ZIMSEC O Level Principles of Accounts Notes: General Journal transferring to new books
- We have already looked at some of the uses of the General Journal
- which is sometimes simply called the Journal or Journal Proper
- We have also looked at an example where we made different types of entries into the Journal
- Another use not illustrated in this example is where the Journal is used to transfer entries to new books
- This was a prominent use in the days when accounting books where actual physical books
- Nowadays the journal is also used by a business that was not keeping proper accounting records and now wants to start to do so
- Consider the following example:
P Chiyanga has been in business for some years without keeping proper records. After talking to his nephew who is doing Accounting at a nearby school he has now decided to keep a double entry set of books. On 1 July 20X7 he establishes that his assets and liabilities are as follows:
- Van $3 700, Fixtures $1 800, Stock $4 200,
- Debtors : A Runesu $95, Z Zengeni $45,
- Cash at Bank $860
- Cash in hand $65
- Creditors : Mohammed Mussa 129, Econet $410
Required:
- Calculate P Chiyangwa’s capital in this business
- Draw up the journal entries required to open a new set of books
- Show the opening entries in the various ledgers
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