| The most important lesson that every aspiring | | | | the respective ledger accounts. Cash sales and |
| accountant learns right through his education and | | | | purchases are posted directly from the cash |
| training is that of recording the transactions | | | | book. |
| accurately and in the proper format. For there | | | | The books of prime entry are the Cash book |
| can be nothing more damaging to the credibility of | | | | (with columns for bank transactions), Sales |
| the accounting process, if one could not rely on | | | | journal, Purchases Journal and General Journal. The |
| the figures thrown up. | | | | General Ledger is the book of secondary entry. |
| Book-keeping is an important aspect of an | | | | Recording of transactions is complete only when |
| accountant's job. Although it might seem quite | | | | they have been posted into the appropriate |
| mechanical, practically it is not so. In a large | | | | accounts in the General ledger. On a monthly |
| organization, despite standardized or mechanical | | | | interval, all the accounts in the ledger are totaled. |
| data capture facilities book-keeping is the best | | | | Then a statement called the trial balance is |
| way to exercise control. | | | | extracted that lists all accounts with their |
| Accountants record transactions on the basis of | | | | respective balances. If the trial balance tallies, that |
| vouchers. A voucher is a concise slip that shows | | | | is the debit balances equal credit balances, the |
| the appropriate item to be debited or credited | | | | numerical accuracy of the accounting system is |
| along with full details of the supporting documents. | | | | established. Otherwise, we could conclude that the |
| Usually, cash and check payments are recorded | | | | double entry principle has not been adopted |
| through vouchers. Assume, the firm paid $20 in | | | | properly. |
| cash for buying office stationery. The debit | | | | Other statements that the book-keeper maintains |
| voucher shows the account to be debited as | | | | are the bank reconciliation, creditors' ledger, |
| Printing and Stationery or any equivalent term, | | | | debtors' ledger and fixed assets register. |
| the amount paid in figures and words and the | | | | From the trial balance, the statement of income |
| details of the bill from the supplier. | | | | and the balance sheet can be prepared. During the |
| For the sales and purchases transactions, entries | | | | course of finalizing these statements, one would |
| are made in a book called the sales journal and | | | | come across errors. The rectification entries for |
| purchases journal. The credit sales and purchases | | | | correcting them are passed through the General |
| are recorded with complete details about bill | | | | Journal. The ledger postings are made so that the |
| number, party name, quantity and total amount. | | | | correct balance can be arrived at. |
| The daily totals from the journals are posted into | | | | |