Cash Books & The General Journal | Accounting for GCSE/IGCSE - Year 11 PDF Download

The Cash & Petty Cash Books

• Both the cash book and petty cash book serve as primary records.
• They document all transactions involving cash exchanges, with petty cash typically utilized for minor transactions.
• The bookkeeper sources information from various documents such as receipts, cheques and their counterfoils, paying-in slips, bank statements, and petty cash vouchers.
• Additionally, the cash book and petty cash book form integral components of the double-entry accounting system, distinguishing them from other primary records.

The General Journal

• The general journal, often called "the journal," serves as a record for all transactions not documented in other primary entry books.
• It includes various transactions like:
  • Opening balances during the inception of a business.
  • Introducing capital into the business.
  • Taking drawings from the business.
  • Purchasing non-current assets.
  • Selling non-current assets.
  • Correcting errors in previous entries.
  • Transferring balances to the income statement.

The layout of the general journal

How to Create a Journal Entry for a Transaction

• Step 1: Input the date of the transaction.
• Step 2: In the details column, record the names of the accounts to be debited. It's customary to list debit accounts before credit accounts.
• Step 3: Input the corresponding values in the debit column.
• Step 4: In the details column, record the names of the accounts to be credited. Typically, credit entries are indented.
• Step 5: Input the corresponding values in the credit column.
• Step 6: Ensure that the total debit amount equals the total credit amount.
• Step 7: Provide a narrative for the journal entry. This should offer a brief explanation of the transaction, particularly useful for non-regular transactions or error corrections.