Video Transcipt 6

Hello Friends,

Welcome back to Veera's Channel

I Hope you enjoyed our previous class on Balancing of accounts.

If you haven't watched, I strongly recommend to watch it before continuing with this class for better understanding

I'm posting the links of my previous classes in below Video Description, you could click on it and watch all my previous videos on accounting.

So today we are going to discuss on another important topic which is asked many times in interview that is nothing but contra entry.

WIth no further delay lets start.

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Today lets start with understanding what are Books of Orginal Entry

 First we learn what is a source document, so friends

A document which provides evidence of the transactions is called a source document or voucher,for e.g. cash memo, invoice, sales bills, pay-in-slips, cheques, salary slips, debit notes, credit notes, receipts etc.

Now after understanding what is source Document, let us understand about Books of orginal entry

The books of accounts where in transactions are recorded for the first time from a source document are called ‘Books of Original Entry’.

we already know what is source Document so books of orginal entry are nothing but recording the transactions in your accounting book for the first time from source documents like invoice, bills etc.

So where we record this transactions for the first time from source, we record them in the book called what Journal, we already discussed about how to enter the transactions in Journal, if you haven't watche it, please watch it.

If the business is small and transactions are less, then one person and one journal is enough for recording the transactions, but if business is big and transactions are more, one person and one journal are not sufficient to record the transactions, so we split the journal into subjournals

These are called as Subjournals or Subsidiary books and are also called as Books of Orginal entry

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Generally the journal is split into the following Sub journals or Books of orginal entry

we discuss about each and every book seperately in detail, so first let us talk about Cash Book.

In cash book we record all cash transactions, means we don't record any credit or debit transactions we only record cash transactions, that is if cash is paid or received during the transaction only such transactions are recorded.

This cash book is a Journal and Ledger- remember this point Cash book is the only subsidiary book which is both journal and Ledger, no other Sub journal or Books or orginal entry are ledgers they are just Journals

This is also frequently asked in written tests of interviews, so please make anote of this Cash book is Journal and Ledger

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We have three types of cash Books, The first one is Single Column Cash book, it's format is just similar to Ledger, we will have two amount colums one on credit side the other on Debit side.

The second type of cash book we have is Double column Cash Book, here we add one more column to single column cash book on both credit and debit side that is discount column to make it Double column cash book

Double column Cash book has one extra column compared to single column cash book that is nothing but discount column

Finally the third type of cash book is triple column cash book, here we add another column called bank column on both debit and credit side of double column cash book to make it triple column cash book

So this when we get Contra entry in triple column cash book, we see how we are going to get this in coming slides