The accounting system

Chapter 2

Wood/Robinson: Book-keeping and Accounts, 7e, © T. Sijtsma 2009 2-1

 Books of original entry

Sales day book for credit sales

Purchases day book for credit purchases
Sales returns day book for returns inwards
Purchases returns day book for returns outwards
Cash book for receipts and payments of
cash and cheques
General journal for all items
Petty cash book for (small) petty payments

Wood/Robinson: Book-keeping and Accounts, 7e, © T. Sijtsma 2-2

 Types of ledgers

The different types of ledgers most businesses use

are:

Sales ledger – for customers’ personal accounts

Purchases ledger – for suppliers’ personal accounts
General ledger – for all remaining double entry accounts

Wood/Robinson: Book-keeping and Accounts, 7e, © T. Sijtsma 2-3

 Using more than one ledger

Main reason of using more than one ledger is:

To allow different members of staff the ability to

record transactions at the same time.

Wood/Robinson: Book-keeping and Accounts, 7e, © T. Sijtsma 2-4

 A diagram of the books
commonly used
All business transactions

Classify – put same types of transactions together

Credit Credit Sales Purchases Cash Receipts Other

Sales Purchases returns returns and Payments types

Enter in
Enter in Enter in Enter in Sales Enter in
Purchases Enter in Cash
Sales Purchases Returns General
Returns Book
Day Book Day Book Day Book journal
Day Book

Enter in double entry accounts in the various ledgers

• Sales ledger
• Purchases ledger
• General ledger
Wood/Robinson: Book-keeping and Accounts, 7e, © T. Sijtsma 2-5
 Types of accounts

Accounts

Personal accounts Impersonal accounts

Debtors’ Creditors’ Nominal accounts,

accounts accounts Real accounts, for
for expenses,
property of all kinds
income and capital

Wood/Robinson: Book-keeping and Accounts, 7e, © T. Sijtsma 2-6

 End of Chapter 2

Wood/Robinson: Book-keeping and Accounts, 7e, © T. Sijtsma 2009 2-7