books of original entry ( 原始分錄簿 ) and ledgers ( 分類帳 )
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3. Books of Original Entry ( 原始分錄簿 ) and Ledgers ( 分類帳 ). References : Chapter 11-14, 19. AIntroduction. Books to record all the T accounts. The expansion of the business, transactions increase , the numbers of T accounts are numerous. - PowerPoint PPT PresentationTRANSCRIPT
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Books of Original Entry ( 原始分錄簿 ) and Ledgers ( 分類帳 )
References:Chapter 11-14, 19
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A Introduction
Books to record all the T accounts.The expansion of the business, transactions increase, the numbers of T accounts are numerous.Thus the T accounts are classified into 3 Ledgers and 7 Books (Books of Original Entry).
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B Books of Original Entry
1 Sales Journal ( Day Book)2 Purchases Journal (Day Book)3 Returns Inwards Journal (Day Book)4 Returns Outwards Journal (Day Book)5 Cash Book【 Explain later】6 Petty Cash Book【 Explain later】7 Journal【 Explain later】
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Transactions
Classifying the transactions
CreditSales
CreditPurchases
ReturnsInwards
ReturnsOutwards
Cash andcheque receipts
and payment
Others
ReturnsInwardsJournal
SalesJournal
ReturnsOutwardsJournal
PurchasesJournal
Cash Book/Petty Cash
BookJournal
p. 116
Posting to the double entry accounts in the ledgers:
Sales ledgerPurchases ledgerGeneral ledger
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C Ledgers
3 kinds of ledgers:Sales ledger- records each debtor’s T A/CPurchases ledger- records each creditor’s T A/CGeneral ledger - records the rest of the accounts, such as expenses, Fixed assets, capital, etc.
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D Sales Journal and Sales Ledger
D1 Sales JournalRecord all credit salesThere is no debit items in “Sales A/C”, so the “Sales A/C” transforms to a statement( 表 ), i.e, Sales Journal.
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Examples of Sales Journal:
The credit sales transactions in January, 2008 of Green Co. are as follow:Jan 5, sold $500 goods on credit to Rabbit Co. and offered 1% trade discounts* to Rabbit Co.Jan 15, sold $100 goods on credit to Pepper Co. If Pepper Co. pays the debt within 1 month, Pepper can enjoy 2% cash discounts**。Jan 28, sold $500 goods to Pump Co. and offered 1% trade discounts. If Pump Co. pays the debt within 1 weeks, Pump can enjoy 2% Cash discounts.
You are required to prepare:The Sales Journal to record the above transaction.
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*Trade discount: offered to customers to attract large-quantity transactions. Directly deducted from the list price, no double entry is required.
**Cash discounts:Encourage the early repayment of debtsThe entry is recorded at the time of repayment of debts.
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Sales Journal2008 Particular Inv. No. $Jan 5 Rabbit Co 495 15 Pepper Co 100 28 Pump Co 495 31 Transferred to sales A/C 1090
(in General Ledger)
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D2 Sales LedgerAfter recording each transaction in the Sales Journal, the transaction is posted to the Debtors A/C in the Sales Ledger.At the end of month or year, the total of the Sales Journal is posted to the “Sales A/C” in the General Ledger.
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Sales Journal
( Record each credit sales)
Sales A/CCr. $
Debtors: Rabbit Co. Dr. $
General LedgerSales Ledger
Posting each sales
transactions
Posting the total to the Sales A/C
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E Purchases Journal and Purchases Ledger
E1 Purchases JournalRecord all credit purchasesThere is no credit items in “Purchases A/C”, so the “Purchases A/C” transforms to a statement( 表 ), i.e, Purchases Journal.
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Examples of Purchases Journal:The credit purchases transactions of Cucumber Co. in
February 2008 are as follows:Feb 6, bought goods $200 on credit from Celery Co., and received 1% trade discounts.Feb 17, bought $100 goods on credit from Carrot Co. If the debt is repaid within 1 week, 2% cash discounts is offered.Feb 27, bought $200 goods on credit from Spinach Co, and received 1% trade discounts. If the debt is repaid within 1 week, 2% cash discounts is offered.
You are required to prepare:The Purchases Journal to record the above
transaction.
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Purchases Journal2006 Particular Inv. No. $Feb 6 Celery Co. 198 17 Carrot Co.
100 27 Spinach Co. 198 28 Transferred to Purchases A/C
496 (in General Ledger)
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E2 Purchases LedgerAfter recording each transaction in the Purchases Journal, the transaction is posted to the Creditors A/C in the Purchases Ledger.At the end of month or year, the total of the Purchases Journal is posted to the “Purchases A/C” in the General Ledger.
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Purchases Journal
( Record the credit purchases)
Creditors: Celery CoCr. $
Purchases
Dr. $
Purchases LedgerGeneral Ledger
Posting each purchases transaction
Posting the total to the Purchases
A/C
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F Returns Inwards Journal( 銷貨退回簿 )
Customers (Debtors) demand to return goods to our company. When we accept the goods returned, we issue a 【Credit note】 to the customers.Examples:Goods returned to Cucumber Co in March, 2006
are as follows:March 1, Rabbit Co. returned $50 goods to us (After deducted 1% trade discounts). March 10, Pepper Co. returned $10.
You are required to prepare:The Returns Inwards Journal to record the above
transaction.
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Returns Inwards Journal2006 Particular Credit Note No. $Mar 1 Rabbit Co. 50
10 Pepper Co. 1031 Transferred to returns inwards A/C 60
(in General Ledger)
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Returns Inwards Journal
(Record each items in Credit Notes)
Debtors: Carrot Co.
Cr. $Returns Inwards A/C Dr. $
Sales LedgerGeneral Ledger
Posting each returns
transaction
Posting the totalto the returns inwards A/c
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G Returns Outwards Journal
Our company demands to returns the goods to suppliers (Creditors). We issue a 【Debit note】with the goods returns to the suppliers.Examples:Cucumber Co returned goods in March, 2006
are as follows:March 1, returned $20 goods to Celery Co. (After deducted 1% trade discounts). March 5, returned $10 goods to Carrot Co.
You are required to prepare:The Returns Outwards Journal to record the
above transaction.
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Returns Outwards Journal2006 Particular Debit Note No.
$Mar 1 Celery Co. 20 5 Carrot Co. 10 31 Transferred to returns Outwards A/C 30
(in General Ledger)
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Returns Outwards Journal
(Recording each items in Debit Notes)
Returns Inwards A/C
Cr. $ Creditors: Celery Co. Dr. $
General LedgerPurchases Ledger
Posting each transaction in
debit notes
Posting the total to the Returns Outwards A/C
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H Classification of T Accounts T 字帳的分類
Accounts
Nominal Accounts 虛帳戶
Real Accounts實帳戶Creditors
(Purchases Ledger)
Debtors(Sales Ledger)
Records assets
andLiabilitiesin General
Ledger
Recordsexpenses,incomes,
and Capitalin General
Ledger
人名帳戶 PersonalAccounts 非人名帳戶Impersonal
Accounts