sub division of journals
TRANSCRIPT
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SUBDIVISION OF
JOURNALSPresented by :
Kunal Gupta(19)Manish Mahajan(20)Meghna Jamwal(21)
Mehak Gupta(22)Mehak Kalsotra(23)
Mehak Kholi(24)
SUB DIVISION OF JOURNALSJournals are the book of original entry
and it is also called primary records because the first entry of transaction is made in journals.
In a large business concern a journal is divided into parts so that several clerk could work at the same time. This is known as subdivision of journal
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NEED FOR SUB DIVISION OF JOURNALS
When business transactions were very few, only one book of original entry called journal was used . Even today for small transactions only one Journal is maintained .
However for numerous transactions maintenance of various journals for record keeping is highly inconvenient and suffers certain defects like the periodical totals of transactions of same nature such as monthly credit sales or purchases, monthly sales returns etc . cannot be ascertained easily .
To overcome the above drawback subsidiary books are introduced .Under this systems several journals are maintained for recording specific type of transactions .
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OBJECTIVESTo simplify the recording of business
transactions in the book of original entry.
To facilitate the classification of transactions
according to their name.
To make it easier to locate any transactions
recorded in the book of original entry.
To reduce the chances of errors and frauds in
the recording of business transactions in the
books of original entry.
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ADVANTAGESRecording of transactions in the books of original entry is specified and time and labor are saved.
It reduces the chances of errors in accounting because recording of transactions becomes simplified.
When different types of transactions are recorded separately the journals will not become bulky and hence can be handled easily by clerks.
Under this system, the chances of fraud are minimized , as the work is distributed among the book-keepers.
Subsidiary books may be expensive in case of a small business as in a small business it is best to keep journal.
It requires some basic knowledge of accountancy as if any of the entries are recorded incorrect then it will be a problem or they need to be rectified.
DISADVANTAGES
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TYPES OF SUB DIVISION OF JOURNALS
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PURCHASES BOOKPurchases book records all credit
purchases made by the organization. It is also called as purchases journal, invoice-book or Bought-Day-Book .
It is used to record all credit purchases of goods which are meant for resale in the business. Cash purchases of goods, cash and credit purchases of assets are not entered in this book.
Credit purchases other than goods such as stationary items should not be recorded in purchases book.
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DATE PARTICULARS
INVOICE NO.
L.F. AMOUNT (₹)
Where Date Column – Represents the date on which the transaction took place. Particulars Column – This column includes the name of the seller and the particulars of goods purchased. Inward Invoice No. Column – Reveals the serial number of the inward invoice. LF. Column – This column shows the page number of the suppliers account in the ledger accounts. Amount Column –This column represents the net price of the goods, i.e, the amount which is payable to the creditors
after adjusting discount and expenses
FORMAT
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SALES BOOKS
It records all credit sales of goods made by the organization during a specific period. It is also called as Sales Day book or Sales Journal.
Cash sales, cash and credit sales of assets are not entered in this book. The entries in the sales book are on the basis of the invoices issued to the customers with the net amount of sale.
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FORMATDATE PARTICUL
ARSINVOICE NO.
L.F. AMOUNT (₹)
Where Date Column – Represents the date on which the transaction took place.
Particulars Column –Includes the name of the customer and particulars of the goods sold.
Invoice No. Column – Reveals the serial number of the outward invoice. LF. Column –shows the page number of the suppliers account in the ledger .
Amount Column –shows the net price of the goods, i.e. the amount which is payable to the creditors.
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PURCHASES RETURNS BOOK
This book is used to record all returns of goods by the business to the suppliers. The entries in the Purchases Returns Book are usually made on the basis of debit note issued to the suppliers or credit note received from the suppliers.
We called it a Debit note because suppliers account is debited with the amount written in this note. The same note is termed as credit note from the receiving party’s point of view because he will credit the account of the party from whom he has received the note together with goods.
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FORMATDATE PARTICULA
RSDEBIT NOTE NO.
L.F. AMOUNT (₹)
Where Date Column – Represents the date on which the transaction took place.
Particulars Column – includes the name of the purchaser and the particulars of goods purchased.
Debit Note No. Column -- records the serial number each debit note.
LF. Column – shows the page number of the suppliers account in the ledger accounts.
Amount Column – shows the net price of the goods, i.e, the amount which is payable.
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SALES RETURNS BOOK
This book is used to record all returns of goods to the business by the customers. The entries in the sales return book are usually on the basis of credit notes issued to the customers or debit notes issued by the customers.
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FORMAT DATE PARTICULA
RSCREDIT NOTE NO
L.F. AMOUNT (₹)
Where Date Column – Represents the date on which the transaction took place.
Particulars Column – includes the name of the purchases and the particulars of goods purchased.
Credit Note No. Column -- records the serial number of each credit note.
LF. Column – shows the page number of the suppliers account in the ledger accounts.
Amount Column – shows the net price of the goods, i.e, the amount which is payable.
Bills receivable book is used to record the bills received from debtors. When a bill is received, details of it are recorded in the bills receivable book.
In the ledger the account of the person from whom each bill is received is credited with the amount of that bill and the periodical total of the book is posted to the debit of bills receivable account.
BILLS RECEIVABLE BOOK
FORMAT
DATEFROM WHOM
RECEIVEDTERM DUE DATE L.F.
AMOUNT
(₹)
Where
Date Column – Represents the date on which the
transaction took place.
From whom received Column – includes the name of
person from which the amount is to be received.
Term Column – for how much time.
Due date Column- last date
LF. Column – shows the page number of the suppliers
account in the ledger accounts.
