ACCOUNTING BOOKS-

JOURNAL AND LEDGER

Bareng, Luis
Macrohon, Xhean
Nochefranca, Kent
Asuncion, Nicole
Cajalne, Monique
Dela Pea, Stephanie
Fermiza, Noreen
Hipolito, Cristemae
Ramones, Maica
Rivera, Steffi
Singcay, Joan
 Journals are referred to as books of original entry.
Accounting entries are recorded in a journal in order
by date. In the general journal you must enter the
account to be debited and the account to be
credited and the amounts.
These transactions are recorded in chronological
order, which makes the general journal an excellent
place in which to research accounting transactions
by date.
A general ledger is a chronological accounting
record a business uses to keep track of financial
transactions. The general ledger contains a
summary at the account level of every transaction
that a business has engaged in.
The journal would then look like this:
Date
Particulars PR Debit Credit
yyyy
mmm dd Account debited ref. amount
Account credited ref. amount
Short explanation
or

annotation.
 Account
An account is a storage unit that
stores similar items or transactions.
Examples of accounts are:
Cash, Accounts Receivable, Office
Equipment, Accounts Payable,
Service Income, Rent Expense, and
so on.
 Debit and Credit
Debit simply means left and Credit
means right.
"Debit" is abbreviated as "Dr." and
"credit", "Cr.".
The terms originated from the Latin terms
"debere" or "debitum" which means "what is
due", and "credere" or "creditum" which
means "something entrusted or loaned".
 Normal Balance
Debit is on the left side and credit on the
right. Normal balance is the side where the
balance of the account is normally found.
When you place an amount on the
normal balance side, you are increasing the
account. If you put an amount on the
opposite side, you are decreasing that
account. Therefore, to increase an asset,
you debit it. To decrease an asset, you
credit it. To increase liability and capital
accounts, credit. To decrease them, debit.
 Accounting Normal
To To
Increase Decrease
Element Balance
1. Assets Debit Debit Credit
2. Liabilities Credit Credit Debit
3. Capital Credit Credit Debit
4. Withdrawal Debit Debit Credit
5. Income Credit Credit Debit
6. Expense Debit Debit Credit

-The normal balance is the same as the action to increase the account. The
action to decrease the account is simply the opposite of that.
 Ledger accounts use the T-account format to
display the balances in each account. Each
journal entry is transferred from the general
journal to the corresponding T-account.
The debits are always transferred to the left side
and the credits are always transferred to the
right side of T-accounts.
Since most accounts will be affected by multiple
transactions, there are usually several numbers
in both the debit and credit columns. Account
balances are always calculated at the bottom of
each T-account. In other words, an account with
a credit balance will have a total on the bottom
of the right side of the account.
EXAMPLE OF JOURNALIZING ANG POSTING
Paul forms the corporation by purchasing
10,000 shares of $1 par stock.
 PGS's first rent payment is due.
QUIZ
1. A purchase of equipment for cash would
result in posting to which two pages in the
general ledger?
a) Cash debited, Equipment Expense credited
b) Debiting Equipment, Crediting Cash
c) Debiting Cash, Crediting Equipment
d) Equipment Expense debited, Cash credited
2. Asset accounts have what type of
balance?
e) DEBIT
f) CREDIT
g) CONTRA
h) ALL OF THE ABOVE
3. Accounts are typically displayed in
_______ format before the trial balances is
drafted.
4. A_______ is used to record a business
event as they occur throughout the year.
5. _______ is the side where the balance of the
account is normally found.
6. ________ are referred to as books of original
entry.
7. The _________contains a summary at the
account level of every transaction that a
business has engaged in.
8. What is the normal balance of
withdrawal?
9. What is the meaning of the Latin terms
"credere" or "creditum" ?
10. What is the normal balance of income?
ANSWER:
1. B
2. A
3. T account
4. Journal Entry
5. Normal Balance
6. General Journal
7. General Ledger
8. Debit
9. something entrusted or loaned
10. Credit