Alfred Ajibola
- Wed, 17th April, 2019 @ 3:29 PM
Topics in Accounts
Characteristics of Double Entry System Examples on the principle of double entry system Advantages and limitations of double entry system Scheme of work, Financial Accounting, SS1, Third Term Scheme of work, Financial Accounting, SS1, Second Term Scheme of work, Financial Accounting, SS1, First Term Differences between Bookkeeping and Accounting Journal: Contents, Format, Characteristics and Advantages of Journal Bank Wire and Wire Transfer Chart of Accounts Balance Sheet ReconciliationsAcademic Questions in Accounts
According to the principles of the dual entry system, an increase in asset is credited.
A. True
B. False
The followings are true on the double entry system of accounting except _____.
A. Errors can't be made
B. It can be time consuming
C. It can be used as an accounting reference
D. It can be used to control a company's expenditure
E. There is completion of account transaction
F. It isn't difficult to implement
With regards to bookkeeping and accounting, which of the following statement is incorrect?
A. Accounting covers the entire practice of finance management
B. Bookkeeping is a branch of accounting
C. Bookkeeping is a necessary requirement when making financial statement of account
D. Bookkeepers record financial transaction in a chronological order
E. Accountant earn higher salaries than bookkeepers
F. Accounting reports assist business managers in making a more detailed decision
The debited and credited accounts are written in which column of a journal?
A. Date
B. Particulars
C. Folio
D. Ledger
E. Amount
F. None of the above
A journal may also be referred to any of the following except _____.
A. Book of original entry
B. Book of primary entry
C. Book of first entry
D. Initial book
E. Day book
F. Chronological book
Which of the following statement is true concerning bank wire?
A. Another name for bank wire is cash transfer
B. The term 'wire' in bank wire signifies a computer based programmed message sent to a bank customer in regards to their account information, transaction and other important financial notifications
C. The International Bank Account Number (IBAN) must always be involved when carrying out a bank wire process
D. The term bank wire has no significant relationship with wire transfer
E. Cyber criminals cannot utilize bank wire threats like CSRS, phishing and whaling to achieve their fradulent act
F. All the above statements are true
The following are recommendations to follow during the process of balance sheet reconciliation EXCEPT _____.
A. All balance sheet accounts should be reconciled periodically, quarterly or annually
B. Comparing the trial balance of both the payables and receivables with the respective aging schedule
C. Analysis of enteries and relocating them to a sub-ledger if need be
D. Comparing the general ledger trial balance of the account to another source; for instance, a bank statement
E. Analysis of the differences in both accounts and making appropriate correction to ensure the correctness of entered information
F. None of the above
A journal, (also called book of original entry or book of primary entry or book of first entry or day book or chronological book) is defined as a book where daily transactions are recorded in a chronological order, that is: the order of occurrence.
A journal contains the total record of all transactions made by a company. It can be distinguished into different types. These are:
The contents of a journal include the following:
Please read on bookkeeping and accounting here.
The process of recording a transaction in a journal is called journalizing or journal entry. After transactions are entered in a journal, they should be transferred to the appropriate ledger account. The process of entering a journal into the appropriate ledger account is called ledger posting or ledger entry.
You can read on balance sheet reconciliations here.
The format for writing a journal will include the following headings:
This is the column that contains the date of a recorded business transaction. The date can take a variety of format. These are shown below:
10/03/19609
10 March, 1969
03/10/1969
1969/03/10 and so on.
This is also called the details column. The names of the debited and credited accounts are written here.
The debited account is preferably written on the left hand side and may end with the phrase 'Dr' which stands for debit.
The credited account is written towards the right and may include the phrase 'Cr' towards its end.
After the names of both accounts have been entered, a narration is often written below (inside a bracket) to give more details about the transaction.
When the journal had been transferred to a ledger account, the page number(s) of the ledger where both accounts had been posted are written in the folio column, adjacent to particulars column in the journal.
Once the ledger folio column had been entered in the journal, it will signify that the transaction was successfully transferred to a ledger.
Functionally, the ledger folio column aids in locating both accounts in the ledger, in addition to indicating a successful transfer from the journal to the ledger.
Please read on bank wire and wire transfer here.
The column for amount is divied into two. These are the amount debited and amount credited.
The amount debited is written in the first amount column while the credited amount is written in the second amount column. However, understand that both are written against the columns of their account names.
The structure below shows what the contents of journal should look like:
Date: 10/03/69
Particulars: Textile Acc. Dr | Dec Acc Cr.
Ledger Folio: 5
Amount (Dr): 1,000
Amount (Cr): 1,000
The recording of a transaction in a journal in which one account is debited while another is credited is called Simple Entry. Conversely, the recording of transactions in a journal in which two or more accounts are debited and two or more accounts credited is called Compound Entry.
Please read more on the principle of double entry here.
Below are the characteristics or features of journals:
The transactions are recorded as soon as they occurred.
Transactions are recorded chronologically.
A narration is often written below the accounts name.
Journal format includes the date of event, particulars, folio and amount.
The amount occupies the last two columns with the first (amount) representing a debited amount and the second, credited amount.
A ledger mistake can be corrected with a journal.
It brings about efficiency in the contents of a ledger.
A transaction in a journal can be easily traced chronologically.
Journal presents the full transaction entry.
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Amazing facts in Accounts
It is believed that bookkeeping is the only English word to contain three sets of double letters repeatedly
Notable points in Accounts
Below are the limitations or disadvantages of double entry system of accounting:
Increased usage (and cost) of books of accounts.
The accounting process can become complex.
Mistakes are possible.
Recruitment and payment of a professional may be required.
It can be time consuming.
Double entry system of accounting is defined as one that shows recorded transactions at both sides (Debit - Dr.) and (credit - Cr.) of the entries with both having equal values.
Double entry system is also termed as Dual system of accounting.
Bookkeeping can be defined as all the activities that have to do with the orderly classification and recording of financial data or business transaction.
Bookkeeping assist the process of accounting via the taking of an accurate record keeping.
Accountingis a field of study that covers the entire process and practice of managing the finances of an individual or an organization.
In smaller organizations, a bookkeeper’s job may go beyond simple transaction recording, as they may also be involved in the accounting process of the organization. On the other hand, accountants may have to record financial transaction in addition to analyzing financial transaction.
Please read more on bookkeeping and accounting alongside their differences here
Below are the importance of bookkeeping in any organization:
It brings accuracy into the recordings of the daily business transaction.
They provide the information on which financial accounts are prepared.
Aside from its importance in business organizations, it can also be used by nonprofit organizations and individuals.
It can also take record of liabilities, assets and loans. This function of bookkeeping can be crucial for many businesses.
A journal, also called book of original entry or book of primary entry or book of first entry or day book or chronological book is a book where daily transactions are recorded in a chronological order (the order of occurrence).
A journal contains the total record of all transactions made by a company. It can be distinguished into different types which will include:
Sales Journal: For recording inventory and sales.
Cash Receipts Journal: For recording money received from sales or cash inventory.
Purchase Journal: For recording all purchases made by a company.
General Journal and so on.
The content of a journal include the followings:
The date when the transaction occurred.
The description of the transaction.
Debits
Credits
Accounts affected