Accounting: Journal Book and Subsidiary Books

Questions and Answers

Recording and analyzing production costs

Preparing financial statements for external users (correct)

Investigating financial discrepancies and fraud

Internal budgeting and forecasting

Cost Accounting

Forensic Accounting

Tax Accounting

Managerial Accounting (correct)

Preparing financial statements for investors

Managing costs of goods sold

Ensuring compliance with tax laws

Examining financial discrepancies and fraud (correct)

Government Accounting Signup and view all the answers

Preparing tax returns and planning for future obligations Signup and view all the answers

To document cash and bank transactions Signup and view all the answers

Purchases Return Book Signup and view all the answers

To record cash discounts received Signup and view all the answers

They serve to classify transactions into relevant categories. Signup and view all the answers

Sales Book Signup and view all the answers

Study Notes

Financial transactions are recorded in original entry books called Journal Books.
Journal Books are subdivided into specialized books due to varying transaction categories.
Types of subsidiary books include Cash Book, Purchase Book, Purchases Return Book, Sales Book, Sales Return Book, Bills Receivable Book, and Bills Payable Book.

Single Column Cash Book: One column per side for cash receipts and payments.
Two Column Cash Book: Two columns per side for cash and bank transactions.
Three Column Cash Book: Three columns for cash receipts, bank receipts, and cash discounts (allowed on debit side, received on credit side).
Additional columns can be added for multiple bank accounts.

Classification involves grouping transactions of similar nature into account heads.
Transactions recorded in the Journal or Subsidiary Books are posted to the Ledger.
The Ledger contains individual account heads for consolidated financial transactions.

Trade Unions: Utilize financial reports for negotiating better wages and conditions.
Researchers: Analyze financial data to study market trends and business practices.

Financial Accounting: Prepares statements for external users; offers historical financial insights.
Managerial Accounting: Aids internal decision-making through budgeting and analysis.
Cost Accounting: Focuses on cost control related to goods or services.
Tax Accounting: Manages tax return preparation and compliance.
Auditing: Independent examination of financial statements for accuracy.
Forensic Accounting: Investigates financial discrepancies and fraud.
Government Accounting: Manages financial operations of government entities.
Fund Accounting: Used by non-profits for tracking fund usage.
International Accounting: Addresses global accounting practices and standards.
Environmental Accounting: Focuses on ecological impacts in accounting.

Assets: Resources controlled by an entity expected to generate future benefits (e.g., cash, inventory).
Liabilities: Existing obligations requiring resource use for settlement (e.g., loans, accounts payable).
Equity: Remaining value after liabilities are subtracted from assets; represents ownership stake.
Income: Economic benefits realized during an accounting period (e.g., sales revenue, interest income).
Expenses: Costs leading to a decrease in equity during an accounting period (e.g., salaries, rent).