I am trying to work through the case study within Lesson 5 on my Level 1 book-keeping course with Ideal School, and i am very confused with something.
Wendy Watson owns a wholesale electrical shop and provides her balance sheet as of 1st June, it then provides the transactions and where these should go in terms of ledgers, day books etc etc.
The 1st transaction is the one i am confused about - Ms Watson buys additional fittings for her shop from Blanko Ltd for £1,000 on 6 weeks credit terms.
They are saying this would be first entered in the journal then it will be debited to the furniture and fittings account in the the general ledger and credited to Blanko's account in the purchase ledger.
I don't understand why this would even be entered into the journey? I woukld have put this transaction straight into the ledger. In my lesson the only thing that was covered for Journals were makign entries for errors and bad debt.
I even shows this to someone who is a qualified accountant and is also confused with this?
Can anyone explain whether this is correct or if this is an error in the course?
Its because Ideal are teaching the use of the day books before bringing it together in the purchase ledger.
They are teaching you the proper way of doing things so credit to ideal there.
In the real world however where we have moved onto computerised bookkeeping the day books and the sales / purchase ledgers are pretty much treated as one and the same as the computer sorts all of this out for you.
Under the hood though there are important concepts buried in taking your first steps the long way around so that you know what is actually occuring before moving forwards.
learn evertything at this stage evn though this will in all likelihood bear little reflection on the job that you eventually do as you are being programmed to think in the traditional manner.
No issue with the Ideal course on this issue.
kind regards,
Shaun.
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
Marc, I hope what Shaun has said makes sense, but please don't hesitate to get in touch again if you have any further questions. If you are able to, sometimes phoning directly can get you moving forward far quicker than sending emails or forum posts, although Shaun has come in with a fairly rapid response.
