Category: Ledger book

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Cash Book

We are listening many times about cash and money in any business because cash is the base of any business as it is in bank or in hand. so a successful business should keep its cash transactions very clear in a cash book for decision times to get more profits.

What is Cash Book

All accounting transactions should keep in a suitable place in book therefore all money transactions will keep in cash book. so any cash payment and cash receipt will record in cash book. Cash book is a separate accounting book that includes columns as: Date, Accounts, Description, Debit, and credit.

 

Cash Book Format

Typically, we can find two format for a cash book 1- Official format 2-Shop format.

In official format there are columns Date, Description, Debit and Credit but in shop format there are columns: Date, Description, Income and Expense.

Debit and Credit are used in accounting concepts and professional format but these terms are hard to understand for normal user so in shop format term Income will used for Debit and Expense Will used for Credit.

 

 

Official format of Cash Book

Official format of Cash Book

 

Shop format of Cash Book

Shop format of Cash Book

 

 

Types of Cash Book

  • Two Column Cash Book
    • This type, has two columns as Debit (Income) and Credit(Expense) for Only Cash account so it mentions to All money in hand and bank
  • Triple Column Cash Book
    • This type, has three columns as Debit, Credit, and a column for cash type ( cash in hand or cash in bank). Benefit of this type of cash book is to recognize where is cash? in hand or in bank and we can have more clear reports and statement of cash flow
Cash Book in Triple Column

Cash Book in Triple Column

 

Petty Cash Book

Petty cash is one of big volume account in any business because of much quantity of charge payments for daily charges of offices or..

However, in the most company, petty cash transactions keep in separate book as name petty cash book.

 

How to Use Cash Book

As you know, cash transactions are too much and everyday too many voucher will be recorded. so it is recommended to enter cash payments and cash receipt at the end of day and before leaving the job. Don't leave them to do in the next day because you will get more delay vouchers day by day so that will grow to huge quantity of vouchers and it will make more mistakes in big time working.

To read more about Cash Book Entry

 

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Identifiable Intangible Assets

This section deals with the various intangibles which can be identified as distinct and separate property rights. These assets can be contrasted to others, e.g., goodwill, which by virtue of being specifically unidentifiable, require special accounting considerations. List of Identifiable Intangible Assets Patents:  Granted by the Federal government, patents give the owner an exclusive right to manufacture and sell, or […]

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The Purchase Day Book

The Purchase Day Book We have already seen that the purchase ledger is a mirror image of the sales ledger. You will therefore not be surprised to learn that the purchases day book is a mirror image of the sales day book. Do not be confused if you find it called the purchases journal or some other […]

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Purchase ledger
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Purchase Ledger

If you have thoroughly understood the section on the sales ledger you will have no trouble at all understanding this section on the purchase ledger. This is because the purchase ledger is a mirror image of the sales ledger. It is used for invoices submitted to the business by suppliers.   The layout is similar to the accounts in the […]

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Sales ledger
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Sales Ledger

If you only have one customer, you will not need a detailed sales ledger, just one account in the nominal ledger. Nor will you need a sales ledger if your sales are entirely for cash. On the other hand, businesses that sell on credit may have many customers. For them, an efficient sales ledger outside the nominal ledger […]

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Sales Day Book
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SALES DAY BOOK

It is necessary to have a mechanism for posting sales invoices into the sales ledger and the nominal ledger. This could be done laboriously one by one, but it is better to group them together and cut down the work. This posting medium is usually called the sales day book, though you might find it called the sales journal or some […]

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Nominal ledger book
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Nominal ledger

This main ledger, which is often known as the nominal ledger, is explained in more detail, and the various posting mediums are explained. Nominal ledger Books of prime entry Nominal journal (or just journal) Sales ledger Sales day book Purchase ledger Purchase day book The Nominal ledger The nominal ledger is the principal ledger. Other ledgers may […]

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