regarding account titles
and description are recorded. The name of the account to be debited is
entered first at the extreme left of the particulars column next to the
date and the abbreviation ‘Dr.’ is written at the right extreme of the
same column in the same line. The name of the account to be credited
is entered in the next line preceded by the word “To” leaving a few
spaces away from the extreme left of the particulars column. In the
next line immediately to the account credited, a short about the
transaction is given which is known as “Narration”. “Narration” may
include particulars required to identify and understand the
transaction and should be adequate enough to explain the transaction.
9. (3) Ledger Folio: This column is meant to record the
reference of the main book, i.e., ledger and is not filled in
when the transactions are recorded in the journal.
The page number of the ledger in which the accounts are
appearing is indicated in this
column, while the debits and credits are posted o the
ledger accounts.
(4) Amount (Debit): The amount to be debited along with
its unit of measurement at the top of this column on each
page is written against the account
debited.
(5) Amount (Credit): The amount to be credited along with
its units of measurement at the top of this column on each
page is written against the account credited.
11. SUB-DIVISION OF JOURNAL
When innumerable number of transactions takes place, the journal,
as the sole book of the original entry becomes inadequate. Thus, the
number and the number and type of journals required are
determined by the nature of operations and the volume of
transactions in a particular business. There are many types of
journals and the following are the important ones:
1. Sales Day Book- to record all credit sales.
2. Purchases Day Book- to record all credit purchases.
3. Cash Book- to record all cash transactions of receipts as well as
payments.
4. Sales Returns Day Book- to record the return of goods sold to
customers on credit.
5. Purchases Returns Day Book- to record the return of goods
purchased from suppliers on credit.
6. Bills Receivable Book- to record the details of all the bills received.
7. Bills Payable Book- to record the details of all the bills accepted.
8. Journal Proper-to record all residual transactions which do not
find place in any of the aforementioned books of original entry.
12. Journal is subdivided into various parts
known as subsidiary books or
subdivisions of journal. Each one of the
subsidiary books is a special journal and
a book of original or prime entry. There
are no journal entries when records are
made in these books. Recording the
transactions in a special journal and then
in the ledger accounts is the practical
system of accounting which is also
referred to as English System. Though
the usual type of journal entries are not
passed in these sub-divided journals, the
double entry principles of accounting are
strictly followed.
13. KINDS OF SUBSIDIARY BOOKS
There are different types of subsidiary books which are commonly
used in any big business concern. They are:
Purchases Book
Sales Book
Purchases Returns Books
Sales Returns Books
Bills Receivable Books
Bills Payable Books
Journal Proper
Cash Book
14. Journal Proper
This book is used to record all the residual transactions which
cannot find
place in any of the subsidiary books. While recording, the
entries are made in the journal covering both the aspects of the
transaction. The following are some of the examples of
transactions which are entered in this book.
1. Opening entries and closing entries.
2. Adjusting entries
3. Transfer entries from one account to another account.
4. Rectification entries.
5. Bills of Exchange Entries
6. Credit Purchase/sale of an asset other than goods.
15. Trade discount
When a customer buys goods regularly or buys large
quantity or buys for a
large amount, the seller is usually inclined to allow a
concession in price. He will calculate the total price
according to the list of catalogue. But after the total is
arrived at, he will make a deduction 5% or 10% depending
upon his business policy. This deduction is known as
Trade discount.
Cash Discount
An amount which is allowed for the prompt settlement of
debt arising out
of a sale within a specified time and calculated on a
percentage basis is known as cash discount, i.e., it is
always associated with actual payment.
16. Difference Between Trade Discount and Cash Discount
Trade discount Cash discount
Trade Discount Cash Discount
It is given by the manufacturer or the
wholesaler to a retailer and not to others.
It may be allowed by seller to any
debtor.
It is allowed on a certain quantity being
purchased.
It is allowed on payment being
made before a certain date.
It is a reduction in the catalogue price of
an article.
It is a reduction in the amount due
by a debtor.
It is not usually accounted for in the
books since the net amount (i.e. after
deducting discount) is shown.
This discount must have to be accounted
for in the books since it is deducted from
the gross selling price.
It is allowed only when there
is a sale either cash or credit.
It is allowed only when there is cash
receipt or cash payment including
cheques.
It is allowed or not allowed according to
sales policy followed by a business
concern.
It is allowed only on condition. The
dues should be paid within the stipulated
time. If not, the debtor is not eligible for
cash discount.
17. Why Journal is called the book of original entry ?
The word journal has been derived from the
French word "Jour" Jour means day. So, journal
means daily. Transactions are recorded daily in
journal and hence it has named so. As soon as a
transaction takes place its debit and credit aspects
are analyses and first of all recorded
chronologically (in the order of their occurrence)
in a book together with its short description. This
book is known as journal. Thus we see that the
most important function of journal is to show the
relationship between the two accounts connected
with a transaction. This facilitates writing of
ledger. Since transactions are first of all recorded
in journal, so it is called book of original entry or
prime entry or primary entry or preliminary entry,
or first entry.