Introduction to Books of Accounts
Books of accounts are the records where all business transactions are written and organized.
There are two main types of books:
Journal – where transactions are recorded first.
Ledger – where transactions are grouped and summarized.
Books of Accounts
General Journal
General Ledger
Subsidiary Ledgers
Cash Receipt Journal
Cash Disbursement Journal
Sales Journal
Purchase Journal
Revenues and Expenses are Nominal or Temporary Accounts.They are not meant to carry balances forever.
Assets, Liabilities and Equity - Real or Permanent Account – balances stay year after year
Asset (Cash, Equipment, Accounts Receivable, etc.)
Increase → Debit
Decrease → Credit
Liability (Loans, Accounts Payable, etc.)
Increase → Credit
Decrease → Debit
Capital / Owner's Equity
Increase → Credit
Decrease → Debit
Revenue / Income (Sales, Service Revenue, etc.)
Increase → Credit
Expenses (Rent, Utilities, Salaries, etc.)
Increase → Debit
