Ayah Eca

These must be posted onto the "books of original entry." These record on a daily basis every transaction that a business makes. The books are often referred to as "journals" e.g. The Purchases Journal. They record the details of the transaction, the amount of money involved and the date of the transaction. Each transaction will have a folio number. Do you want to see an example? There are seven books of original entry: The Purchases Day Book This records all purchases made by a company. The Sales Day Book This records all sales made by a company The Purchases Returns Book This records all items purchased by a company and subsequently returned to the seller. The Sales Returns Book This records all items sold by a company which were subsequently returned by the buyer. The Journal Proper This records rarer items such as the purchase of capital items. The Cash Book This...

Each of the accounts is separated into two columns. The left hand column is used to show receipts and the right hand side is used to show payments. There is a simple rule to explain which side of the account you should list any particular transaction. Debit - the account that receives the goods, services or money. (The receiver) Credit - the account that gives goods, services or money. (The giver) A local business called Sharp Ltd has an account with Pepe. They often have long business meetings and have pizzas delivered. If we look at their account below we can see that on May 10 th they purchased pizzas from Pepe on credit. Sharp Ltd is the receiver of goods and the transaction is therefore entered on the debit side. On June 9 th (thirty days later) Sharp Ltd makes a payment for the goods. Sharp Ltd is the giver in this case and so his account is credited. Account of Sharp Ltd ...