The sales journal or day book is intended to record individual sales on credit. The originating document for entries in the sales journal is a copy of the invoice sent to the customer. A sales invoice is made out, normally by the sales department: a. On notification from the works that the article required has [...]

From the point of view of the ledger keeper the entry in the purchase journal is tantamount to acceptance of the charge, and the remaining procedure is automatic. At convenient intervals, say monthly, the entries in the purchase journal against each supplier will be credited to that supplier’s account in the ledger. The double entry [...]

The entries in the purchase journal are made from the supplier’s invoices. Before an entry is made in the purchase journal the accuracy of the charge shown on the supplier’s invoice must be verified. In the case of goods supplied the normal routine is for a goods inwards note to be made out by the [...]

So long as a business pays on delivery for everything it buys the purchases account or accounts could be written up from the entries in the cash paid book or the cash paid side of a single cash book. Where purchases are obtained on credit it is necessary to operate a separate book of prime [...]

If the accounts in the ledger are organized in the manner shown in the preceding paragraphs the preparation of financial statements for management in simplified. A trial balance can be extracted from the ledger under the mean heading, and the sub-totals extracted on to summary financial statement. Before such a statement is prepared it will [...]

It is emphasized at this point that the growth of a business does not necessarily entail an increase in the number of main ledger accounts. It is more likely that the small business for which a detailed costing system is not justified would require many more accounts representing analysis of expenditure than a large concern. [...]

All methodical accounting is based on the principle of double entry, of which the first recorded use was amongst the Genoese in the fifteenth century. This simple theory is based on the assumption that there are two aspects to every transaction: one the surrender of a benefit and other the gain of a corresponding benefit. [...]