Book of accounts

JOURNAL - a financial diary used to record chronologically all business transactions of the
business as they occur.
Special journals are journals used to record recurring transactions
Sales journals record the sale of merchandise on account. Only transactions
which involve debit to accounts receivable and credit to sales are recorded in this
journal.
Purchase journal to record the purchase of merchandise on account or credit
Purchases. Only the transactions involving debit to purchases and credit to
accounts payable are recorded in this journal.
Cash Receipts Journal is a journal used to record receipts of cash from whatever
Source. All transactions which include debit to cash are recorded in this journal.
For merchandising business these include the sales of merchandise on cash
basis, sale of merchandise with down payment, collection of customer account
and cash investment made by the owner.
Cash Disbursements journal or cash payment journal is used to record payments of
cash. All business transactions which include credit to cash are recorded in this journal such as
purchase of items on cash, with downpayment, payment of account with suppliers, payment of
expenses and cash withdrawal made by the owner.

General journals are used to record all other transactions not recorded in the special journal.
This looks like a two columnar notebook.

LEDGER - is a collective record of individual accounts used by a business. It is used to sort all
entries made in the journal in chronological order and group all transactions that affect individual
accounts in order to facilitate the preparation of financial statements. This is commonly known
as the book of final entry. Because it provides the last record of financial information before
financial reports are prepared.

General Ledger - is used to accumulate and classify individual transactions from the journal. It
divides the account into two sides: the left side and the right side. Debit information is listed on
the left side while credit on the right side.

Subsidiary ledger- is used to provide detailed information about specific ledger accounts. It
follows a running-balance type of ledger because it adds a column to determine the account
balance after posting each transaction. This means that by just looking at the subsidiary ledger,
the business knows how much it owes others and how much others owe them. THIS IS
NORMALLY SET FOR ACCOUNTS RECEIVABLE AND ACCOUNTS PAYABLE.