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Chapter 4 · Workspace Source Documents, Books of Accounts, and Ledgers
Part II · Recording · Chapter 4

Source Documents, Books of Accounts, and Ledgers

No document, no entry. Master the paper trail — then route every transaction to the right journal and ledger with these online-exclusive drills.

Online-exclusive visual guides

1. Document detective — event ▸ paper ▸ book

Six everyday events at a laundry shop (new scenarios, not the book's repair-shop cases) and the trail each one leaves.

Business eventSource document createdRecorded in
Customer pays cash for same-day laundryInvoice (EoPT: the single primary document for goods AND services)Cash Receipts Journal
Hotel client takes weekly billing on 15-day termsInvoice (credit) — recorded even before collectionSales Journal
Shop buys detergent stock on accountSupplier's invoice + Receiving ReportPurchase Journal
Shop pays the detergent supplier by checkCheck voucher + Official documentation of paymentCash Disbursements Journal
Owner deposits the day's collectionsValidated deposit slipCDJ/CRJ-adjacent: Cash in Bank ▸ Cash on Hand entry
Month-end depreciation of washersJournal Voucher — internal document for non-routine entriesGeneral Journal

EoPT reminder: since RA 11976, the Invoice is the sole primary document for sales of goods and services alike — the old invoice-vs-OR split is gone.

2. The special-journal router

Four questions, asked in order, route any transaction to its book of original entry.

Q1 — Did cash COME IN?
Yes → Cash Receipts Journal (CRJ) — even cash sales.
Q2 — Did cash GO OUT?
Yes → Cash Disbursements Journal (CDJ).
Q3 — Sale on account?
Yes → Sales Journal (SJ).
Q4 — Purchase on account?
Yes → Purchase Journal (PJ).
None of the above → General Journal (adjustments, corrections, returns, depreciation…).

Ask the cash questions FIRST: a cash sale belongs in the CRJ, not the Sales Journal — the SJ is for credit sales only.

3. Chart of accounts — the numbering architecture

100s
Assets — 101 Cash on Hand, 102 Cash in Bank, 110 A/R, 120 Supplies, 150 Equipment…
200s
Liabilities — 201 A/P, 210 Notes Payable, 220 Utilities Payable…
300s
Equity — 301 Owner's Capital, 302 Owner's Drawings.
400s
Income — 401 Service Revenue, 410 Other Income.
500s
Expenses — 501 Salaries, 502 Rent, 503 Utilities, 504 Supplies Expense…
Why gaps in the numbers?

Numbering 101, 110, 120 (instead of 1, 2, 3) leaves room to insert new accounts later without renumbering the whole chart — the same reason building floors skip unit numbers.

Flow to remember: Source document → Journal (book of original entry) → Ledger (book of final entry) → Trial Balance. Subsidiary ledgers (per-customer A/R, per-supplier A/P) must always total to their general-ledger control account.

Practice tools

Tool 1 · Journal Router drill

Route each transaction to its book of original entry.

Tool 2 · Subsidiary-ledger reconciler

The A/R control account shows ₱48,500. Enter each customer's subsidiary balance and check whether the books tie.

Quiz · Twenty brand-new items