October 12, 2018

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RECORDING OF TRANSACTION II

ACCOUNTING FOR INCOMPLETE RECORDS




           Recording of Transaction II

 

Recording of Transaction II

Special Journal

 “Special journal refers to the journal meant for specific transactions of similar nature Special journal are also known as subsidiary book or day books”.

Special Transactions to be Recorded in Special Journal
Name of Special Journal Specific transactions to be recorded
1.       Cash Journals

(a)     Simple Cash Book

(b)    Cash Book with Discount Column

(c)     Cash Book with Bank and Discount Column

(d)    Petty Cash Book

Cash TransactionsCash and Discount Transactions

Cash Bank and  Discount Transactions

 

Petty Cash Transaction

2.       Goods Journals

(a)     Purchase Book

(b)    Sales Book

(c)     Sales Return Book

 

(d)    Purchase Return Book

 

Credit purchases of goods

Credit sales of goods

Goods returned by customers to whom goods were sold on credit.

Goods returned to suppliers to whom goods were purchased from credit.

3.       Bills Journal

(a)     Bills Receivable Book

(b)    Bills Payable Book

 

Bills Receivable drawn

Bills Payable acceptable

4.       Journal Proper Transactions not covered elsewhere




 

  • Advantages of Special Journal.
  1. Time and labour saving.
  2. Internal check possible.
  3. Permits use of specialized skill.
  4. Facilitates division of work.



  • Difference between Trade Discount and Cash Discount.
Basis Trade Discount Cash Discount
Meaning Reduction granted by the supplier from the list price. Reduction granted by the supplier from the invoice price in consideration for immediate payment.
Purpose

 

Promotes sales. Promote quick payment.
Ledger account

 

Trade discount account is not opened. Cash discount account is opened.
Time allowed Allowed on purchases. Allowed on immediate payment.
  • Types of Cash Book.
  • Single Column Cash Book.
  • Cash Book with Discount Column (Double Column Cash Book).
  • Cash Book with Bank and Discount Column (Three Column Cash Book).
  • Petty Cash Book.

 

  • Purpose, Source of Recording and Content of some of the Subsidiary Book.
Name of the Book Purpose Source Document Content
Purchase Book Purchase Book is used for the recording of purchased merchandise on credit. Purchase Invoice received from supplier ü  Date of Transaction

ü  Purchase Invoice No

ü  Name of the supplier

ü  Page no of ledger

ü  Amount of invoice net of trade discount

Sales Book Sales Book is used for the recording of sale of merchandise on credit. Sales Invoice issued to the customers ü  Date of Transaction

ü  Sales  Invoice No

ü  Name of the customers

ü  Page no of ledger

ü  Amount of invoice net of trade discount

Purchase Return Book Purchase Return Book is used for the recording of return of the purchase of merchandise on credit. Debit Note issued to the supplier or credit note received from the supplier ü  Date of Return

ü  Debit Note No

ü  Name of the suppliers

ü  Page no of ledger

ü  Amount of goods returned

Sales Return Book Sales Book is used for the recording of the return of the sale of merchandise on credit. Credit Note issued to the customers or debit note received from the customers ü  Date of Return

ü  Credit Note No

ü  Name of the customers

ü  Page no of ledger

ü  Amount of goods returned by customers

Journal Proper Journal Proper is a residual book in which those transactions are recorded which cannot be recorded any where. Balance sheet, transfer vouchers, supporting vouchers. ü  Opening Entry

ü  Closing Entry

ü  Transfer Entries

ü  Adjustment Entries

ü  Rectifying Entries

ü  Miscellaneous Entries.

 

 

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