BOOKS OF ACCOUNTS

Team Almazor
 The Bureau of Internal Revenues, the
taxing in the Philippines, mandates that all
business or persons, required by law, to
pay internal revenue taxes shall keep
permanently-bound books of accounts for
registration or stamping.
 BOOKS OF ACCOUNTS
Books of accounts are records in
which all accounts and transactions of
a business are maintained on a regular
basis.
 JOURNAL
A journal functions as a financial diary. It is
used to record chronologically all
transactions of a business as they occur.
Since it provides the first evidence of a
formally-recorded transaction, it is
commonly referred to as the book of original
entry.
 THE USE OF A JOURNAL PROVIDES
THE FOLLOWING ADVANTAGES:
1. it provides a systematic and
chronological record of transactions;
2. it simplifies the ledger as some details in
the journal need not be written in the
ledge;
3. it provides adequate explanation of each
entry and presents necessary information
about the transactions such as the
account debited and credited and related
amounts;
4. it ensures that the double-entry
bookkeeping system is observed when
recording transactions; and
5. it helps in solving misunderstanding in
business because it serves as proof and
legal evidence of transactions.

There are two types of journals: (1) the

special journal: and (2) the general journal
 SPECIAL JOURNALS
Special journals are journals used to record
recurring transactions. There are four
common types of special journals, namely:
(1) sales journal;
(2) purchases journa1; (3) cash receipts
journal; and (4) cash disbursements journal.
 SALES JOURNAL
The sales journal (SJ) is a journal used
to record sale of merchandise on
account. This typically used by
merchandising business which have
many credit sales transactions.
The SJ typically includes the following
information:
(a)the title “Sales Journal”;
(b)page number;
(c) date of the transaction;
(d)invoice number;
(e)name of the customer;
(f) reference number for posting purposes;
(g)a special money column for Accounts
Different businesses might have different
formats and columns. A sample format of SJ
is shown below:

SALES JOURNAL
Dr: Accounts Receivable
Date Invoice No. Customer Name Ref
Cr: Sales
 PURCHASE JOURNAL

The purchases journal (PI) is a journal

used to record purchase of
merchandise on account. This is
typically used by merchandising
businesses which have many credit
purchases.
The PJ typically includes the following
information:
(a) the title “Purchases Journal”;
(b) page number;
(c) date of the transaction;
(d) name of the supplier;
(e) reference number for posting purposes;
(f) a special money column for Purchases
debit/Accounts Payable credit.
A sample format of a PJ is shown below:

PURCHASE JOURNAL
Dr: Purchases
Date Supplier Name Ref
Cr: Accounts Payable
 CASH RECEIPT JOURNAL
The cash receipts journal (CRJ) is a
journal used to record receipts of cash
from whatever source. All business
transactions which include a debit to
Cash are recorded in this journal.
The CRJ typically includes the following
information: (a) the title “Cash Receipts
Journal”;
(b) page number;
(c) date of the transaction;
(d) official receipt number;
(e) name of the party from whom cash is
received;
(f) reference number for posting purposes;
(g) a special money column for Cash debit;
(h) a special money column for Sales
Discount debit;
(i) a special money column for Accounts
Receivable debit and credit;
(j) a special money column for Sales
credit; and
(k) a special money column for Other
Accounts credit.
 A sample format of a CRJ is shown
below:
CASH RECEIPT JOURNAL
Official Sales Accounts Other
Received
Date Receipt Ref. Cash Dr Discount Receivabl Sales Cr Accounts
from
No. Dr e Dr (Cr) Cr
 CASH DISBURSEMENTS JOURNAL

