1. Frank Wood and Alan Sangster, Frank Wood’s Business Accounting 1, 12 th Edition, © Pearson Education Limited 2012 Slide 20.1 Chapter 20 Columnar day books

2. Frank Wood and Alan Sangster, Frank Wood’s Business Accounting 1, 12 th Edition, © Pearson Education Limited 2012 Slide 20.2 Learning objectives After you have studied this chapter, you should be able to:  Explain why organisations use columnar day books  Decide which basis is to be used for the selection of analysis columns for columnar day books  Write up columnar day books for sales, purchases or for any other aspect of an organisation

3. Frank Wood and Alan Sangster, Frank Wood’s Business Accounting 1, 12 th Edition, © Pearson Education Limited 2012 Slide 20.3 Learning objectives (Continued)  Write up columnar day books that include a column for VAT  Explain the advantages of maintaining columnar day books compared to ‘normal’ day books  Explain why the advantages of maintaining day books far outweigh the disadvantages of doing so

4. Frank Wood and Alan Sangster, Frank Wood’s Business Accounting 1, 12 th Edition, © Pearson Education Limited 2012 Slide 20.4 Columnar purchases day books  The purchase day book is solely for recording the original entry of purchases on credit.  This book will record all items on credit, such as purchases, stationery, non-current assets, motor expenses and so on.  It can be useful for a business to know how much was spent on the various types of items.  This is achieved by having a set of analysis columns in the book.

5. Frank Wood and Alan Sangster, Frank Wood’s Business Accounting 1, 12 th Edition, © Pearson Education Limited 2012 Slide 20.5 Columnar purchases day book (Continued)

6. Frank Wood and Alan Sangster, Frank Wood’s Business Accounting 1, 12 th Edition, © Pearson Education Limited 2012 Slide 20.6 Columnar purchases day book (Continued)

7. Frank Wood and Alan Sangster, Frank Wood’s Business Accounting 1, 12 th Edition, © Pearson Education Limited 2012 Slide 20.7 Columnar purchases day book (Continued)

8. Frank Wood and Alan Sangster, Frank Wood’s Business Accounting 1, 12 th Edition, © Pearson Education Limited 2012 Slide 20.8 Columnar purchases day book (Continued)

9. Frank Wood and Alan Sangster, Frank Wood’s Business Accounting 1, 12 th Edition, © Pearson Education Limited 2012 Slide 20.9 Columnar sales day book

10. Frank Wood and Alan Sangster, Frank Wood’s Business Accounting 1, 12 th Edition, © Pearson Education Limited 2012 Slide 20.10 Advantages of columnar day books Columnar day books enable us to do such things as: 1. Calculate the profit or loss made by each part of a business. 2. Draw up control accounts for the sales and purchases ledgers. 3. Keep a check on the sales of each type of goods sold. 4. Keep a check on goods sold in different locations, departments or sections. 5. Identify purchasers of each type of good offered for sale.

11. Frank Wood and Alan Sangster, Frank Wood’s Business Accounting 1, 12 th Edition, © Pearson Education Limited 2012 Slide 20.11 Learning outcomes You should have now learnt: 1. That columnar day books and analysis books are two names for the same thing 2. That columnar day books are used in order to show the value of each of the various types of items bought and sold so that the relevant accounts may have the correct amount entered into them

12. Frank Wood and Alan Sangster, Frank Wood’s Business Accounting 1, 12 th Edition, © Pearson Education Limited 2012 Slide 20.12 Learning outcomes (Continued) 3. That the columns in a columnar day book are chosen on the basis of what type of information an organisation wishes to be highlighted as, for example, in the case of a department or a major supplier 4. How to prepare a columnar day book for entry of the relevant data 5. How to make entries in columnar day books and transfer the balances at the end of a period to the appropriate ledger accounts

13. Frank Wood and Alan Sangster, Frank Wood’s Business Accounting 1, 12 th Edition, © Pearson Education Limited 2012 Slide 20.13 Learning outcomes (Continued) 6. How to include VAT in a columnar day book 7. That the advantages of maintaining day books far outweigh the disadvantages of doing so