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BOOKKEEPING

Recap: Double Entry Rules


Debit Nature
Expenses
Assets
Drawings
Debit (left) side (+)
Credit (right) side (-)
Normal Balance is a
Debit Balance

Credit Nature
Liabilities
Income
Capital
Debit (left) side (-)
Credit (right) side (+)
Normal Balance is a
Credit Balance

Whats a Normal Balance?

Bookkeeping Process
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Andrew Lee Pg 21

Miko Pg 20

GENERAL JOURNAL
VS
SPECIALISED JOURNALS

Cash Book
Records all receipts and payments of cash and

cheques of a business
Special feature: it is BOTH a book of prime entry
as well as a ledger
Cash Account
Bank Account
Discount Allowed Account
Discount Received Account

Format of 3-Column Cash Book


+

Date

Particulars

Not part of
Double
Entry
System,
just
recording
columns.

Folio

Discount
Allowed

Expense

Cash

Bank

Date

Particulars

Folio

Discount
Received

Revenue

Part of the Double Entry


System

Cash

Bank

Specialized Journals Trading of inventory


[Credit transactions]

Sales Day
Book

Credit
Sales

Purchases
Day Book

Sales
Returns
Day Book

Purchases
Returns
Day Book

Credit
Purchases

Returns
from credit
customers

Returns to
credit
suppliers

Sales Day Book / Journal

Purchases Day Book

Credit Sales

Credit Purchases

Amount shown is net of

Amount shown is net of

trade discount
Source Document:
Invoice (issued)

trade discount
Source Document:
Invoice (received)

Format of Sales Day Book


Date

Invoice
#

Customers /
Receivables
Name of customer

Folio
SL

Total
Amount
XXX

Total to Sales Account

XXXXX

Format of Purchases Day Book


Date

Invoice
#

Suppliers / Payables
Name of supplier

Folio
PL

Total
Amount
XXX

Total to Purchases
Account

XXXX

Returns Day Books


Reasons:

Defective / faulty
Wrong Specification / type / quality / size
Damaged goods
Packing cases / empty bottles / containers

Sales Returns Day Book

Purchases Returns Day Book

Records returns of goods

Records returns of goods

or reduction/allowance in
a customers
(receivables) account
Source Document: Credit
Note (issued)

or reduction/allowance in
a suppliers (payables)
account
Source Document: Credit
Note (received)

Format of Sales Returns Day Book


Date

Credit
Note #

Customers /
Receivables
Name of customer

Folio
SL

Total
Amount
XXX

Total to Sales Returns


Account

XXXXX

Format of Purchases Returns Day Book


Date

Credit
Note #

Suppliers / Payables
Name of supplier

Folio
PL

Total
Amount
XXX

Total to Purchases
Account

XXXX

General Journal
Records transactions that do not fit inside the

cash book and the special journals, in order of


date
Opening and Closing entries
Sales and Purchase of Fixed Assets on credit
Balance Day Adjustments
Correction of Errors
Drawings of goods for personal use

Format of General Journal


Date

Particulars

DR ($)

Drawings

40

Purchases
(Inventory drawn out by owner)

CR ($)

40

Bookkeeping Process

Statement of Profit or Loss (P/L)


Also known commonly as the income statement
Trading Account
Gross Profit /Loss
Gross Profit(Loss) = Net Sales Cost of Goods Sold
Cost of Goods Sold = Beginning Inventories

+ Cost of Purchases

- Closing Inventories
Cost of Purchases = Net Purchases

+ Carriage In

+ Custom Duty
Profit & Loss Account
Net Profit/Loss
Net Profit = Gross Profit + Other Income Operating
Expenses

Statement of Financial Position


Also known commonly as the Balance
Sheet
This is a summary statement of the Accounting Equation

Assets = Capital + Liabilities

Sales
Less: Sales Returns
Net Sales
Less: Cost of Goods Sold
Opening Inventories
Purchases
Less: Closing Inventories
Gross Profit
Add: Disc. Recd
Less: Operating Expenses
Sundry Expenses
Disc. Allowed
Net Profit

$
1,820
(60)
1,760

4,800
2,109
(5,500)
1,409
351
250
187
5
(192)
409

Non-Current Assets
Furniture
Current Assets
Inventories
Receivables
Cash

$
5,266

5,500
2,130
3,743
11,373
16,639

Equity
Capital 1 Jan
Add: Net Profit (from IS)
Less: Drawings
Capital 31 Dec
Non-Current Liability
Loan - Sime
Current Liabilities
Trade Payables
Other Payables
Bank Overdraft

2,202
409
(627)
1,984

7,000

2,136
2,800
2,719
7,655
16,639

Petty Cash Imprest System

Imprest/Float $500

$21.50
Payment
Voucher
+ receipt
$21.50

Remaining Cash
$135

Payment Vouchers
totalling $365

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