The cash disbursements journal (CDJ), or

sometimes known as the cash payments
journal (CPJ), is a journal used to record
payments of cash for whatever purpose. All
business transactions which include a credit
to Cash are recorded in this journal.
The CDJ typically includes the following
information:
(a)the title “Cash Disbursements Journal”;
(b)page number;
(c) date of the transaction;
(d)check voucher number or reference
number of other source documents;
(e) name of the party to whom cash is paid;
(f) reference number for posting purposes;
(g) a special money column for Cash credit;
(h) a special money column for Purchases
debit; (i) a special money column for
Accounts Payable debit and credit;
(j) a special money column for Purchase
Discount credit; and
(k) a special money column for Other
Accounts debit.
 A sample format of a CDJ is shown
below:
CASH DISBURSEMENTS JOURNAL
Check Accounts Other Purchase
Purchase
Date Voucher Paid to Ref. Payable Accounts Discount Cash Cr
s Dr
No. (Dr) Cr Dr Cr
 GENERAL JOURNALS
The general journal (GD) which looks
like a two-column columnar notebook,
is the journal used to record all other
business transactions not recorded in
the special journals.
The GJ includes the following information:
a) the title “General Journal”;
b) Page number;
c) Date of transaction;
d) Particulars column;
e) Reference column;
f) Debit money column; and
g) Credit money column
 General Journal

Date Particulars Ref Dr Cr

 The particulars column is used to
record the journal entry itself which
includes the account/s debited, the
account/s credited, and the explanation
for the journal entry. The reference
column is use for posting purposes.
SPECIAL JOURNALS VS
GENERAL JOURNAL
The use of special journals, in addition
to the general journal, provides the
following advantages: (1) it promotes
division of labor, (2) it saves time
journalizing transaction; (3) saves time
in posting transactions, and it aids in
decision making.
 LEDGER
A ledger is a collective record of individual
accounts used by a business. It is used to
sort all entries made in the journal in
chronological order and to group all
transactions that affect individual accounts
in order to facilitate the preparation of
financial statements.
The use of a ledger has the following
advantages:
(1)it provides detailed information about
revenues and expenses in one place, hence
results of business operations can be easily
determined;
(2)it provides detailed information about assets,
liabilities, and owner’s equity of the business,
thus the financial position of the business can
easily be known;
3) it assists management in monitoring
business performance through
information in individual ledger
accounts; and
4) it serves as tool for auditors to track
the flow of business transactions for a
given period of time.
 GENERAL LEDGER
The general ledger is used to accumulate
and classify individual transactions from the
journal. It divides the account into two
sides: the left side and the right side. Debit
information is listed on the left side, while
credit information is listed on the right side.
A typical general ledge; includes the following
information:
(a) account title;
(b) account number;
(c) date of the transaction;
(d) items column;
(e) reference column;
(f) debit money column; and (g) credit money
column.
A sample general ledger is presented below:

CASH DISBURSEMENTS JOURNAL

Date Items Ref. Dr Date Items Ref Cr

 SUBSIDIARY LEDGER

The subsidiary Iedger is used to provide

detailed information about a specific
ledger account. This means that just by
looking at the subsidiary ledger, the
business know at a glance how much it
owes others and how much other owe to
it.
 Subsidiary are normally set up for Accounts
Renewable and Accounts Payable. The
Accounts receivable subsidiary ledger, also
known as customer subsidiary ledger, gives
more detailed information on the transaction
on each credit customer and provides
information on which customers owe money
to the business and how much.
 The Accounts Payable subsidiary ledger,
also known as the supplier subsidiary
ledger, gives details on the transactions of
the business with each account supplier
and provide information on which suppliers
the business owes money to and how
much.
A typical subsidiary ledger includes the following
information:
(a)the related control account;
(b)name of the customer/supplier;
(c) page number;
(d)date of the transaction;
(e)items column;
(f) reference column;
(g)debit money column:
(h)credit money column; and the
(i) (i) account balance column
 A sample subsidiary ledger is presented
below:
CASH DISBURSEMENTS JOURNAL

Date Items Ref Dr Cr Balance

 MEMBERS
Charlize Marie Dula-ogon Yvette Parallag
Angel Tanio Emmanuel Pascual
Kristine Mae Ambrocio Crista Mae Dandan
Missy Baracena Fritzchelyn Lacson
Jennifer Regencia Noel Milaya