Books of Original Entry (原始分录簿) and Ledgers (分类帐)

1、Books of Original Entry (原始分錄簿) and Ledgers (分類帳) References：Chapter 11-14, 1931AIntroductionBooks 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

2、 Entry).2BBooks of Original Entry1Sales Journal ( Day Book)2Purchases 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】3TransactionsClassifying the transactionsCreditSalesCredi

3、tPurchasesReturnsInwardsReturnsOutwardsCash andcheque receiptsand paymentOthersReturnsInwardsJournal SalesJournalReturnsOutwardsJournal PurchasesJournal Cash Book/Petty CashBookJournalp. 116Posting to the double entry accounts in the ledgers：Sales ledgerPurchases ledgerGeneral ledger4CLedgers3 kinds

4、 of ledgers：Sales ledgerrecords each debtors T A/CPurchases ledgerrecords each creditors T A/CGeneral ledger records the rest of the accounts, such as expenses, Fixed assets, capital, etc.5D Sales Journal and Sales LedgerD1Sales JournalRecord all credit salesThere is no debit items in “Sales A/C”, s

5、o the “Sales A/C” transforms to a statement(表), i.e, Sales Journal.6Examples 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 Pep

6、per 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 tra

7、nsaction.7*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. 8Sales Journal2008ParticularInv. N

8、o.$Jan 5Rabbit Co495 15Pepper Co100 28Pump Co495 31Transferred to sales A/C 1090(in General Ledger)9D2Sales 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 pos

9、ted to the “Sales A/C” in the General Ledger.10Sales Journal（Record each credit sales）Sales A/CCr.$ Debtors: Rabbit Co. Dr. $General LedgerSales LedgerPosting each sales transactionsPosting the total to the Sales A/C11EPurchases Journal and Purchases LedgerE1 Purchases JournalRecord all credit purch

10、asesThere is no credit items in “Purchases A/C”, so the “Purchases A/C” transforms to a statement(表), i.e, Purchases Journal.12Examples 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 recei

11、ved 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

12、 required to prepare：The Purchases Journal to record the above transaction.13Purchases Journal2006ParticularInv. No. $Feb 6Celery Co. 198 17Carrot Co. 100 27Spinach Co. 198 28Transferred to Purchases A/C 496 (in General Ledger)14E2Purchases LedgerAfter recording each transaction in the Purchases Jou

13、rnal, 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.15Purchases Journal（Record the credit purchases） Creditors: Celery CoCr.$Purchases Dr. $Purchases Ledger

14、General LedgerPosting each purchases transactionPosting the total to the Purchases A/C16FReturns 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 Marc

15、h, 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.17Returns Inwards Journal2006ParticularCredit Note No. $Mar 1Rabbit Co. 5

16、010Pepper Co. 1031Transferred to returns inwards A/C 60(in General Ledger)18Returns Inwards Journal(Record each items in Credit Notes)Debtors: Carrot Co.Cr.$Returns Inwards A/C Dr. $Sales LedgerGeneral LedgerPosting each returns transactionPosting the totalto the returns inwards A/c19GReturns Outwar

17、ds JournalOur 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, return

18、ed $10 goods to Carrot Co.You are required to prepare：The Returns Outwards Journal to record the above transaction.20Returns Outwards Journal2006 ParticularDebit Note No. $Mar 1 Celery Co. 20 5 Carrot Co. 10 31 Transferred to returns Outwards A/C 30(in General Ledger)21Returns Outwards Journal(Recording each items in Debit Notes)Returns Inwards A/CCr.$ Creditors: Celery Co. Dr. $General LedgerPurchases LedgerPosting each transaction in debit notesPosting the total to the