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Fundamentals of Accountancy, Business, and Management 2: Prepared By: Mark Vincent B. Bantog, LPT

The document discusses accounting books and ledgers. It explains that the journal is a chronological record of transactions that shows debits and credits, while the ledger organizes accounts and is used to prepare financial statements. Transactions are recorded using double-entry bookkeeping, with equal debits and credits. Specific journals like the general journal, sales journal, purchases journal, cash receipts journal and cash disbursements journal are introduced. T-accounts are used to track account balances in the ledger.

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58 views15 pages

Fundamentals of Accountancy, Business, and Management 2: Prepared By: Mark Vincent B. Bantog, LPT

The document discusses accounting books and ledgers. It explains that the journal is a chronological record of transactions that shows debits and credits, while the ledger organizes accounts and is used to prepare financial statements. Transactions are recorded using double-entry bookkeeping, with equal debits and credits. Specific journals like the general journal, sales journal, purchases journal, cash receipts journal and cash disbursements journal are introduced. T-accounts are used to track account balances in the ledger.

Uploaded by

Sherlock Holmes
Copyright
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We take content rights seriously. If you suspect this is your content, claim it here.
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Fundamentals of

Accountancy,
Business, and
Management 2
Prepared by:
MARK VINCENT B. BANTOG, LPT
CHAPTER 1: Accounting Books – Journal and
Ledgers

 Objectives:
 Differentiate the journal from the ledger.
 Understand the purpose of the journal and
the ledger.
 Prepare journal entries to record business
transactions.
 Determine the balances of accounts using the
T-account.
 What is the Accounting Equation?

Assets = Liabilities + Owner’s Equity

“the most basic tool of accounting”


The Double-Entry System
 Dual effects of a business transaction is recorded.

Debit (dr.) Credit (cr.)

xx xx
 a chronological record of the entity’s
transactions
 shows all the effects of business
transaction in terms of debits and credits
 book of original entry
 general journal is the simplest journal
GENERAL JOURNAL

Date Account Titles and Explanation P.R. Debit Credit

 It discloses in one place the complete effects of a transaction.


 Provides chronological record of transactions.
 It helps to prevent or locate errors.
Assume that on February 14, 2019, Mr. Nilo Co invested
P1,200,000 to open his business, Nilo Co Moving On Shipping. The
journal entry follows:

GENERAL JOURNAL

Date Account Titles and Explanation P.R. Debit Credit

2019

Feb. 14 Cash P 1,200,000

Co, Capital P 1,200,000

Initial Investment
February 14 Acquired vehicle for P950,000.
March 1 Purchased office equipment for P 150,000; paying
P 80,000 in cash and the balance next month.

GENERAL JOURNAL

Date Account Titles and Explanation P.R. Debit Credit

2019
Feb. 14 Vehicle P 950,000
Cash P 950,000
Acquisition of vehicle

Mar. 1 Office Equipment P 150,000


Cash P 80,000
Accounts Payable P 70,000
Purchased office equipment
on cash and on caccount.
 Sales Journal – is used to record credit sales.
 PurchasesJournal – used to record purchases
of inventory made on account.
 CashReceipts Journal – used to record all
cash that had been received.
 CashDisbursement Journal – is used to record
transactions involving cash payments.
 A grouping of the entity’s accounts.
 Used to classify and summarize
transactions and to prepare data for basic
financial statements.
 Reference Book of the accounting system.
 Also called the “book of final entry”.
The accounts in the general
ledger are classified into two
general groups:

 Balance Sheet
 Income Statement
GENERAL JOURNAL
Date Account Titles and Explanation P.R. Debit Credit
2019
Feb. 14 Cash 101 P 1,200,000
Co, Capital 110 P 1,200,000
Initial Investment

Account: Cash Account No. 101

Date J.R. Debit Credit Balance

2019

P 1,200,000
Feb. 14 P 1,200,000
GENERAL JOURNAL
Date Account Titles and Explanation P.R. Debit Credit
2019
Feb. 14 Cash 101 P 1,200,000
Co, Capital 110 P 1,200,000
Initial Investment

Account: Co, Capital Account No. 110

Date J.R. Debit Credit Balance

2019

P 1,200,000
Feb. 14 P 1,200,000
 A group of like accounts that contains the
independent data of a specific general
ledger.
 Created or maintained if individualized
data is needed for a specific general
ledger account.
 The total amount of subsidiary ledgers
should equal the balance in the general
ledger.
THANK
YOU!

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