accounts_module 2 books and trial balance

8/13/2019 Accounts_Module 2 Books and Trial Balance

1/18

Process Of Recording Business

Transactions

Step 4: Preparation of final accounts

Step 3: Preparation of Trial Balance

Step 2: Books of Final Entry

Step 1: Books of Original Entry


2/18

ACCOUNTING CYCLE

Step 1 Journalising (the transactions)

Step 2

Posting (to the ledger)

Step 3 Balancing (the accounts in the ledger)

Step 4 Trial Balance

Step 5 Income Statement

Final Accounts

Step 6 Position Statement

Figure showing various steps in the accounting cycle


3/18

Records Maintained By An Organisation

The books of accounts maintained by an organisation may be classifiedinto two as

a. a. Books of Prime / Original Entry

b. b. Books of Second entry / Final entry

Books of Prime / Original Entry

1. Journal

2. Cash Book

3. Subsidiary Books


4/18

JOURNAL / DAY BOOK

Format of a Journal

.

To.

(Being)

Credit

Rs.

Debit

Rs.

Ledger

Folio

ParticularsDate


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C A S H B O O K

Debit: All Cash receipts and Bank receipts and Discount Allowed

Credit: All Cash payments and Bank payments and DiscountReceived.

The cashbook is classified into 4 types viz.,

1. Single column cash book

2. Two columnar cash book

3. Three columnar cash book

4. Petty cash book


6/18

LEDGER

Also called as General Ledger, this is a principal book that contains all

the accounts i.e., accounts of Assets liabilities, capital, revenue and expenses.

The entries from the books of original entry are transferred to this book. Henceit is also called as a book of final entry. There are a number of accounts in a

general ledger. All similar transactions are grouped under one account.

The opening and closing balances will appear only in case of assets,

liabilities and capital accounts but not in case of incomes and expenditures.

Date Particulars Folio Amount

Rs.

Date Particulars Folio Amount

Rs.

To Balance b/d

(Opening balance)

--------

By Balance c/d

(Closing balance) --------

Dr Cr


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Format of a single column cash book

Date Particulars L.F. Amount

Rs.

Date Particulars L.F. Amount

Rs.

To Balance b/d

(Openingbalance)

-------

By Balance c/d

(Closingbalance) -------

Dr Cr


8/18

Format of a double column cash book

Date Particulars L.F Discount

Rs.

Cash

Rs.


Rs.

Cash

Rs.

To Balance

b/d(Openingbalance)

------

By Balancec/d

(Closingbalance)

------

Dr Cr

OR


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Rs.

Bank

Rs.


Rs.

Bank

Rs.

To Balance

b/d(Openingbalance)

------

By Balancec/d

(Closingbalance)

------

Dr Cr

OR


10/18


Date Particulars L.F Cash

Rs.

Bank

Rs.

Date Particulars L.F Cash

Rs.

Bank

Rs.

To Balanceb/d

(Openingbalance)

------

By Balancec/d

(Closingbalance)

------

Dr Cr


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Format of a three columnar cash book

Date Particulars L.F Disco-unt

Rs.

Cash Bank

Rs.

Date Particulars L.F Disco-unt

Rs.

Cash

Rs.

Bank

Rs.

To Balance

b/d(Openingbalance)

------

By Balancec/d

(Closingbalance)

------

Dr Cr

OR


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Petty Cash Book

It is a cash book in which all the petty cash expensesincurred daily by an organisation is recorded.

Dt Particulars CBF Total

Rs.

Dt Particulars Vr.

No

Postage Conveyance Wages Business

Promotion

Total

Rs.

Dr Cr


13/18

PURCHASES BOOK

This is a subsidiary book in which all the credit purchases madeby the organisation is recorded. The monthly total from the purchasebook is transferred to the General Ledger to the Purchases Account.

Date Purchaseinvoice

no.

Name of the supplier LF Details Total Amount

Rs. Ps. Rs. Ps.


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PURCHASE RETURNS BOOK

A book in which all the purchase returns (returns

outwards) are recorded.

Date DebitNote

No.

Name of the supplier LF Details Total Amount

Rs. Ps. Rs. Ps.


15/18

SALES BOOK

The credit sales are recorded in this book. The

monthly totals are transferred to the sales account in the General

Ledger.

Date Salesinvoice

no.

Name of the purchaser LF Details Total Amount

Rs. Ps. Rs. Ps.


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Date CreditNote

No.

Name of the Purchaser LF Details Total Amount

Rs. Ps. Rs. Ps.

SALES RETURNS BOOK

A book of account in which all the sales returns

(returns outwards) made by the organisation are recorded.


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JOURNAL PROPER

Those journal entries that cannot be recorded in anyof the subsidiary books are recorded in the journal proper.

The following are recorded in the journal proper:

a. Opening Entries

b. Closing Entries

c. Transfer Entries

d. Adjustment Entries

e. Rectification Entries


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TRIAL BALANCE

It is a statement that shows the balance in all the accounts in a

ledger. It contains all the debit and credit balances. A trial balance is a list

of debit and credit balances of all the ledger accounts prepared on anyparticular date to verify whether the entries in the books of accounts are

arithmetically correct or not.

Sl.No.

Head of Account LF Debit Balance Credit Balance

Rs. Ps. Rs. Ps.

accounts_module 2 books and trial balance

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