RECORDING TRANSACTION TO GENERAL LEDGER
- To simplify of recording transaction in a company needs a basic procedure
- To Process of recording transaction needs some accounts and general ledger
A. DEFINITION of ACCOUNTS, GENERAL LEDGER, and KINDS of ACCOUNTS
- An account is simply a class of information in an accounting system. It involves accounts of assets, liabilities, equities, income, and expenses
- Examples: Cash, Supplies, Accounts Payable, Capital, Services Revenue, Salaries Expense
General Ledger
- General ledger is just a book containing all the company’s accounts
- A manual (handwritten) bookkeeping system generally uses ledger to classify business transactions by account
- Each page of the ledger usually represents one account
Usefulness of an Account
- A group of accounts for a business entity is called a ledger
- A list of the accounts in the ledger is called a chart of accounts
- A chart of accounts is designed to meet the information needed for company’s managers and other users of their financial statements
Account Classification
Characteristics of an Account
The simplest form of an account has three parts:
- Each account has a title which is the name of the item recorded in the account
- Each account has a space to record increases in the amount of the item
- Each account has a space to record decreases in the amount of the item
Form of Accounts
A simplest T – Form of Accounts
- Name of account is in list heading
- The date column is used to record the transaction time occurred
- The description column is used to record a description related to the transaction
- F-column is filled journal page when posting to general ledger is done
A Completely
T – Form of Accounts
Transaction Recording in Cash
