The general ledger is the central ledger in the double entry bookkeeping system. It includes all the accounts a business lists in its chart of accounts and records accounting transactions by account and then date order. A trial balance can be extracted from the general ledger which forms the basis for the production of the financial statements.
Branch accounting is used by a business to assess the profitability of each of its branches. The simplest method is for the central head office to operate a single branch account for each branch. The method is sometimes referred to as the debtors system or direct method system.
As the number of bookkeeping transactions increases an accounting ledger needs to be split into various subsidiary ledgers. Self balancing ledger accounting is a method of entering two sided transactions in each ledger using adjustment accounts in order that a trial balance can be extracted from each of the subsidiary ledgers.
The sales return day book is used to record goods returned by customers. The sales return book is not part of the double entry posting and is simply a chronological list of credit notes issued to customers and used to post the accounts receivable and general ledgers.
The purchase return day book is used to record goods returned to suppliers. The purchase return book is not part of the double entry posting and is simply a chronological list of supplier credit notes used to post the accounts payable and general ledgers.
In double entry bookkeeping each account has a normal balance. The normal balance for items on the left hand side of the equation is a debit and the normal balance for items on the right hand side of the equation is a credit.
A trial balance will not balance if there are errors in the double entry bookkeeping system, To help find and correct the unbalanced trial balance a number of different shortcut techniques can be applied.
The bank transaction journal entries below act as a quick reference, and set out the most commonly encountered situations when dealing with the double entry posting of banking transactions. In each case the journal entries show the debit and credit account together with a brief narrative.
Last modified November 17th, 2017 by Michael Brown