TOPIC : 2 ACCOUNTING BOOKS

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TOPIC : 2 ACCOUNTING BOOKS by Mind Map: TOPIC : 2 ACCOUNTING BOOKS

1. DEFINITION

1.1. ACCOUNTING CYCLE

1.1.1. Process of recording business transaction

2. STEPS IN ACCOUNTING CYCLE

2.1. BUSINESS TRANSACTION

2.1.1. 1. Source Documents

2.1.1.1. Invoice

2.1.1.2. Receipts

2.1.1.3. Debit Notes & Credit Notes

2.1.2. 2. Books of original entry / day books

2.1.2.1. General day book

2.1.2.2. Special day book

2.1.2.3. Cash book

2.1.3. 3. Ledgers

2.1.3.1. General ledger

2.1.3.2. Special ledger

2.1.3.3. Acct Receivable

2.1.3.4. Acct Payable

2.1.4. 4. Trial Balance

2.1.5. 5. Adjustments

2.1.5.1. Bad debts

2.1.5.2. Bad debts recovered

2.1.5.3. Allowance/Provision for doubtful debts

2.1.5.4. Provision/Accumulated for depreciation

2.1.5.5. Prepayment and accruals

2.1.6. 6. Adjusted trial balance

2.1.7. 7. Financial Statement

2.1.7.1. Statement of Comprehensive Income

2.1.7.2. Statement of Financial Position

2.1.8. 8. Financial Reports

3. DEFINITION JOURNAL AND LEDGER

3.1. JOURNAL

3.1.1. A sheet in which all business transaction entries are recorded in chronological order.

3.2. LEDGER

3.2.1. The principal book for recording and totaling economic transactions measured in terms of a monetary unit of account by account type with debits and credits in seperate columns and a beginning monetary balance and ending monetary balance for each account.

4. TYPES AND USAGE OF SOURCE DOCUMENTS

4.1. SOURCE DOCUMENTS

4.1.1. Invoices

4.1.1.1. Used in credit transactions only

4.1.1.2. Issued by seller

4.1.2. Cash bills

4.1.2.1. Used in cash transactions only

4.1.2.2. Issued by seller

4.1.3. Credit notes

4.1.3.1. Used to inform the buyers that his or her account has been credited with the stated amount

4.1.3.2. Usually issued when there is a sales return or when the prices is overstated

4.1.4. Debit notes

4.1.4.1. Used to inform the buyers that his or her account has been debited with the stated amount

4.1.4.2. Usually issued when a sales price is understated

4.1.5. Receipts

4.1.5.1. Issued by a receiver of payment to the payer for payment made by cash or cheque

4.1.6. Vouchers

4.1.6.1. Used when a payment has been made but a receipt is not given by a receiver of payment (sellers)

4.1.7. Memos

4.1.7.1. Used as a notice when there is an increase in capital, drawings or other extraordinary event.

4.1.8. Cheque butt

4.1.8.1. Evidence that payment has been made by cheque