The voucher system in accounting is a method of controlling payments made by a business. The system ensures only authorized payments are made and can be used for both goods and services purchased either on account or for cash.
3 Column Ledger Accounts
The 3 column ledger account adds a third column to the standard T account used in bookkeeping, in order that a running balance can be maintained on the account. The three columns are debit, credit and balance.
Different Types of Accounting
Accounting is a set of concepts and methods used to measure and report financial information about a business. Financial accounting and management accounting are different types of accounting used by accountants to present the information in alternative forms for different purposes.
Posting in Accounting
The business updates the ledger by copying each of the entries in the books of prime entry to the appropriate account in the ledger. This updating process is referred to as posting the general ledger.
Types of Accounts in Accounting
The double entry bookkeeping system categorizes accounts into personal and impersonal accounts. Impersonal accounts are then further divided into real accounts and nominal accounts. The purpose of using these types of accounts in accounting is to simplify the bookkeeping system.
General Ledger Accounting
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.
Opening Entry In Accounting
An opening journal entry is used to post the opening assets, liabilities, and equity of a business when it first establishes a double entry bookkeeping system.
Branch Accounting System
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.
Self Balancing Accounts 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.
Departmental Accounting System
Departmental accounting is used by a business to assess the profitability of each of its departments using either the gross profit, contribution, or net profit method.
Sales Return Day Book
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.
Purchases Returns Day Book
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.