BASIC ACCOUNTING RECORDS
The type of accounting records needed depends on the size and scope of the business. For any business except the smallest of enterprises, the services of a qualified accountant are usually required, but the following form the basis of any accounting system:
1 Cash Receipts Journal
A book that details all cash received and deposited the date received, from whom received and the relative classification of the amounts received:
- Cash sale
- Bank deposit
- Received on account and from a costumer
- Other receipts
2 Cash Disbursements journal
A book that details all cash disbursed and cheques issued, date disbursed, and to whom disbursed. Each amount disbursed is classified:
- Various expenses
- Loan payments
- Fixed asset purchases
- Payment of accounts payable
- Other disbursements
3 Payroll Journal
This book contains a sheet for every employee, that list:
- Name
- Address
- Social Insurance Number
- Rate of pay
- Date paid
- Gross pay
- Deduction for C.P.P., U.I.C., Income tax, etc.
- Net pay
- Number of payroll cheque (check)
The Payroll Journal also contains a summary of total payroll and total deductions for each period.
4 Accounts Receivable Ledger
This book contains the individual account of each customer who has purchased good on credit. Each customer has a ledger sheet that details:
- Name
- Address
- Phone number
- Credit information
- Date of sale
- Invoice number
- Date of payment
- Receipt number
- Balance owing
Periodically the individual balances are added up (usually once a month) and the total reconciled to the account receivable balance in the general ledger.
5 Accounts Payable Ledger
This book records the individual account of every supplier to whom money is owed. The information and procedures are identical to the account receivable ledger
6 Sales journal
To record sales both cash on account
7 Purchases Journal
To record purchases both cash and on account.
8 General Ledger
This book is the final point of the accounting system. The various amounts from the above 7 books are clarified and totaled. The financial statements are prepared from this book.Next: Basic Financial Statements