Module 8: Books of Accounts

Objectives:
a. Identify the uses of the two books
of accounts
b. Illustrate the format of a general
and special journal
c. Illustrate the format of a general
and subsidiary ledger
Module 8: Books of Accounts

Two Major Books of Accounts

*A journal have general journal

and special journals

*A ledger have general ledger

and subsidiary ledger
Module 8: Books of Accounts

Journal – is where the business

transactions are recorded
chronologically by date and details
of each transaction

-considered as the book of first

entry
Module 8: Books of Accounts

Ledger – where all the accounts of

the business (for example Cash,
Accounts Receivable, Accounts
Payable, etc.) are
placed

-considered as the book of final

entry
Module 8: Books of Accounts

There are different types of

accounting that pass the
requirements of BIR
a. Loose leaf manual
b. Manual type
c. Computerized type
Module 8: Books of Accounts

a. Loose-leaf type – usually uses

Microsoft Excel or similar software
b. Manual type – handwritten using
journal or ledger books
c. Computerized type – uses programs
such as SunSystems, Peachtree,
SAP, Quickbooks or MYOB
Module 8: Books of Accounts

* BIR does not specify which type of

accounting entries needs to be
applied but depending on the size of
the business, business owners
decide the choice of a particular
type.
Module 8: Books of Accounts

a. Loose-leaf type – usually uses

Microsoft Excel or similar software
b. Manual type – handwritten using
journal or ledger books
c. Computerized type – uses programs
such as SunSystems, Peachtree,
SAP, Quickbooks or MYOB
Different types of Journals

a. Sales Journal – used to track all the

sales transactions made on credit or
as a receivable on a certain day
b. Purchase Journal – used to track all
purchases that are made on credit
from suppliers as a payable over a
given period
Different types of Journals

c. Cash Receipt Journal –track all sales

made in cash and any collection of
receivables that has been paid in
cash

d. Cash Disbursement Journal – tracks

any payments made in cash
including the ones for payables
Different types of Journals

e. Payroll Journal – track expenses

related to staffing costs

d. Cash Disbursement Journal – tracks

any payments made in cash
including the ones for payables
Different types of Journals

Transactions that are not recorded in the

special journals mentioned are recorded
to general journal

Depreciation Expense is an allocation

of cost of the owner’s asset attributed to
it earning revenue
Different types of Journals

Straight Line Method – total cost of

asset divided by the estimated useful life
of the asset
Generally a journal entry includes

•The effective date of the transaction

•The amount and the specific account from
which the transaction will be debited
•The amount and the specific amount to
which the transaction will be credited
•The description of the transaction
•Any reference such as check number of the
payment or voucher number of the
transaction