Question

when entering transactions into cash and credit journal systems, what entries need to take place?

Answer 1

Every Financial event brings at least two journal entries.Financial activity is recorded and reported with a double entry accounting system,Debit and Credit.Transactions are written,as they occur,in a voucher which are filed in the order of occurance of the transaction.A cash memo showing cash sale, an invoice showing sale of goods on credit,the receipt made out by the payee when cash is paid to him are all examples of vouchers.On the basis of this record ,first of all, one writes out which accounts are to be debited and which accounts are to be credited.This is done in the Journal.So journal is a record that keeps accounting transactions in chronological order i.e.as they occur.Debit refers to the left hand side and credit refers to the right hand side of the journal entry.The sum of debit side amount should equal the sum of credit side amount.

In a cash journal system ,entries are made only when cash is received or paid by debiting and crediting cash respectively.Whereas,in the credit journal system ,a record is made on the basis of amounts having become due for payment showing the expense having been incurred and a liability in that regard having arisen or amount become due for receipt showing the income having been earned and an asset in that regard having arisen.