Books used in accounting
Reference books help create a framework around your topic. They can help guide you in asking the right questions. Reference books can help researchers become more efficient database searchers in formulating which keywords (or search terms) to use. Scholarly reference books also contain bibliographies, a listing of some of the most respected secondary and most useful primary sources on a topic. In a nutshell…. reference books are a great way to begin your research. So I would like to recommend some reference book that I think will be useful in your learning process.
1.Financial Accounting A Decision – Making Approach written by Thomas E.King, Valdean C.Lembke& John H.Smith
This book contained decision model framework at the beginning of the chapter that linked to the topics covered through a series of decision questions which can make you understand what is the objective and what you can learn from that topic. It also contained personal view and business view that provides a somewhat whimsical link between one and more of the concepts presented in the chapter that will help students understand how the materials will be useful to them in their lives. Last but not least, it contained active-learning scenarios which challenge students to think about accounting in a different way and form their own conclusion and many hypothetical example are given to clarify the discussion and illustrate specific point in greater detail.
2.Accounting an Introduction written by Eddie Mclaney& Peter Atrill
This book contained numerous activities that are designed to stimulate the sort of quick-fire question that lecturer might throw at you during a lecture or tutorial. Towards the middle/end of the chapter there is a Self-assessment question can give you the opportunity to check and apply your understanding of the core coverage of the chapter. This book also contained review questions which are short questions requiring a narrative answer or discussion within a tutorial group. These questions can help you assess how well you can recall and critically ecaluate the core terms and concepts covered in each chapter.
3.Foundation Accounting written by A.H.Millichamp
This book provides a thorough understanding of the theory and practice of accounting at Foundation level. It presents all the information necessary for students to approach with confidence the foundation examinations of the professional and other bodies. It offers a complete first course in accounting. For example it provide exercises and assignment that suitable for computerised accounting packages, it have a summary and points of note made in the section that covers difficulties, exceptions and points that need emphasising that will help you to understand the whole chapter.
4.Financial Accounting written by Horngren, Harrison, Bamber, Best, Fraser & Willett
This book contained a clear, straightforward approach to the study of accounting. Extra care has been taken in writing to ensure the text is easier than ever for students to understand, a number of features, including a full-colour layout and design to further enhance the text’s accessibility for first-time accounting students. It also provides exercises the identified by topic and learning objectives cover the full spectrum of the chapter text and give additional assignment material that will help students familiar with the chapter.
5.Bussiness Accounting written by Frank Wood & Alan Sangster
This book contained learning objectives outline what will you need to have learnt by the end of the chapter. It also provides exhibits and activities that offer clear examples of accounting practice and methodology and test your understanding of new concept. Each chapter ends with a selection of practice questions to prepare you for your exam.
Recording transactions in the ledgers
Ledgers is a collection of an entire group of similar accounts in double-entry bookkeeping. Also called book of final entry, a ledger records classified and summarized financial information from journals (the 'books of first entry') as debits and credits, and shows their current balances. In manual accounting systems, a ledger is usually a loose leaf binder with a separate page for each ledger account. In computerized systems, it consists of interlinked digital files, but follows the same accounting principles as the manual system. I will be introduce the step of how to create a ledger below.
Step1 – Write a journal
A journal is often defined as the book of original entry. The definition was more appropriate when transactions were written in a journal prior to manually posting them to the accounts in the general ledger or subsidiary ledger. Here is an example of a journal:
Date Account Name Debit Credit
July 1 Bank 5000
Cash 1000
Capital 6000
2 Stationery 75
Bank 75
3 Purchases 2100
T.Smart 2100
Ext…
Remember to write your credit account a little bit away from your debit account like the example show~
Step2 – Drawing the ledger form
Ledgers break journal up into specific accounts, allowing you to see all of your transactions, like Cash, Accounts Receivable, Sales, on their own sheets. First you have to draw the form of ledger. It should have one horizontal line and one vertical line. The left side of it is debit side and the right side is credit side. Here is an example:
Debit Account Name Credit
Date Account Name Money Date Account Name Money
Account Name Money Account Name Money
|| || || ||
|| || || ||
Step 3 – Posting
The act of transferring the transactions from the journal to the respective accounts of ledger is called posting. The debit account of journal is posted in the debit side of that account and the credit account of journal is posted in the credit side of that account. For example if I want to post cash account, it would be like this:
Debit Cash Credit
July 1 Capital 500 July 2 Stationery 75
Step 4 – Casting
The amount of debit and credit of each ledger account is totaled separately in both sides. In this way totaling of debit and credit is called casting. If I want to cast the cash account, it would be like this:
Debit Cash Credit
July 1 Capital 5000 July 2 Stationery 75
5000 5000
Total up the amount by using the biggest number, in this case is 5000 on both side~
Remember both side have the same total number~
Step 5 – Balancing
After totaling of debit and credit of ledger accounts, it shows that total of both the sides is made equal putting difference of both sides the account is considered balanced. In this case nothing is left to be done. The act of equalizing the total of both the sides by adding debit balance in the credit side and the credit balance in the debit side is called balancing. Here is an example on cash account:
Debit Cash Credit
July 1 Capital 5000 July 2 Stationery 75
31 Balance c/d 4925
5000 5000
The balance will be calculated at the end of the month which is 31 July in this case~
c/d is carried down i.e. it is the balance of an account at the end of an accounting period, which will be taken forward to become the balance at the beginning of a new period. Please remember to write it~
Step 6 – Closing
After balancing the account, we need to close the account. The purpose of closing account is to prepare the temporary accounts for the next accounting period. Here is an example on cash account:
Debit Cash Credit
July 1 Capital 5000 July 2 Stationery 75
31 Balance c/d 4925
5000 5000
Aug 1 Balance b/d 4925
Balance will be carried down to the next month in this case August.
