Journal
It is the book of first entry where
all the business transactions are recorded in a book. There are two types of
journals. They are general journal and special journal.
§ General Journals:
It
is also known as journal proper. It is meant for recording all such
transactions for which no special journal is required or kept. General journal
consists of
§ Opening Entries: When a new set of books is started the old A/c has to be bringing
forward from last year book. It is meant for recording these transactions.
Entries are made from Balance Sheet of the last year.
§ Closing Entries: At the end of the
accounting year the nominal account are closed by transferring them to trading
and P&L A/c. Entries posted for this purpose are termed as closing entries.
§
Adjustment Entries: At the end of the accounting year adjustment
entries are to be passed for o/s or accrued entries.
§
Transfer
Entries: It is required for transferring one
account for transferring. Entries for such are passed in transfer entries.
§ Rectification Entries: It is passed rectifying the error which may have been committed in
the books of accounts.
§ Purchase of Fixed Assets: The entries of purchase of fixed assets such as plant, furniture
etc is also passed in this journal.
§ Special Journals
It means
which is meant for special purpose i.e. recording specific business transaction
in a book.
§ Cash Journal: It is meant for recording all cash transactions. It may be further
classified into cash receipt and cash payment. Cash receipt journal records all
the cash receipts while cash payments journal records all cash payments.
§ Goods Journal: The journal is meant for recording all transactions relating to
inventory which is further classified into
· Purchase
Journal: This journal is meant for recording
all credit purchases. Cash purchases are to be recorded in cash journal
· Sales
Journal: This journal is meant for recording
credit sales only not cash sales.
· Purchase Return Journal: it is meant
for recording all return of goods purchased on credit. It is also known as
written outward journal.
· Sales Return Journal: It is meant
for recording all return of goods sold for credit. It is also known as inward
journal.
§ Bills Journal: This journal is meant for recording all bills of exchange or promissory
notes received by business from debtors. It can be classified into Bills Receivables
and Bills Payable.
· Bills
Receivables: It is meant for
recording all bills of exchange or promissory notes received by business from
debtors.
· Bills Payable: It is meant for recording all bills
of exchange or promissory notes issued in the favor of its creditors.
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