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SS 1 Bool Keeping (1st Term)

book keeping

PRINCIPLE OF DOUBLE ENTRY

Definition: Double entry book keeping is the system of keeping account, which take advantages of the two-fold aspect of every transaction, whereby one account that receives is debited and another account, which gives, is credited. The following simple rules of double entry should be fully understood and memorized. for every credited entry in an account there must be a corresponding debit entry in another account. For every debit entry in an account, there must be a corresponding credit entry in another account. All transactions must be recorded in two accounts, one account is debited and another account credited.   APPLICATION OF THE PRINCIPLES OF DOUBLE ENTRY Any transaction involves two accounts. Receiving account or receiver. Giving account or giver. Dr. Receiving account With value it receives Cr. Giving account With value it gives out.   Illustration: Complete the following table. Account to be. Debited Credited i. Start business with N800… Read More »PRINCIPLE OF DOUBLE ENTRY

book keeping

CONTRA ENTRY

Contra is a latin word which shows that cash has been withdrawn from the office and deposited in the bank or withdrawals of cash from bank for office use. It is an entry involving the payment of cash into the bank and is denoted by “C” in the folio column. It may simply be defined as the transfer of an account to the identical side of another account. Payment of cash to bank. When too much cash is in the office, the whole or part of it can be paid into the bank. Effect                                                           Action Required Cash balance is decreased                          Cr. Cash column Bank balance is increased                            Dr. Bank column E.g: Jan. 1 cash balanced N300 Jan. 2 cash paid into the bank amounted to N710 Dr                                            Cash Book                                         Cr Date Particulars Folio Cash Bank Date Particulars Folio Cash Bank N N N N Jan. 1 Cash C 300… Read More »CONTRA ENTRY

book keeping

DOUBLE COLUMN CASH BOOK

Meaning: The two column Cash book so-called because for both debit and credit entries, it has two columns, one for recording cash transactions and the other for bank transactions. It is therefore used for recording mixed cash and bank transaction. Accounting Entries All payments in cash are recorded by crediting the cash column of the cash book. If the payment is by cheque the bank column is credited. When cash is withdrawn from the bank (e.g for paying wages and sundry expenses), the cash column is debited and the bank column is credited with the amount involved. Example: Record the following transactions in a two column cash book. Balance the cash book and bring down the balances of cash in hand and cash at bank at the end of the period. 19×9 April 2: Introduced N2,900 cash into the business as capital April 4: Paid N1,850 of the capital into… Read More »DOUBLE COLUMN CASH BOOK

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