b/d is brought down show the closing balance as a line at the bottom of the account. Please remember to write it too~
Please remember Balance c/d and Balance b/d cannot be at the same side, they will be always opposite. If the Balance c/d at credit side then the Balance b/d must be debit side.
Example：
You are to enter up the necessary accounts for the month of May from the following information relating to a small printing firm. Then balance-off the accounts as at 31 May 2008.
2008
May 1 Started in business with capital in cash of $800 and $2200 in the bank.
2 Bought goods on credit from the following persons: J.Wards $610; P.Green $214; M.Taylor $174; S.Gemmill $345; P.Tone $542.
4 Sold goods on credit to: J.Sharpe $340; G.Boycott $720; F.Titmus $1152.
6 Paid rent by cash $180.
9 J.Sharpe paid us his account by cheque $340.
10 F.Titmus paid us $1000 by cheque.
12 We paid the following by cheque: M.Taylor $174; J.Ward $610.
15 Paid carriage by cash $38.
18 Bought goods on credit from P.Green $291; S.Gemmill $940.
21 Sold goods on credit to G.Boycott $810.
31 Paid rent by cheque $230.
Cash
May 1 Capital 800 May 6 Rent 180
15 Carriage 38
31 Balance c/d 582
800 800
June 1 Balance b/d 582
Bank
May 1 Capital 2,200 May 12 M.Taylor 174
9 J.Sharpe 340 J.Ward 610
10 F.Titmus 1,000 31 Rent 230
Balance c/d 2,526
3,540 3,540
June 1 Balance b/d 2,526
Capital
May 31 Balance c/d 3,000 May 1 Cash 800
Bank 2,200
3,000 3,000
June 1 Balance b/d 3,000
Rent
May 6 Cash 180 May 31 Balance c/d 410
31 Bank 230
410 410
June 1 Balance b/d 410
Purchases
May 2 J.Ward 610 May 31 Balance c/d 3,116
P.Green 214
M.Taylor 174
S.Gemmill 345
P.Tone 542
18 P.Green 291
S.Gemmill 940
3,116 3,116
June 1 Balance b/d 3,116
Sales
May 31 Balance c/d 3,022 May 4 J.Sharpe 340
G.Boycott 720
F.Titmus 1,152
21 G.Boycott 810
3,022 3,022
June 1 Balance b/d 3,022
G.Boycott
May 4 Sales 720 May 31 Balance c/d 1,530
21 Sales 810
1,530 1,530
June 1 Balance b/d 1,530
F.Titmus
May 4 Sales 1,152 May 10 Bank 1,000
31 Balance c/d 152
1,152 1,152
June 1 Balance b/d 152
Carriage
May 15 Cash 38 May 31 Balance c/d 38
38 38
June 1 Balance b/d 38
J.Ward
May 12 Bank 610 May 2 Purchases 610
610 610
P.Green
May 31 Balance c/d 505 May 2 Purchases 214
18 Purchases 291
505 505
June 1 Balance b/d 505
M.Taylor
May 12 Bank 174 May 2 Purchases 174
174 174
S.Gemmill
May 31 Balance c/d 1,285 May 2 Purchases 345
18 Purchases 940
1,285 1,285
June 1 Balance b/d 1,285
P.Tone
May 31 Balance c/d 542 May 2 Purchases 542
542 542
June 1 Balance b/d 542
J.Sharpe
May 4 Sales 340 May 9 Bank 340
340