AQA ACCOUNTING UNIT ONE
- Created by: katiexmc
- Created on: 02-05-14 10:21
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- ACCN1
- definitions
- assets
- non current
- owned
- not for resale
- Untitled
- kept for more than one year
- e.g. vehicles
- current
- owned
- for resale
- e.g. inventory
- kept for less than one year
- dont depreciate
- non current
- liabilities
- current
- owed
- payed within a year
- e.g. loan
- may have interest
- long term
- owed
- paid back in more than one year
- e.g. mortgage
- has interest
- current
- assets
- income statement
- 1 sales revenue
- 2 less returns in
- 3 total
- 4 cost of goods sold
- 5 opening inventory
- 6 purchases
- 7 less returns out
- 8 add carriage in
- 9 less closing inventory
- 10 total
- 11 total (3)- total (10) = gross profit
- 12 less expenses
- 13 total
- gross profit - total (13) = net profit
- remember
- depreciation expense is for the year in question ONLY. not the total depreciation
- straight line = original cost-residual value/ no.of years for depreciation
- accruals are added to the expense in question
- prepayments are subtracted from the expense in question
- depreciation expense is for the year in question ONLY. not the total depreciation
- add anything recieved
- balance sheet
- 1 non current assets
- original cost | depreciation so far | difference of above (net book value)
- 2 current assets
- accruals of income
- prepayment of expense
- 3 current liabilities
- accrual of expense
- prepayment of income
- 4 current assets - current liabilities = working capital
- 5 less long term liabilities
- 6 working capital - long term liabilities =net assets
- 7 financed by:
- 1 capital
- 2 capital introduced
- 3 retained profit (net profit from income statement)
- 4 less drawings
- total (should equal no.6 (net assets))
- 1 non current assets
- reasons for keeping and benefits of accounting records
- stakeholders and their interests
- external
- competitors
- are they making more or less profit and why?
- bankers
- lenders
- will they get repaid on time? and in full
- lenders
- customers
- quality products at reasonable prices
- community
- are they affecting the environment and are they providing jobs?
- suppliers
- will they continue buying their goods?
- competitors
- internal
- owner
- profitability
- employees
- pay rise and secure job
- managers
- salary
- promotions?
- owner
- external
- reasons for keeping accounting records
- to help the process of making final accounts (income statement and balance sheet)
- to provide enough information for HMRC so that they can take what is owed to them in taxes
- to provide information for banks and lenders, increasing the chances of securing a loan
- to ensure that enough profit is being made to pay trade payables
- to look at past data and predict future data to help with choices
- stakeholders and their interests
- subsidiary books, source documents and ledgers
- subsidiary books
- general journal
- purchase day book
- purchase returns day book
- sales day book
- sales returns day book
- cash book
- source documents
- cheque counterfoil
- business expense paid via cheque
- bank statement
- paid a business expense with direct debit or standing order
- direct debit is a variable amount leaving bank every month
- standing order is a fixed amount leaving bank every month
- paid a business expense with direct debit or standing order
- credit note
- returns
- paying in slip
- cash has been put into bank
- till roll
- evidence of cash sales
- reciepts
- paying a business expense with cash
- invoice
- request for a payment
- evidence a transaction has taken place
- cheque counterfoil
- subsidiary books
- trial balance
- debit and credit should be equal
- if they are not equal a suspense account is made
- the difference between the debit and credit sides of the trial balance is placed on the lower of the two sides . names 'suspense account'
- then a suspense account is created with the balance on the same side as it was entered in the trial balance
- an entry doesnt need to be made on the opposite side because then there would be a balance
- errors are in additional information
- draw both accounts that are used in the additional information
- correct the transactions and circle the adjustments
- if there is a circle on both the debit and credit side then the add.info doesnt go into the suspense account
- if there is a circle on just one side then the transaction goes onto the opposite side in the suspense account
- if there are two circles on one side then the amounts are added together and put onto the opposite side of the suspense account
- correct the transactions and circle the adjustments
- draw both accounts that are used in the additional information
- errors are in additional information
- an entry doesnt need to be made on the opposite side because then there would be a balance
- then a suspense account is created with the balance on the same side as it was entered in the trial balance
- the difference between the debit and credit sides of the trial balance is placed on the lower of the two sides . names 'suspense account'
- if they are not equal a suspense account is made
- record of all balances of all accounts
- purpose is to check the accuracy of double entry bookkeeping
- including arithmetical accuracy
- the final accounts are created using the trial balance
- errors
- not shown
- commission
- wrong person's account
- omission
- a transaction is completely missed
- reversal
- wrong side of account
- original
- wrong amount entered on both sides
- compensating
- two errors cancel each other out
- principle
- the wrong account
- TRIAL BALANCE WILL STILL BALANCE
- commission
- shown
- partial omission
- only one side of the transaction is missed
- calculation error
- in one account
- partial omission
- TRIAL BALANCE QUESITON
- DEFINTION
- 2 ERRORS NOT REVEALED
- Untitled
- 2 ERRORS NOT REVEALED
- DEFINTION
- not shown
- debit and credit should be equal
- control accounts
- sales ledger control account
- bal B/D on debit side
- any thing adding to what we are owed goes on debit side
- anything taking from what we are owed is put onto the credit side
- purchase ledger control account
- bal B/D on credit side
- anything adding to what we owe is put onto the credit side
- anything taking from what we owe is put onto the debit side
- sales ledger control account
- definitions
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