Get help now

Accounting: Books of Original Entry

  • Pages 9
  • Words 2048
  • Views 695
  • dovnload

    Download

    Cite

  • Pages 9
  • Words 2048
  • Views 695
  • Academic anxiety?

    Get original paper in 3 hours and nail the task

    Get your paper price

    124 experts online

    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.

    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:

    • 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.

    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: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.

    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

    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.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.

    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. E.g. Returned Goods of deserving $ 2000 to M.Caruana on 15 FebDebit 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.

    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.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.

    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. E.g. F. James Returned Goods of worth 1500 sold on10 JanRecognition 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.

    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: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.

    • 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:

    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 the GENERAL JOURNAL.

    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.

    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

    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.ltdThis 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.

    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.

    This essay was written by a fellow student. You may use it as a guide or sample for writing your own paper, but remember to cite it correctly. Don’t submit it as your own as it will be considered plagiarism.

    Need a custom essay sample written specially to meet your requirements?

    Choose skilled expert on your subject and get original paper with free plagiarism report

    Order custom paper Without paying upfront

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

    Hi, my name is Amy 👋

    In case you can't find a relevant example, our professional writers are ready to help you write a unique paper. Just talk to our smart assistant Amy and she'll connect you with the best match.

    Get help with your paper
    We use cookies to give you the best experience possible. By continuing we’ll assume you’re on board with our cookie policy