FAF3
Syllabus C. The Use Of Double-entry And Accounting Systems C2. Ledger Accounts, Books of Prime Entry and Journals

C2a. Uses of journals 1 / 3

Syllabus C2a)

Identify the main types of ledger accounts and books of prime entry, and understand their nature and function.

Journal Book

The journal keeps a record of unusual movement between accounts. 

It is used to record any double entries made which do not arise from the other books of prime entry. 

For example, journal entries are made when errors are discovered and need to be corrected and for period end adjustments (depreciation, bad and doubtful debts, accruals and prepayments).

The format of a journal entry is:

debit credit
$ $
account to be debited
account to be credited
narrative to explain the transaction

Memorandum Ledgers

The main purpose of memorandum ledgers is to know how much is owed by each particular customer or to a specific supplier at a point in time.

There are two main types of memorandum ledgers

  • Receivables Ledger

  • Payables Ledger

ACCA FA C2a Journal Book graph

Receivables Ledger

This ledger shows how much is owed to the business by each individual customer

sunshine co
date narrative sales cash total
$ $ $
oct 4 invoice 145 452.60 452.60
clouds co
date narrative sales cash total
$ $ $
oct 4 invoice 146 254.20 254.20
star & moon co
date narrative sales cash total
$ $ $
oct 4
oct 12
invoice 147

845.90


750.00
845.90
95.90

Payables Ledger

This ledger shows how much is owed by the business to each individual supplier.

jupiter co
date narrative cash purchase total
$ $ $
oct 1
oct 5
invoice j851
cash book

250.00
556.10
556.10
306.10
mars co
date narrative cash purchase total
$ $ $
oct 1 invoice m048

189.60
189.60
venus & co
date narrative cash purchase total
$ $ $
oct 1 invoice 0124

245.50
245.50