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Books of original entry

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Table OF CONTENT

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  • Introduction

Pg 2

  • Books Of Original entry
  • Gross saless Journal

Pg 2

  • Purchase Journal

Pg 4

  • Purchase Return Day Book

Pg 5

  • Gross saless Return Day Book

Pg 6

  • Cash Book

Pg 8

  • General Journal

Pg 10

  • Decision

Pg 11

  • Referencing

Pg 12

  • BOOKS OF ORIGINAL ENTRY

Introduction:

The Books of original entry are known as the books which consider the really first entry of a dealing. Auxiliary book or Primary entry is other known names for these books. All the minutess of a concern are recorded in the subordinate books and if non so in the diary, and therefore with the information provided by both Ledger Accounts are prepared.

Books of premier entry have many advantages towards the house, foremost on a regular basis the minutess are recorded and the sums of the diaries are posted in the Ledgers on a regular basis every month because if all the minutess were to be recorded in the Ledgers opportunities of mistakes would be high so with the aid of subordinate books information can accurately be recorded and besides posting of entries become easier, secondly everything would be cluttered and without books of premier entry the procedure would be really clip devouring besides fixing accurate Fiscal statements would be highly difficult and impossible in conclusion, descriptions or information of minutess can easy be accessible, so Books of original entry play a really important map in the smooth running of the concern.

In figure there are6 books of original entry:

  1. Gross saless Journal, It is a diary which records the non hard currency gross revenues i.e. , the recognition gross revenues. All the information is taken from the gross revenues bills issued for each recognition sale to a client. The gross revenues diary is besides known as the Gross saless twenty-four hours book.

It is merely used in manual accounting system since in computerized systems automatically all client bills are totaled through the accounting software’s and the demand of fixing a gross revenues twenty-four hours book is non necessary. From the gross revenues bill inside informations are recorded in the Gross saless Day Book in 5 columns which are:

Date

Invoice Number

Customer Name

Pagination

Sum

  • From the Sale invoices the day of the month, invoice figure and the name of client is recorded in the Gross saless Day Book along with the entire sum invoiced and besides a column of pagination, which shows a mention between the Gross saless ledger and diary.
  • The procedure of recording is really simple and easy to understand all the recognition gross revenues of the twenty-four hours are listed and totaled in the gross revenues twenty-four hours book and credited to the gross revenues history and the clients to whom the goods are sold are debited with their names and the peculiar sums.

Debit

Debtors Account in the Gross saless Ledger

Recognition

The Gross saless Account in the General Ledger

  • So the sum is transferred to theGross saless Accountand the entry is besides posted in the Gross saless Control Account inorder to tally with the underlying Gross saless Ledger.
  • E.g. Sold Goods on Credit to Richard on 5 February and D.Jones on 9 February worth $ 800 and $ 1200.
  • Debit Richard $ 800

Recognition Gross saless $ 800

  • Debit D.Jones $ 1200

Credit $ 1200

Gross saless Day Book

Date

Invoice Number

Customer Name

Pagination

Entire Amount Invoiced

Feb 5

002346

Richard

Shining path

800

Feb 9

002347

D.Jones

Shining path

1200

2000

  • This is how a peculiar dealing is entered in the Gross saless Day Book. As the goods are being sold to Richard and D.jones the receiving systems are debited and as the concern earns gross i.e. gross revenues it will be credited. At the terminal of the month similar entries are noted and taking this entry into consideration the sum of 2000 at the terminal will be transferred to the Gross saless Ledger Account as a individual entry on the recognition side.
  1. Purchase Journal,It is besides known as the purchase twenty-four hours book. This book of original entry is maintained to enter the recognition purchases merely the hard currency purchases are non recorded in it. The entries in the book are recorded on day-to-day footing from the Purchase invoices received under the headers of the 5 columns in purchase twenty-four hours book:

Date

Name of Supplier

Invoice Number

Ledger Folio

Sum

  • From the purchase bills, the bill day of the month, figure and the name of provider is recorded in the Purchase Day Book along with a entire value of Purchases and a leger pagination which provides a mention in both the Purchase leger and the diary that the poster is completed.

Debit

The Purchase Account in the Purchase Ledger

Recognition

Creditor’s Personal Account in the General Ledger

  • As the Purchase Day Book is non portion of the dual entry theoretical account, the dual entry will now be followed as all the recognition Purchases are posted one by one on the creditor’s ( providers ) personal history in the Purchase Ledger. And at the terminal of each month the purchase twenty-four hours book is totaled, and the entire sum is posted on the debit of Purchases Account in the General Ledger.
  • E.g. Purchases of an equipment deserving $ 20,000 on recognition from Arman & A ; Sons on the day of the month 10 March

Debit Equipment $ 20,000

Credit Supplier $ 20,000

Purchase Day Book

Date

Supplier

Invoice No.

