Accounting for

Attorneys
AAT323E
2023
 JOURNALS

 Accounting Cycle
 Cash records – Cashbook
 Subsidiary Journals
Text book references
 Accounting for Attorneys
 G Adams, S de lange and A Storm
 Chapter 6
Accounting Cycle
 Transactions - event

 Source documents – documentation use to show transaction having

taken place

 Books of prime entry – recording of transactions

 Ledger Accounts – summary of transactions

 Trial Balance – list of general ledger account balances

 Financial statements – reporting of proft and loss, fnancial position

 Analysis and interpretation – ratio analysis

 Decision making
Purpose of books of prime entry
 Transactions are too many to be able to
record directly into ledger.
 Books of prime entry (journals) allow

transactions of a similar nature to be

grouped together.
 Benefts:
 Serve as a link between source doc and ledger
account
 A chronological record of all transactions is provided
 Possible recording mistakes are reduced
 Distribution of work is facilitated
Cash Records
 3 methods used to record cash transactions:
◦ Cash receipts and cash payments journal for
business money and separate journals for trust
money
◦ Two separate cash books – one for business
money and the other for trust money. We will be
covering this method in our course.
Cash Records
Business Cash Book
 Indicates the fow of cash through the business
bank account (receipts and payments)
 Commences with a debit balance when

favourable and credit balance when in overdraft

 Receipts recorded on left side (debit); source

document – receipt and bank statement

 Payments recorded on right side (credit);

source document – EFT POP and bank

statement
Petty Cash Book
◦ Cash on hand for small payments for expenses
e.g. postage, milk, tea, stationery
◦ IMPREST SYSTEM:
 Cheque is issued to petty cashier at beginning of
month
 Cheque is then cashed and money kept in petty cash
box
 At the end of the month the imprest balance is
restored by issuing a cash chq to the petty cashier
 E.g. if imprest balance is R200 and total payments for
the month add up to R170, then the petty cashier
with receive a chq for R170 to restore the imprest
balance.
General Ledger
 Account
◦ Running record of a specifc group of transactions (e.g. salaries,
rental, lights & water, computer equipment)
◦ Records increases and decreases in the various items
 General ledger (T/Accounts)
◦ LEFT – DEBIT
◦ RIGHT – CREDIT
 What do the columns look like?
 Debit and credit separated by a line
 Columns on each side include:
◦ Date
◦ Details
◦ Folio
◦ Amount