FUNDAMENTALS OF ACCOUNTANCY,

BUSINESS MANAGEMENT 1

MYRA Q. APOSTADERO
Subject Teacher
LESSON 7

BOOKS OF ACCOUNTS

OBJECTIVES:
1.Identify the uses of the two books of accounts
2.Illustrate the format of general and special journals
3.Illustrate the format of general and subsidiary ledgers
BOOKS OF ACCOUNTS – are records in which all
accounts and transactions of a business are
maintained on a regular books
JOURNAL
Function: as a financial diary.
• It is used to record chronologically all transactions of
a business as they occur.
• It is commonly referred to as the book of original
entry.
ADVANTAGES:
1. It provides a systematic and chronological record of transactions;
2. It simplifies the ledger as some details in the journal need not be written in the
ledger;
3. It provides adequate explanation of each entry and present necessary information
about the transactions;
4. It ensures that the double-entry bookkeeping system is observed when recording
transactions.
5. It helps in solving misunderstanding in business because it serves as proof and legal
evidence of transactions.

TWO TYPES OF JOURNALS

6. Special Journals
7. General Journal
SPECIAL JOURNALS
- are journals used to record recurring
transactions .
- There are four common types of special journals
- Sales Journal
- Purchases Journal
- Cash Receipts Journal
- Cash Disbursements Journal
Sales Journal (SI)
- is a journal used to record sale of merchandise on account
Purchase Journal (PJ)
- is a journal used to record purchase of merchandise on account.
Cash Receipts Journal (CRJ)
- is a journal used to record receipts of cash from whatever source.
Cash Disbursements Journal (CDJ)
- or sometimes known as the cash payments journal (CPJ) is a
journal used to record payments of cash for whatever purpose.
GENERAL JOURNAL
- The general journal (GJ) which looks like a two-columnar notebook, is the
journal used to record all other business transactions not recorded in the
special journals.
LEDGER
- It is a collective record of individual accounts used by a business.
- It is used to sort all entries made in the journal in chronological
order and to group all transactions that affect individual accounts
in order to facilitate the preparation of financial statements.
- It is commonly referred to as the book of final entry as it is where
the recorded transactions can be seen next after going through
the journal.
- it provides the last record of financial information before
financial reports are prepared.
GENERAL LEDGER
- is used to accumulate and classify individual transactions from the journal.
- it divides the account into two sides; the left side and right side.
- Debit information is listed on the left side, while credit information is listed
in on the right side.

SUSIDIARY LEDGER
- is used to provide detailed information about specific ledger account.
- it follows a running-balance type of ledge because it adds a column to
determine the account balance after posting each
transaction.
- this means that just by looking at the subsidiary ledger, the business known
at a glance how much it owes others and how much others owe to it.
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BOOKS OF ACCOUNTS
OBJECTIVES:
1. Identify the uses of the two books of accounts
2. Illustrate the format of general and special journals
3. Illustrate the format of general and subsidiary ledgers
BOOKS OF ACCOUNTS
OBJECTIVES:
1. Identify the uses of the two books of accounts
2. Illustrate the format of general and special journals
3. Illustrate the format of general and subsidiary ledgers