Ledger Folio ( L.F. )

Entire Amount Invoiced

March 10

Arman & A ; Sons

002348

PL 15

20,000

  • This is how a typical entry for any Purchase by the house is posted on the Purchase Day Book, All the item information noted from the purchase bill and at the terminal likewise like this dealing all the minutess are recorded and the entire sum assume of 20,000 is posted as a individual entry on the debit side of the Purchase Ledger. And the providers ( Arman & A ; Sons ) are credited to their personal history in the General Ledger.
  1. Purchase Return Day Book,Purchase return book or registry is the 1 in which minutess sing the goods which are returned to the providers are recorded. It is besides termed as a Return outward, these goods are returned either because they are damaged or non up to the criterion of what the concern wants. When this Return Outwards takes topographic point a Debit note is sent to the provider giving inside informations about the good and ground for returning.
  • Debit notes are largely concerned about mistakes of undercharge, they are prepared merely like the bills and present as verifiers for the entries demoing that the peculiar sum is being debited to the providers account as they are having goods.

Debit

Every Creditor’s Personal Account in Purchase Ledger

Recognition

Return Outwards Account in the General Ledger

  • Debit notes are listed in Return Day Book. And so are used to post points in the Ledgers. All the sums of debit notes are debited separately to the personal histories of the providers in the Purchase Ledger. And at the terminal of period the sum of Return Outwards Day Book is posted on the recognition side of Return Outwards Account.
  • E.g. Returned Goods of deserving $ 2000 to M.Caruana on 15 Feb

Debit M.Caruana $ 2000

Credit Return Outwards $ 2000

Purchase Return Day Book

Date

Particulars

D/N ( debit note )

Ledger Folio

Entire Amount

Feb 15

M.Caruana

PR 6

2000

  • This is how a typical entry of Return outward is posted in the Purchase Return Day book, the format is similar but a column of debit note would be included to avoid any mistakes, all the dealing in a month are noted such as this peculiar one and at the terminal sum of 2000 posted on the recognition side of Purchase Return Account as the goods are traveling out of the concern, and the creditor ( M.Caruana ) is debited in the Purchase Ledger.
  1. Gross saless Return Day Book,Sale Return registry or book is the antonym of Return outwards, and it is termed as Return Inwards, this book records the minutess sing the goods which our clients return to the concern because of any default or harm in the goods, when the Sellerss agree to take back goods and return the sum paid or some portion of the sum the purchaser paid, a papers known as Credit note will be sent to client.
  • Recognition notes are prepared by the concern to demo the existent sum at which the goods were sold and what must be deducted from that entire sum. These Credit notes normally are used to rectify any mistakes from the overcharge.

Debit

Return Inwards Account in the General Ledger

Recognition

Every Debtors Personal Account in the Gross saless Ledger

  • Recognition notes are listed in Return Inwards twenty-four hours book. And the points so are posted in the Ledgers ; One by one the sums of recognition notes are credited to the histories of clients in the Gross saless Ledger. And the sum of the Return Day Book is posted at the terminal of the period to the debit of Return Inward Account.
  • E.g. F. James Returned Goods of worth 1500 sold on10 Jan

Debit Return Inwards $ 1500

Credit F.James $ 1500

Gross saless Return Day Book

Date

Particulars

C/N ( Credit note )

Ledger Folio

Entire Amount

Jan 10

F.James

SR 45

1500

  • This is how a typical dealing of Return Inwards posted in the Gross saless Return Day Book ; the lone difference that there is one column which is non in other books that is of Credit note. Similarly like other books this book’s entire suppose of 1500 at the terminal of the month will be posted as a individual entry on the debit side of Return Inwards Account, and all the debitors ( F.James ) will be posted on the peculiar personal history in the Gross saless leger.
  1. Cash Book,The Cash book is a typical book of original entry, which is a diary but for hard currency and bank it acts like an history which needs to be balanced and this is the lone subordinate book which is portion of the dual entry theoretical account. Mostly concern minutess are done in Cash, such as hard currency payments, hard currency gross revenues, hard currency purchases etc are all recorded in the Cash Book, this book serves the intent more of a leger although it is a diary. It besides has a alone format, where the payments and grosss column stand side by side. There are four types of Cash book:
  • Single column Cash Book
  • Double Column Cash Book
  • Three Column Cash Book
  • Junior-grade Cash
  • Single Column Cash book is besides known every bit simple hard currency book, but both individual and dual column hard currency books are non used in these yearss although, Three column cashbook and junior-grade hard currency book are still used.
  • This Cash book is besides used as a book of premier entry for Cash Discounts, Any sort of price reduction given by concern to the clients when the wage their histories rapidly it is termed as Discount Allowed and it is debited in the hard currency book in a separate column besides with hard currency and bank, and any sum of price reduction given to us by the providers when concern wages what is owed to them rapidly is known as Discount Receivable which is recorded on the recognition side of the hard currency book.
  • In a dual column hard currency book the column for history is split into 2 columns the Cash and Discount, and in a three column hard currency book as the names says the sum column is divided into 3 columns which are for Cash, Bank and price reduction.
  • E.g. In 20×8 the undermentioned minutess took topographic point in Toolmakers.ltd. during the month of September, demo how these minutess be recorded in the Three Column Cash Book:

20×8 Sept 1. Banked Sr.50 of the hard currency held by concern

20×8 Sept 7. Paid Wagess in hard currency worth Sr.200

20×8 Sept 12. Cash Gross saless deserving Sr.102

CASH BOOK ( Three Column )

Date

20X8

Particulars

Sum

Date

Particulars

Sum

Cash

Bank

Disc.

