Understanding Bookkeeping

Book Of Original Entry:

(A) GENERAL JOURNAL

Transaction(s) recorded :

1. Opening entries
2. Closing entries
3. Adjusting entries
4. Correction of errors
5. Transactions not recorded in other special journals

Related Source Document(s)

1. Invoice received and invoice issued
2. Memo
3. Other relevant documents.

Salient point to note:

The reason for item 2 & 3 of source document is that they are specifically tied to any other original book of entry hence these are really “general” in nature. Though general in nature, the bookkeeper still need to record such transactions as they are relevant for the business.

Book Of Original Entry:

(B) PURCHASE JOURNAL

Transactions(s) recorded:

• Purchases of goods on credit

Related Source Document(s)

·         Invoice (Original)

Book Of Original Entry:

(C) RETURNS OUTWARDS JOURNAL

Transactions Recorded:

• Return of goods on credit

Source Document(s):

·         Credit note

Book Of Original Entry:

(D) SALES JOURNAL

Transaction Recorded:

·         Sales of goods on credit

Source Document(s):

·         Invoice, debit note

Book Of Original Entry:

(E) RETURNS INWARDS JOURNAL

Transaction Recorded

·         Return of goods by customer

Source Document(s):

·         Credit note