Solution 5.1 

Distinguish between books of original entry and ledger accounts

The books of original entry (‘day books’ or ‘journals’) are the books in which transactions are first recorded and are a list or record, in date order, of the transactions that occurred over a period of time.  At the end of a period of time the transactions recorded in the books of original entry are recorded in the ledger accounts. There is no double entry system for the books of original entry but the ledger accounts require the double entry principle.

Distinguish between the sales ledger and the purchases ledger

The sales ledger contains the accounts of all customers/debtors while the purchases ledger contains all trade creditors/suppliers accounts.

Distinguish between the general ledger and the general journal

The general ledger contains all revenue and expense accounts, and assets (except trade debtors), liabilities (except trade creditors) and capital accounts and is part of the second stage of the bookkeeping system.  The general journal forms part of the first stage of bookkeeping and provides a list or record, in date order, of the transactions that occurred over a period of time.

Distinguish between the cash book and the sales journal

The cash book records all payments and receipts that are transacted by a business whether in cash or by cheque.  The sales journal only records credit sales transactions.