Amount Column – shows the net price of the goods, i.e,
the amount which is receivable
BILLS PAYABLE BOOK
Bills payable book is used to record bill accepted by us. When a bill drawn by our creditor is accepted particulars of the same are recorded in this book.
In the ledger, the account of each person whose bill has been accepted is debited with the amount of the bill. The monthly total of the bills accepted is credited to the bills payable account ledger.
DATETO WHOM
GIVENTERM DUE DATE L.F.
AMOUNT
(₹)
FORMAT
Where
Date Column – Represents the date on which the
transaction took place.
From whom received Column – includes the name of
person from which the amount is to be paid.
Term Column – for how much time.
Due date Column- last date
LF. Column – shows the page number of the suppliers
account in the ledger accounts.
Amount Column – shows the net price of the goods, i.e,
the amount which is payable
To record cash transaction, separate book is kept which is called Cashbook.
The function of cashbook is to keep records of all cash transactions.
Cashbook takes the place of cash account that is it is not necessary to open separate cash account in the ledger after keeping record in the cashbook.
CASH BOOK
Simple cash book.
Double column cash book.
Triple Column cash book.
Petty Cash book
TYPES OF CASH BOOK
prepared like cash account in ledger.
All the cash received are entered in amount column on debit side and all cash paid appear on credit side in amount column.
Cash book is closed and balanced at the end of the month.
SIMPLE CASH BOOK
DATE PARTICULAR L.F. AMOUNT (₹)
DATE PARTICULAR L.F AMOUNT (₹)
FORMATdr cr
Where Date Column – Represents the date on which the
transaction took place.
Particulars Column – includes the cash transactions particulars or name i.e cash is received from or paid to whom.
LF. Column – shows the page number of the suppliers account in the ledger accounts.
Amount Column – shows the amount of cash received and paid.
A cashbook with discount column is called double column cashbook.
Two accounts, cash and discount are combined in this book. Discount allowed to the customers represent loss.
DOUBLE COLUMN CASH BOOK
DATE
PARTICULAR L.F DISCOUNT AMOUNT (₹)
DATE PARTICULAR L.F DISCOUNT AMOUNT (₹)
FORMATdr cr
Where
Date Column – Represents the date on which the
transaction took place.
Particulars Column – includes the cash transactions
particulars or name i.e cash is received from or paid to
whom.
LF. Column – shows the page no. of the suppliers
account in ledger accounts.
Discount column – shows the discount allowed and
received..
Amount Column – shows the amount of cash received
and paid
A cash book with discount and bank column is triple column cashbook. Three accounts are combined.
In business firm most of the payment are received and paid by cheque. Transactions are preformed through bank.
TRIPLE COLUMN CASH BOOK
DATE PARTICULAR L.F DISCOUNT AMOUNT(₹)
BANK DATE PARTICULAR L.F DISCOUNT AMOUNT(₹)
BANK
FORMATdr cr
Where
Date Column – Represents the date on which the
transaction took place.
Particulars Column – includes the cash transactions
particulars or name i.e cash is received from or paid to
whom.
LF. Column – shows the page no. of the suppliers account
in ledger accounts.
Discount column – shows the discount allowed and
received.
Bank – shows the cash transactions which is held via bank
i.e cash paid through bank and received in bank account.
Amount Column – shows the amount of cash received and
paid
Used to record small amount of expenses.
Like stationary, cleaning charges and postage.
PETTY CASH BOOK
DATE
PARTICULARS
AMOUNT (₹)
DATE PARTICULARS
AMOUNT (₹)
FORMATdr cr
Where Date Column – Represents the date on which the
transaction took place.
Particulars Column – includes the cash transactions particulars or name i.e cash is received from or paid to whom.
Amount Column – shows the amount of cash received and paid
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GENERAL JOURNAL
The transactions which do not fall within the scope of above mentioned books, are recorded in this journal’, e.g. purchase of an asset on credit, depreciation on assets, expenses payable, bad debts etc. It is known as Journal Proper, Modern Journal or Principal Journal. Some authors call it only ‘Journal’.
DATE PARTICULARS DEBITAMOUNT (₹)
CREDITAMOUNT(₹)
FORMAT
Where Date Column – Represents the date on which the
transaction took place.
Particulars Column – includes the cash transactions particulars or name i.e cash is received from or paid to whom.
Amount Debit Column – shows the amount received Amount Debit Column – shows the amount paid
QUIZ
Four column cash book.
Bills payable book.
Bills receivable book.
Triple column cash book.
WHICH IS NOT THE ONE TYPE OF SUBDIVISION OF JOURNAL
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Four
Three
Two
HOW MANY TYPES OF CASH BOOK WE DISCUSSED ?
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HOW MANY COLUMN A SIMPLE CASH BOOK HAVE ?
Cash Book
Return Book
Bills Payable Book
Sales book
WHICH TYPE OF SUBSIDIARY BOOK CONTAINS “OUTWARD INVOICE NO” COLUMN ?
Sales Return Book
Cash book
Bills payable book
Purchase book
RECOGNIZE THE FORMAT
Date Particulars
Credit Note No
L.F. Amount
Sales return book
Purchase return book
Bills payable book
Bills receivable book
WHICH BOOK IS USED FOR RECORDING GOODS RETURN TO THE SELLER ?
Cash book
Single column cash book
Petty cash book
Triple column cash book
IN WHICH BOOK SMALL EXPENSES ARE RECORDED ?
Sales return book
Purchase return book
Bills payable book
General Journal book
WHICH BOOK IS USED FOR RECORDING DEPRECIATION ON ASSETS ?
THANK YOU