1.2 Ledgers, Journals, Masters, and Transactions

All information entered into the accounting system is stored in files in the computer. There are two basic types of information kept in the computer.

First, there are files that keep information that would be kept on ledger cards in a manual accounting system. Examples are, files that contain customer information (names and addresses), files for keeping similar information for vendors, and the General Ledger account file. Since this information does not change a great deal, these files are also known in the computer accounting system as master files, and are constantly referenced by the rest of the accounting system.

The second type of file is a journal file. Journal files are used to record the accounting transactions that take place. Examples of journal files are, the file where invoices are entered (the Sales Journal), the file where vouchers are entered (the Purchases Journal), and the General Journal. These files usually have a great deal of activity in them, and records entered in these files are posted throughout the accounting system. In the computer accounting system, these files are also referred to as transaction files.

Another characteristic which differentiates masters from transactions, is the life of the records. Typically, master records will be kept for the life of the accounting system. In contrast, you would hardly keep invoices from 1959.

The computer accounting system uses two letter abbreviations to represent each of the different ledgers and journals that are used. These abbreviations are:

C/Books Ledgers

Ledger Code Ledger Name Contains

gl General Ledger General Ledger Accounts

ap Accounts Payable Vendors

ar Accounts Receivable Customers

in Inventory Inventory Product Codes

fa Fixed Assets Fixed Assets Codes

jb Job Cost Job Cost Codes

jc Job Cost Activity Job Cost Activity Codes

tx Sales Tax Sales Tax Accounts

em Payroll Employees Employees

C/Books Journals

Journal Code Journal Name Contains

gj General Journal General Journal Transactions

pj Purchases Journal Vouchers

sj Sales Journal Invoices

cr Cash Receipts Payments

cd Cash Disbursements Checks

dj Fixed Asset Depreciation Fixed Assets Depreciation Transactions

ia Inventory Adjustment Journal Inventory Adjustment Transactions

wp Work in Process Journal Work in Process Transactions

pr Payroll Payroll Vouchers

rs Receiving Slips Receiving Slips