Original entry books, such as registers, journals, and ledgers, are used by accountants to record and separate business transactions. Public organizations use accounting records for fund accounting, while private companies may not use them frequently. The general ledger is the most important book of original entry and must match each journal for adherence to national accounting principles. Double-entry bookkeeping principles are followed by using debits and credits for each entry.
An original entry ledger represents a physical location where accountants enter financial transactions. These books include registers, journals, and ledger books, although other items may be an original entry book. Accountants use these books to separate business transactions by type. Each ledger allows accountants to keep accurate records for many types of transactions and to create specific reports using this information. Knowing which book to use and understanding its importance are essential when recording and reporting a company’s financial information.
A record is not necessarily a classic term for an original entry book. Although private companies may not use these books frequently, public or government organizations may have more use for them. Each record is linked to a fund, which the public organization uses to pay for specific items. General use, payroll, maintenance, and special projects are some common funds that may have accounting records. Public organizations use accounting records for fund accounting because the appropriated funds cannot have any use outside of their intended purpose.
Magazines are usually among the most common original entry books. An accounting journal provides a chronological record of business transactions. Accountants record each transaction using the date of occurrence, which provides the chronological history of these transactions. Journals include cash receipts and disbursements, general transactions, payroll, and other similar types as needed by the business. Journals provide a background for the creation of financial statements and reports.
The general ledger is perhaps the most important book of original entry in accounting. The general ledger contains the aggregate total of each journal in use by the company. It is the primary source for reporting and reviewing information related to business activity. This book is also subject to external audit, with auditors getting the information from the ledger to the journals. Aggregate general ledger totals must match each journal for the company to properly adhere to national accounting principles.
Accounting principles generally allow a business to create and use whatever original entry books it needs to record business transactions. The main standards companies must follow include using debits and credits for each entry and showing that all debits and credits are the same in total. These standards are the principles inherent in double-entry bookkeeping, the main accounting method that companies use to record transactions. The use of registers, journals, and ledgers meets these requirements. Each transaction often affects two or more of these original entry books.
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