Double-entry system – meaning

Double-entry system - meaning

The double-entry system of bookkeeping refers to a system of accounting under which both of the aspects (i.e. debit and credit) of every transaction are recorded in the accounts involved. For each transaction, this means that a bookkeeping entry will have to be made to show an increase or decrease of the other item read more

The accounting ledger – meaning.

Duties of budget controller in the organization.

A ledger is a set of accounts. It contains all the accounts of a specific business enterprise. It may be kept in any of the following two forms:

(i) Bound ledger and

(ii) loose-leaf ledger

A bound ledger is kept in the form of a book that contains all the accounts. These days it is common to keep the ledger in the form of loose-leaf cards. This helps in posting transactions particularly when the mechanized system of accounting is used. read more

Meaning of account in accounting and book keeping.

Meaning of account in accounting and book keeping.

The account – transactions that take place in a business enterprise during a specific period may effect increases and decreases in assets, liabilities, capital, revenue and expense items. To make up to-date information available when needed and to be able to prepare timely periodic financial statements, it is necessary to maintain a separate record for each item. For e.g. It is necessary to have a separate record devoted exclusively to record increases and decreases in cash, another one to record increases and decreases in supplies, a third one on machinery, etc. The type of record that is traditionally used for this purpose is called an account. Thus an account is a statement wherein information relating to an item or a group of similar items are accumulated. read more

Accounting journal – meaning

Financial accounting revision question on basic accounting documents.

When a business transaction takes place, the first record of it is done in a book called journal. The journal records all the transactions of a business in the order in which they occur. The journal may, therefore, be defined as a chronological record of accounting transactions. It shows names of accounts that are to be debited or credited, the amounts of the debits and credits and any other additional but useful information about the transaction. A journal does not replace but precedes the ledger. read more