Books of Accounts
Books of accounts
primarily consist of journal and Ledger. Journal is used for recording the
transactions in first place and ledger is used to classify those recorded
transaction. It is important to remember that in ordinary business practice all
accounting record is knows as books of accounts.
Books of account is manual
accounting concept, in computerized accounting all information is kept or
stored in accounting software, therefore accounting software can be regarded as
books of accounts.
Types
of Books of Accounts
Books of accounts is
consist of two books i.e. journal & ledger.
1. Journal
First
book of account is journal, which is used to record the transaction in first
place, therefore is also known as book of original entry. Transaction is
recorded in journal with the help of debit & credit rules.
2. Ledger
Second
book of account is ledger, and ledger is used to classify the transaction.
Ledger basically contains different accounts. The transaction from the journal
is classified in these accounts.
3. No other Books of Accounts
Accounting
system does not contain any other book. Any other record would be a memorandum
record. However, normally in business all accounts related records is known as
books of accounts i.e. journal, ledger, trial balance, agreements, and
vouchers.
4. Summaries & Reports
Summaries
like trial balance and report (balance sheet and profit & loss account) are
not books of accounts. These summaries and reports can be generated or prepared
any time from the books of accounts i.e. journal & ledger.
