Prime Entry

Introduction to Accounting Process

Accounting as a process
process of identifying, measuring, and communicating economic information to permit informed judgements and decisions by users of the information
The

Accounting as a process
Process of Accounting includes:

Identifying Classifying HOWRecording TO CLASSIFY? Summarising Communicating

Accounting as a process
In accounting, the first books of entry called as PRIME ENTRY Use to classify between the various transactions took place Purpose : to group data into a same nature for the purpose of summarising later

Classifications Process
DATA
CREDIT SALES RETURN INWARD

CREDIT RETURN PURCHASES OUTWARDS

GENERAL

CASH

RECORDKEEPING

Data are classified before its been recorded in the accounting books

Classifications Process
TRANSACTIONS
CASH BASIS NON-CASH BASIS Purchase Journal Sales Journal Return Outward Journal Return Inward Journal General Journal

CASH BOOK

Form of Journal
General Journal
Date Particulars
Maza Kia Sdn Bhd

How is it look?

Ref

Debit
10,000

Credit

1 Jan 04 Motor Vehicles

10,000
References Account Account Invoice # to be to be Co. purchased a Motor MEMO debited credited

EXAMPLE:

Date of Name of the On 1 January 2004, ABC Transactions Account Vehicles costing RM10,000 on Credit from Maza Kia Sdn Bhd

Form of Journal
Sales Journal
Date Particulars Ref

How is it look?

Amount
5,000

2 Jan 04 Menara Bhd

Date of Transactions

EXAMPLE:
Name of sold Debtors goods

Invoice #

ABC Co. to Menara Bhd on credit RM5,000 on 2 January 2004

Amount to be debited in for the Debtors Account

Form of Journal
Purchases Journal
Date
3 Jan 04 Nuri Bhd

How is it look?

Particulars

Ref

Amount
8,000

Date of Transactions

EXAMPLE:
Name of Creditors purchased

Invoice #

ABC Co. goods from Nuri Bhd on for RM8,000 on 3 January 2004

Amount to be credited credit in the creditors account

Form of Journal
Sales Return Journal
Date
4 Jan 04 Nuri Bhd

How is it look?

Particulars

Ref

Amount
100

Date of Transactions

EXAMPLE:
Name of Debtors returned goods

Credit Note

Nuri Bhd that previously sold Co. costing RM100 on 4 January 2004

Amount to be credited by ABC to Debtors Account

Form of Journal
Purchases Return Journal
Date Particulars Ref

How is it look?

Amount
200

5 Jan 04 Menara Bhd

Amount to be debited Date of Name of to Transactions Creditors ABC Co. returned goods that previously purchased Creditors Account from Menara Bhd costing RM200 on 5 January

EXAMPLE:

Credit Note

2004

CONCLUSIONS
There are 5 Journals in Accounting. Journals are deal with only credit transactions, whereas cash transactions will be recorded directly into Cash Book Journal Entries provide for easy reference and recording process in Accounting.

THE END