Books of Accounts

The records that are used and kept by the business in storing
all the accounting data are called Books of Accounts. These
books are with ready or prepared design to fit the need of the
business and also to provide convenience for the accountants
in pursuing the primary objective of accounting which is
communication through the Financial Statements.
 2 Types of Books
1. Book of Original Entry - also called JOURNAL . It is the book where
transactions are recorded for the first time
2 Kinds of Book of Original Entry

A. General Journal – even special journals are used this will still be
used but it is limited to recording of transactions which cannot be
recorded in the above mentioned books.

B. Special Journal - is a book of original entry but is used in

recording only one kind of business transactions. A columnar is
used for this purpose.
 Kinds of Special Journal
A. SERVICE CONCERN

1. Cash Receipt Book – only transactions involving receipts of

cash are recorded in this book

Source Documents:

• Owners official receipt

2. Cash Disbursement Book – only transactions
involving cash payments are recorded in this
book

Source Document:
■ Voucher
■ Check
■ Supplier’s official receipt
■ Deposit slip
■ Confirmation/Payment Slip
3. Journal Book – transactions that do not
involve cash

Source Document:
■ Suppliers Sales/Charge Invoice
■ Promissory Note
4. General Ledger – the home of all accounts
Worksheet
2. Income Statement – is a
financial statement which
shows the performance of
the enterprise for a given
period of time. It is also
known as the results of
operations of the
enterprise.
1. Balance Sheet – is a
financial statement which
shows the financial position
of an enterprise as of a
particular date. It measures
and evaluates in terms of the
enterprise liquidity,
solvency, financial structure
and capacity for adaptation.
3. Statement of Changes
in Equity – is a financial
statement that
summarizes the changes
in equity for a given
period of time
4. Statement of Cash Flow –
a financial statement which
shows the inflow and
outflow of cash. Receipts
are inflows while
disbursement are outflows.
 7th Steps
Closing Entries – signaling the end of an accounting period and
the preparation of post-closing trial balance to ensure the
arithmetical accuracy and correctness of the balances of accounts
after closing entry has been done and to facilitate the preparation
of the next or new accounting period.
 Procedures in Closing the nominal accounts
Step 1. Close the nominal accounts. Since Income has a balance of a credit, to close is to debit the said
account.
Closing entry:

December 31, Laundry Income P50,000

2022 Income & Expense Summary P50,000

To close revenue to the income & expense

summary account
Step 2. Close all expense accounts. Expenses have normal
balances of debit, to close is to credit the said accounts.
 Step 3. Foot the debit and credit entries of the INCOME
& expense summary account to the ledger. This will
result to a credit balance of 22,150 which represents
“Profit”. Close the Income & expense Summary to Capital
account.
Closing Entry:

December 31, Income & Expense Summary 22,150

2022 S. Santos, Capital 22,150
To close profit to capital account
 Step 4. Finally, close Drawing to Capital
account.
Closing Entry:

December 31, S. Santos, Capital 10,000

2022 S. Santos, Drawing 10,000
To close Drawing to Capital account
POST CLOSING TRIAL BALANCE
 B . MERCHANDISING CONCERN

1. Sales Journal – transactions involving sale of merchandise on

account or on credit terms are recorded in this book
2. Purchase Journal – transactions involving purchase of
merchandise on account or credit terms are recorded in this
book.
3. Cash Receipt Journal - only transactions involving receipts of
cash are recorded in this book
4. Cash Disbursement Journal - only transactions involving cash
payments are recorded in this book