Journalizing , Posting & Balancing
Accounting process starts with the recording of business transactions in terms of money in the primary books of accounts (known as Journal).
1. Date Column shows the date on which the entry was made
2. Particulars Column shows the Journal entry. It shows the accounts that have been Debited and Credited.
3. LF (Ledger Folio) this column shows the Folio number in ledger where this entry has been posted.
4. Debit Column shows the amount that has been debited
5. Credit Column shows the amount that has been crediteed
Entries are recoded using the Golden rules of Accounting.
SUBSIDIARY BOOKS OF ACCOUNT
Subsidiary Books (special Journal ) are the books of original entry (or prime entry ) which are used to record the specific transactions of similar nature for the first time on the basis of source documents. Thus subsidiary Books are part of journal.
1. Facilitate division of work
2. Permit the installation of internal check system,
3. Permit the use of specialized skill .
4. Result in Time and Labour Saving in journalizing and posting
Cash book is as subsidiary book in which all cash transactions concerning. It serves the purpose of Cash Account so a cash book is both journal and ledger.
Types of Cash Books
SINGLE COLUMN CASH BOOK
• It records only Cash Receipts and Cash Payments.
TWO (DOUBLE) COLUMNAR CASH BOOK
• Cash Column is meant for recording cash receipts and payments
• Discount Column is meant for recording discount received and allowed.
• Discount Column on the debit side represents the discount allowed
• Discount Column on the credit side represents the discount received.
THREE COLUMN CASH BOOK
This type of cash book contains the following three amount columns on each side
• Discount column for discount received and allowed;
• Cash column for cash received and cash paid; and
• Bank column for money deposited and money withdrawn from the bank.
• Purchases book is meant for recording the purchase of goods on credit only as it does not record cash purchases. Cash purchases are recorded in cash book
• In the Sales Book, only credit sale of goods are recorded as it does not recordes cash sales. Cash Sales are recorded in Cash book
Once recorded they are classified into secondary book of account known as Ledger. Ledger is the principal book accounts.
These online MCQ Mock tests and MCQ questions includes all main concepts of the chapter in CS foundation Financial Accounting and Auditing.