Chapter 5: Books of Accounts & Double-

entry System (FAR by: Millan)

Learning Ojectives
1. Identify the uses of the two books of
accounts.
2. Illustrate the format of general and special
journals.
3. Illustrate the format of general and subsidiary
ledgers.
Chapter 5: Books of Accounts & Double-
entry System (FAR by: Millan)
 The Books of Accounts
1. Journal (General and Special)
2. Ledger (General and Subsidiary)

Chapter 5: Books of Accounts & Double-entry System (FAR by: Millan)

 Journal
The journal, also called the “book of original
entries,” is the accounting record where business
transactions are first recorded.
1. Special Journal – is used to record transactions
with similar nature (e.g., Sales journal,
Purchases journal, Cash receipts journal, and
Cash disbursements journal)
2. General Journal – All other transactions that
cannot be recorded in the special journals are
recorded in the general journal.
Chapter 5: Books of Accounts & Double-entry System (FAR by: Millan)
 Ledger
• The ledger is used to classify the effects of
business transactions on the accounts. It is
also called the “book of final entries.”
1. General ledger – contains all the accounts
appearing in the trial balance.
2. Subsidiary ledger – provides a breakdown
of the balances of controlling accounts.

Chapter 5: Books of Accounts & Double-entry System (FAR by: Millan)

Chapter 5: Books of Accounts & Double-entry System (FAR by: Millan)
Format of the General Journal

Chapter 5: Books of Accounts & Double-entry System (FAR by: Millan)

Formats of the Ledgers

Chapter 5: Books of Accounts & Double-entry System (FAR by: Millan)

 Double-entry System
• Concept of duality – each transaction is
recorded in two parts – debit and credit
• Concept of equilibrium – each transaction is
recorded in terms of equal debits and
credits.

Chapter 5: Books of Accounts & Double-entry System (FAR by: Millan)

Normal balances of accounts

Chapter 5: Books of Accounts & Double-entry System (FAR by: Millan)

Rules of Debits and Credits

Chapter 5: Books of Accounts & Double-entry System (FAR by: Millan)

Chapter 5: Books of Accounts & Double-entry System (FAR by: Millan)
 Contra and Adjunct accounts
• Contra accounts are presented in the
financial statements as deduction to their
related accounts.
• Adjunct accounts are presented in the
financial statements as addition to their
related accounts.

Chapter 5: Books of Accounts & Double-entry System (FAR by: Millan)

 PROBLEM 3: FOR CLASSROOM DISCUSSION

Chapter 5: Books of Accounts & Double-entry System (FAR by: Millan)

QUESTIONS
REACTIONS

Chapter 5: Books of Accounts & Double-

entry System (FAR by: Millan)
END

Chapter 5: Books of Accounts & Double-

entry System (FAR by: Millan)