Cash

Bank

Phonograph record

Sept 1

Cash

50

Sept

1

Bank

50

Sept 12

Gross saless

222

Sept 7

Wagess

100

Sept 30

Balances c/d

72

50

222

50

222

50

Oct 1

Balances b/d

72

50

  • This is how hard currency dealing are recorded in the hard currency book, foremost taking into consideration the first dealing hard currency is banked so the Asset of Cash is credited i.e. the hard currency history represented by hard currency column and as the Asset of Bank is increased it will be debited in the hard currency book. Second the rewards are an disbursal the money is traveling out therefore it will be credited in the hard currency book in the Cash column. And so hard currency gross revenues, as hard currency is increasing it will be debited in the hard currency book in the Cash column. Last the shutting balances which are the difference between the payments and grosss will be the gap balances for the following month.
  1. General Journal,It is a diary which records all the entries for minutess where there is no other book of premier entry for entering, all dealing have to be recorded in one of the subordinate book before being posted into the leger histories. In the subordinate books it is comparatively easy to enter a dealing as by the names it is understood which book would incorporate the points for e.g. all the recognition purchases are in the Purchase Journal. But the other points which do non travel through the other five books are normally less frequent and more complicated to enter by the book keeper and if the entries are straight made to the legers it could be cluttered and impossible to understand and therefore such entries are recorded in theGENERAL JOURNAL.

  • Some of the points which are recorded in the general diary are:
  • Writing off bad debts
  • Purchase and sale of Fixed Asset
  • Transportation between histories
  • Correcting of posting mistakes
  • Opening Entries ( this is done when no room in bing leger is left and balances of histories are transferred to new legers )
  • Adjustments to any entries of legers.
  • Depreciation Entries
  • E.g.Purchase of Fixed Asset

A machine is bought on recognition from toolmakers ltd for Sr 750 on1 July 20×6

Debit Machinery……………………750

Recognition Toolmakers Ltd………………………750

The General Journal

Date

Detailss

Pagination

Dr

Chromium

20×6

July 1

Machinery

Toolmakers

Purchase of machine on recognition, Capital purchase bill No 5/189

GL 1

PL 75

750

750

  • This is how a dealing is recorded in the general diary ; it is merely a sort of diary which states what has to be debited and credited and so depict the nature of the dealing which occurred, as shown above.
  • The above dealing involves buying an plus, as it will increase the value of assets it will be debited and the dual entries would be completed by crediting the company toolmakers.ltd

Decision

Fixing the Books of premier entry help a house to enter the really first minutess that take topographic point in a comprehendible mode, this helps to conveniently indicate and separate similar nature minutess which saves clip and for concerns particularly in the accounting section truth of histories is mandatory as it determines the fiscal wellness of a company and this can be achieved by keeping the subordinate books.

  • Mentions:
  • hypertext transfer protocol: //books.google.com.sa/books? id=pylpBtkP3cAC & A ; pg=PA491 & A ; dq=books+of+original+entry+in+accounts & A ; hl=en & A ; sa=X & A ; ei=pdrrUvrNB6S27QaeloGABA & A ; ved=0CD8Q6AEwBA # v=onepage & A ; q=books % 20of % 20original % 20entry % 20in % 20accounts & A ; f=false
  • hypertext transfer protocol: //happyaccountant.wordpress.com/2007/06/19/purchase-day-book-and-purchases-returns-day-book/
  • hypertext transfer protocol: //www.slideshare.net/Ashish_Gairola1990/presentation-of-subsidiary-books
  • hypertext transfer protocol: //www.accountingtools.com/questions-and-answers/what-is-the-sales-day-book.html
  • hypertext transfer protocol: //www.sac-malta.org/Documents/Subject/Accounts/Form3/ch7.pdf
  • hypertext transfer protocol: //www.wisegeek.com/what-are-subsidiary-books.htm
  • Business Accounting, Frank wood & A ; Alan Sangster, 9Thursdayedition.
  • CAMBRIDGE AS & A ; ALEVEL ACCOUNTING, Harold Randall

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Cite this Books of original entry

Books of original entry. (2016, Nov 28). Retrieved from https://graduateway.com/books-of-original-entry/

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