Here are some journalizing notes in detail for cash/subsidiary books and ledger:
Cash Book
The cash book is a subsidiary book that records all cash receipts and payments. It is divided into two columns:
- Receipts – This column records all cash received, such as from sales, investments, or loans.
- Payments – This column records all cash paid, such as for purchases, expenses, or dividends.
The cash book is a useful tool for tracking cash flow and for preparing financial statements. It can also be used to reconcile bank statements.
Journalizing Notes for Cash Book
- All cash receipts are recorded on the debit side of the cash book.
- All cash payments are recorded on the credit side of the cash book.
- The cash book is a summary of all cash transactions, so it is not necessary to record each transaction in the general ledger.
- However, if a cash transaction affects a ledger account, such as Accounts Receivable or Accounts Payable, then the transaction must be recorded in the general ledger as well.
Subsidiary Books
Subsidiary books are used to record specific types of transactions. For example, the purchases book is used to record all credit purchases, and the sales book is used to record all credit sales.
The subsidiary books are then summarized in the general ledger. This helps to reduce the amount of data that needs to be recorded in the general ledger, and it also makes it easier to track specific types of transactions.
Journalizing Notes for Subsidiary Books
- All transactions recorded in the subsidiary books must also be recorded in the general ledger.
- The journal entries for subsidiary book transactions are usually made in the general journal.
- The ledger account that is affected by the subsidiary book transaction is entered in the debit or credit column of the journal entry, depending on whether the transaction is a debit or credit.
Ledger
The ledger is the main book of accounts in a company’s accounting system. It contains all of the company’s accounts, such as Cash, Accounts Receivable, Accounts Payable, Inventory, and Equipment.
The ledger is updated with journal entries from the general journal and the subsidiary books. The ledger is used to track the balances of all of the company’s accounts.
Journalizing Notes for Ledger
- All journal entries are posted to the ledger.
- The ledger account that is affected by the journal entry is entered in the debit or credit column of the ledger, depending on whether the transaction is a debit or credit.
- The ledger balance is updated for each journal entry.