COMMERCE LITERACY

What are books of prime entry?         Books of prime entry are books that are to be maintained to record transactions as and when they occur, so that we do not forget any transactions or post them twice. Books of prime are also known as special purpose subsidiary books or books of original entry . These are some of the main subsidiary books:- -          Cash book -          Petty cash book -          Purchase day book -          Sales day book -          Purchase return day book -          Sales return day book -          Journal proper What is a cash book?         Cash book is the book in which all the transactions rel...

What is a ledger?           After the transactions are entered into the books of prime entry , the next step is to prepare the ledger accounts . Ledger accounts are where all the transactions taken place in the business are classified into separate accounts. Ledger accounts are prepared in equal intervals (maybe every – day, week, month, quarter, once in two quarters, or every year). It all depends on the type of business. The organisation can decide in which interval they decide to prepare their accounts, and they should follow their routine without breaking it. Pro forma Dr                                              Name of the Account              ...