Introduction to Accounting

Source Documents: Whenever a business transaction takes place, involving sales or purchases, receiving or paying money, or owing or being owed money, it is usual for the transaction to be recorded on a document. Source documents are the source of all the information recorded by a business.
Examples
Invoice, Credit Note, Debit Note, Goods Received Note,

Books of Original Entry: In the course of business, source documents are created. The details on these source documents need to be summarized, as otherwise the business might forget to make some payments, ask for money owed or even accidentally pay for something twice. It is therefore imperative to keep records of source documents of transactions. Such records are made in “books of original entry”. The books of original entry also called a daybook are a descriptive and chronological (diary-like) record of day-to-day financial transactions.
The main books of original entry are: o Sales Day Book (book of original entry for credit sales) o Purchase Day Book (book of original entry for credit purchases) o Sales Return Day Book (book of original entry for goods returned from customers) o Purchases Return Day Book (book of original entry for goods returned to suppliers) o Journal (book of original entry for credit sales) o Cash Book (book of original entry for cash receipts and payments. It records all transactions that go through the bank account) o Petty Cash Book (It records payments of small amounts of cash)

Double entry book keeping: is the method used to transfer our weekly/monthly totals from our books of original entry into the nominal ledger. The double entry system of book keeping ensures that every transaction is recorded twice in the accounts.
The basic rule which must allows be observed is that every financial transaction gives rise to two accounting entries, one a debit and the other a credit. The total value of debit entries in the nominal ledger is therefore always equal at any time to