Journals, Ledgers, and Cash Books

£ 300 credit

£225 credit

£225 debit

£300 debit

Withdrawal of money from business by owner

Sale of goods on credit to new customer

Purchase of machinery for cash for business use

Purchase of vehicle on credit for business use

More time is spent on entering the transactions in both books and ledgers

Having a dual system allows tighter controls to prevent fraud and theft within the firm

Transactions cane be more easily verified

Day books and ledgers act as a backup for each other in case information is lost

Creditor

Customer

Banker

Agent

Two

Three

Four

Five

Posting

Journalizing

Balancing

Entering

Ledger

T account

Day book

Compound entry

Balance sheet as at 31 December 1998

Balance sheet for Clayton Ltd for year as at 31 December

Clayton Ltd, balance sheet as at 31 December 1998

Balance sheet for Clayton Ltd as for the year ended 31 December 19998

Combined entry

Simple entry

Compound entry

Double entry

Supplier’s ledger

Purchase ledger

Both (a) and (b)

Sales ledger