So a quick recap. All the items that cannot come in the purchases and sales ledger have their accounts in the general ledger. Apart from these accounts sales, purchases, sales return and purchase return have their accounts in the general ledger as well. For the transaction mentioned and covered in the previous section of the accounting crash course, here are the entries in the General Ledger.
Machinery account
Bad debts account
Rent account
Rent payable account
Let’s record the following transactions in the general journal:
Apr. 5 Bought office equipment on credit from Silva worth $5000.
Apr. 10 We sold inventory to Vanessa on credit for $600. She is now unable to pay, instead she gave some computer equipments to cancel her debt.
Apr. 12 Returned office equipment worth $400 back to Silva.
Apr. 17 Harris’s cannot pay back his debt on goods sold to him worth $300.
General journal
This wraps up the introduction of General Ledger and General Journal as well as the integrative examples for other journals and ledgers covered so far. We hope that at this stage in the basic accounting crash course for small businesses you have understood the difference between Journals and Ledgers and the concept of original or prime accounting entry.