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Books of Account

The document outlines the purpose and types of books of accounts used in business to record monetary transactions, which are essential for generating financial statements. It describes the journal as the book of original entry and the ledger as the book of final entry, detailing their respective functions and types. Additionally, it explains the concepts of simple and compound journal entries, as well as the distinction between special and general journals.

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Jocelyn Reyes Gabe
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2 views14 pages

Books of Account

The document outlines the purpose and types of books of accounts used in business to record monetary transactions, which are essential for generating financial statements. It describes the journal as the book of original entry and the ledger as the book of final entry, detailing their respective functions and types. Additionally, it explains the concepts of simple and compound journal entries, as well as the distinction between special and general journals.

Uploaded by

Jocelyn Reyes Gabe
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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BOOKS OF ACCOUNT

2
The books of accounts are used to record events transpiring in
the course of the business.

These events or transactions are inflows and outflows of


monetary activities that a business normally does its day-to-day
operation.

These events are the summarized, analyzed and converted into


financial reports termed as financial statements.

These books of accounts are registered with the Bureau of


Internal Revenue (BIR) for compliance and monitoring purposes.

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3 TWO MAJOR TYPES OF BOOKS OF
ACCOUNT

JOURNAL LEDGER
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JOURNAL

In recording the business


Is referred to as the book of transactions to a journal,
original entry. It records the bookkeeper or
business transaction in accountant will use the
chronological order or order Journal entry. This journal
of date using the principle of entry will also include a
“debit and credit”. short explanation on the
nature of transaction.

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ry 23, 2025
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When a transaction has one debit and one


credit , it is called simple journal entry.

When a transaction has one debit and two or


more credits or two or more debits and one
credit or two or more debit and two or more
credits, it is called compound journal entry.

A double entry accounting is a method of


accounting that involves recording of
transactions wherein two accounts are
affected, one is debited, and the other is
credited. This method maintains the
accounting equation that both sides of the
accounting equation remain equal.
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TWO TYPES OF JOURNAL

Special Journal General Journal

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7 Special Journals
 These are designed to simplify the process of classification and summarization of
accounts from transactions.

A. Sales journal- this is a special journal that is used to record sales of


goods or services on credit ( w/c is receivables from customers).

B. Purchase Journal – record all purchase transactions w/c are on credit


(payable to suppliers.

C. Cash Disbursement Journal – record cash payment of expenses and


payables

D. Cash receipts journal – to record cash sale of goods or services and


cash collections of receivables from customers.
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General Journal
 This is journal is used
to record transactions
using the Journal
voucher system that
cannot be recorded in
the special journals.

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LEDGER

 Is a book of financial
accounts that reflects
the financial effects of
the business
organization’s
transactions after they
9 are posted or recorded
to the various journals.
This is also called the
Book of Final entry.
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Two basic types of


ledgers

 General Ledger
 Subsidiary
Ledgers

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General ledger

 This summarizes the


activity for each of the
organization’s accounts
from the journals. This
is the book where the
entries from various
journal are being
posted.
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Subsidiary ledger

 These are the details of


various accounts like
accounts receivable and
accounts payable that are
kept separately to provide
better control of accounts in
the general ledger that need
extensive monitoring.
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