In a journal similar mutations are put together. All changes to a bank account are therefore processed in the Bank diary. All purchases are processed in the Purchasing diary. The order of operation is then that the journal is updated from the journals and the ledger accounts are fed from the journal.
If several bank accounts are in use, a journal is often appointed per bank account; for example Bank ABN and Bank Rabo. Journals are hardly used nowadays. The journal is often updated immediately from a financial transaction and therefore the diary is skipped.
Ledger is the collective name for a number of general ledger accounts together. These are accounts on which similar items are processed. All vehicle costs for a specific period are therefore recorded on the G / L account Car expenses. After the end of the period (eg a year) the accounts are closed. If the general ledger account concerns an account that appears on the balance sheet, the final balance is the opening balance for the next financial year. If it concerns a general ledger account on which losses or gains are recorded, the final balance goes to the income statement and the balance of the account for the new financial year is by definition nil. A general ledger account has two sides, just like the balance sheet and the profit and loss account; left and right or in our jargon debit (left) and credit (right)
Four types of ledger accounts are distinguished:
• property accounts (are debited on the balance sheet)
• accounts of debt (are credit on the balance sheet)
• loss accounts (are debited to the income statement)
• profit accounts (are credit to the income statement)
The ledger is the heart of the accounting system
Assets and debts are recorded on a balance sheet. Various forms of presentation are possible. The horizontal form where the belongings on the left and the debts to the right are included. The vertical form with the belongings at the top and the debts at the bottom.
The balance of assets and liabilities is equity; this is recorded on the right side; it can be regarded as a "debt" of the company to the owners. Regarding the value of the assets and liabilities on the balance sheet, many (international) regulations exist for companies; see my accountability portal (part of valuation issues). The balance sheet forms the conclusion of a certain period (for example a year). The final position of a certain period also forms the starting position of the subsequent period.
The journal contains the details of financial transactions over a certain period. Here you will find the information that leads to the updating of the general ledger accounts. For example, the following information can be found:
• the date on which the mutation occurred
• the amount involved
• which ledger accounts need to be updated
• description of the nature of the mutation
In earlier days, the inclusion of cash at the bank would be included in the journal as follows:
27/5 to the bank an amount of € 500 to supplement cash.
Nowadays, a type of code (abbreviated spelling) is used, indicating which accounts must be updated and how. The full listing of the financial transaction is called a journal entry.
27/5
Cash € 500
To Bank € 500
The word "On" means that this account must be credited. With the above transaction, something special is going on. After all, both the journal and the journal Cash will make the same journal item mentioned above. See also diary. We must therefore, or remember that the post must be booked only once, or we must apply a trick. The trick is the simplest solution and consists of including in the general ledger of a Internal transfers account. See also crosspost. From the bank is then booked:
27/5
Cross costs € 500
To Bank € 500
and from the greenhouse:
27/5
Cash € 500
At Internal Transfers € 500
It is clear that the Internal transfers account is debited once and is credited once with the result that the balance is nil. We also call these kinds of accounts as controlling interim accounts.
The column balance is a tool to get from the general ledger accounts to the composition of the balance sheet and the profit and loss account. The column balance consists of the following parts:
test balance; it separately shows the debit and credit entries of the general ledger accounts; Tests (test) whether the sum of all flow rings and credits are in balance. Often, however, this trial balance is skipped and the balances of the general ledger accounts are immediately transferred to the balance balance.
Balance: is composed of the test balance; returns the balances (debit or credit) of the general ledger accounts. Profit and loss account; shows the results over the past period.
End balance; displays the assets and liabilities after the end of the period.
Here is a simple example of a column balance. The closure is formed by adding the result (in the example 2,500) to (or taking into account, in case of loss of) the equity. The equity is therefore increased by the profit over the past period.
An internal transfer is the case if a sum of money is transferred from a cash account to another cash account; for example, from a bank to a giro account or to a cash account.
The income statement is a representation of losses and gains. The presentation can take place in horizontal or in vertical form. See also balance. The losses are left; the winnings are on the right. The vertical form usually starts with the profits and the losses are then deducted thereafter. The balance is the positive or negative result over the past period.
A cost center is a (business) component (cost grouping) that provides a certain type of performance (function) for the production process. The cost centers can be divided into three types:
• auxiliary cost centers
• independent cost centers
• main cost centers
In e-Captain we only use the name cost center.
An organization is divided into a number of parts about which you want further information. Each component is considered a cost object and collects all costs it has to bear. In this case we speak of a cost center.
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