These are books of either the first or original entry. Examples of subsidiary books are journal, sales book, purchases book etc. So many details of either purchases, sales, returns inwards and returns outwards, are recorded in these book before the amounts concerned are posted into the ledger accounts.
CASHBOOK: This in effect refers really as part of the principle book, the ledger. The cashbook is made up of the cash and the bank account taken out of the ledger and then bound separately for the sake of greater convenience. It is also a book of original entry but it is not a subsidiary …
This refers to the principle book of any account where all the books of account are recorded using the cashbook. The ledger contains all the accounts of a business and is kept on the double entry system. By double entry, we mean that all transactions affect two accounts: one is debited (received value), while the …
Credit balances: These balances in the ledger must be either liabilities, income or gain (profit) here, if they represent indebtedness, for example, account payable, they can regard as liabilities. But if they denote income such as discount received, they can be regarded as gains. Then the profit of the business is then the income in …
Debit Balances in a ledger account may be categorized as assets, expenses or losses. If they represent debts on tangible expenditures, such as furniture and fittings, plants, machinery etc, they can be regarded as assets. If eventually their values expire in any accounting period, they are expenses or losses (assets, expenses and losses; which are …
This is one that is comprised of both: (i) real accounts and (ii) Norminal accounts. Real accounts or in other words called property accounts are those accounts that refer to assets such as machinery, plants, furniture and fittings, stock in trade, cash etc. where as Norminal Accounts are those accounts that deal on gains and …