Revision notes for Accounts Accn1

Very helpful, it has almost everything that you need for the jan exam good luck :) Plus there are all definitions.

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  • Created on: 05-11-12 19:36
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AQA AS Accounting
ACCN1: Revision notes
The accounting process:
1. Source documents: evidence that a financial transaction has taken place.
2. Day books: they are used to record day to day transactions.
3. Ledgers: these are T- accounts that are completed for all transactions.
4. Trial balance: must balance or else a suspense to correct missing figures.
5. Final accounts: Income statement and balance sheet.
Source documents:
What are source documents?
Source documents are evidence that a financial transaction has taken place.
Why do we need source documents?
To calculate profitability
To track movement of products such as inventory purchased from suppliers.
To complete the final accounts such as the income statement and balance sheet.
To calculate tax.
To compare the movement of cash over a period of time.
To complete day books, ledgers and excreta....
Different types of source documents
Paying slip counterfoil
Credit note
What source documents are used for what?
Invoice- It's a request for payment
Till roll- Evidence of cash sales
Paying slip counterfoil- Lodged cash in bank
Receipt- Paying a business expense with cash or requesting a repair person to complete job.
Credit note- A refund source document
Cheque counter foil- Paid an expense via cheque
Bank statement- Paid business expense such as rent via direct debit or standing order.

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Page 2

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Ledgers:
T accounts:
Dual aspect: For every credit there is a debit.…read more

Page 3

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Definitions:
A Direct Debit is when a variable amount of money is taken from your bank account.
The account holder gives authorisation to the bank for this transaction to take place.
A Standing Order is when a fixed amount of money is taken from your bank account
when the account holder gives authorisation to the bank for this transaction.
An expense accrued/ due is an outstanding debt that MUST be paid at the end of
the financial year.…read more

Page 4

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Going concern ­ a successful business that will foresee in the future.
Liability is something that you owe.
Current liability is a debt that must be repaid within one year.
Non-current liability is a debt that will take more than one year to repay.
Liquidity- the ability of the business to access sufficient cash resources to pay its
short- term liabilities.
Prudence- better to underestimate the value of the profit than overestimate the
value of the profit.…read more

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Questions on source documents and T- accounts
1. Bought Motor Vehicles for £13,000 by cash.
What's the source document?
What are the two T- accounts?
2. Rent and Rates paid via cheque, £300
What's the source document?
What are the two T- accounts?
3. Lodged cash into bank, £150
What's the source document?
What are the two T- accounts?
Answers
1) Receipt would be the source document.
2) Cheque counterfoil would be the source document.
3) Paying slip counterfoil is the source document.…read more

Page 6

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Brackets (around a figure) mean that it's a negative number.
****** is the cost. Stock means inventory the date tells you if it's opening or closing
inventory.
P for purchases, C for carriage in, OI stand for Opening Inventory
LPR stands for less purchase returns, LCI stands for less closing inventory
LSC stands for less cost of sales
This is where you have the expenses.…read more

Page 7

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Insurance
Advertising
Premises
Bad debt
Carriage out
Motor Vehicles
Light and heat
Other expenses
Trial balance…read more

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Page 9

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Purpose of a trial balance:
a) To check the accuracy of the double entry bookkeeping system.
b) To check the arithmetic accuracy of eth D.E.B.K SYSTEM
c) To complete the final accounts for the business which are an income statement
and balance sheet
Examples of Additional adjustments on the income statement
Straight Line Deprecation or Cost Depreciation
1) Closing Inventory on December 31st 20121 is £4,500.…read more

Page 10

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­ 1,800 = £6,800
4) The business owners receive a cheque for £700 from a debtor
Working
(3,200) + 700 = (2,500)
5) Motor vehicles are depreciated by 10% per annum straight line and the residual value is
£2,000
Working
55,000 ­ 2000 / 10 = 5,300
6) The annual wages are £2,400 prepaid till May 2013
Working
2,400 / 12 = 200 * 5 = 1,000
18000-1,000 = 17,000
7) Annual rent and rates due of £3,300 till April 2013
Working
3,300 / 12…read more

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