Documents and Records
In addition to terms and concepts, you also need to know what documents and records are used to properly perform bookkeeping.
General Ledger -A book containing the accounts and balances for all of a business’s assets, liabilities, equity, revenue, and expense accounts.
Chart Of Accounts -A coded listing of all the accounts in the general ledger.
Journals -A preliminary record where business transactions are first entered into the accounting system. The journal is commonly referred to as the book of original entry.
Specialized Journals -Journals used to initially record special types of transactions such as sales, cash disbursements, and cash receipts in their own journal.
Trial Balance -A worksheet listing of all the accounts appearing in the general ledger with the dollar amount of the debit or credit balance of each. Used to make sure the books are “in balance” -total debits and credits are equal.
Subsidiary Ledgers-A separate record set up to record the individual items relating to a single general ledger account (control account). Examples include an accounts receivable and accounts payable ledger.
Worksheets-Forms which are used to summarize all the information necessary to complete the end-of-period financial reports and prepare other financial analysis.
Invoice-a business document showing the names and addresses of the buyer and the seller; the date and terms of the sale; the description, quantity, unit price, and total price of goods purchased or sold and the method of delivery.
Selling business refers to this document as a Sales Invoice.
Buying business refers to this document as a Supplier Invoice.
Receiving Report-A document originated by the buying business listing the quantities and condition of the goods and/or services received from a supplier.
Sales Order-A documented originated by the seller listing the goods and/or services ordered by a customer and other information such as prices and delivery dates.
Purchase Order-A document originated by the purchaser (buyer) requesting the supplier to ship goods or perform services.
Check Book-Formal record of all checks written, deposits, bank charges, and miscellaneous charges and credits.
Check-A written order directing a bank to pay cash from the account of the writer (drawer) of the check.
Bank Reconciliation-The process of bringing the checkbook and bank statement balances into agreement.
Bank Statement-A copy of the bank’s record of the business’s account showing the balance of the account at the beginning of the month, the deposits and withdrawals (mostly checks) made during the month, service charges, and the balances at the end of the month.
Next, Our Report Cards on the health of our business - Financial Statements