Lesson Notes By Weeks and Term - Senior Secondary School 1

SUBJECT: FINANCIAL ACCOUNTING

CLASS:  SS 1

DATE:

TERM: 1st TERM

TOPIC: BOOKS OF ACCOUNTS

CONTENT

• The Ledger 
• The Journal 

Books of accounts are the books that are used in recording financial transactions in accounting. 

The books of accounts in use are:

1. The Ledger – The Principal book 
2. The Journal – The Subsidiary book 

The Ledger 

The ledger is the principal book of account which contains in a classified form, the permanent records of all the financial transactions of a business.

The recording into the Ledger are done in classified form using ledger accounts. 

Format of A Ledger Account 

The Ledger account is divided into two sides i.e. The Debit and The Credit.

Therefore in accounting entries are described as being ‘debited’ or ‘credited’ to particular accounts. Transactions are recorded in the Ledger based on the double entry principle.

The Journal 

The Journal is the subsidiary book of account into which credit transactions are first recorded before they are posted in totals to the Ledger.

The Journal therefore contains the temporary records of credit transactions:

Format of The Journal 

The recording of financial transactions into the Journal does not follow the double entry principle 

Cash Transactions are recorded directly into the Ledger while Credit Transactions are first recorded into the Journal (i.e. the subsidiary books) before being posted in totals to the ledger.

Diagrammatically the path of transactions can be represented as below: 

    Cash Transactions                 Credit Transactions 

    Ledger                     Journal 

EVALUATION 

1. Draw the format of a ledger account.
2. State three differences between the ledger and the journal.

READING ASSIGNMENT 

Simplified and Amplified Financial Accounting Page 41

WEEKEND ASSIGNMENT 

1. A book that contains the accounts for the financial transactions of an organisation is the    A. journal    B. ledger    C. folio     D. register 
2. The two fundamental books of accounts are    A. Cash Book and Petty Cash Book     B. Receipt and Invoice     C. Journal and Ledger     D. Notes and Coins
3. Which of the following is the principal book of account?   A. General Journal    B. Sales book    C. Purchases book     D. Ledger 
4. Which of the following is not contained in the Ledger?    A. date of transaction    B. description of the transaction     C. folio number of transaction     D. address of the customer 
5. The process of entering transactions from one book to another is   A. reading   B. posting   C. numbering    D. casting 

THEORY

1. What is a Ledger?
2. State two differences between the ledger and the journal.