Accounting Unit 1

• Invoices - Sales or purchase day book General ledger
  • Sales - indicates a sale to a credit customer
  • Purchase - indicates a resource bought from supplier on credit
• Credit Notes -Sales return or purchase return day book
  • Issued - stock returned by customer to trader
  • Recieved - trader returned stock to supplie
• Cash book: Cash book ledger:
• Cheque Counterfoils - payments from the bank my trader
• Paying in Slips - money paid into the bank
• Bank statement
  • Direct debit that is set up by payee for a variable amount
  • Standing order that is set up by payer for fixed amount
  • Bank charges
  • Returned cheques from customers
  • Credit transfers for wages
  • Interest paid and recieved

Trial Balance:verifies the arthemetic accuracy by agreeing the debit and credit entires.

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  • If TB disagrees suspense account can be opened
  • Errors that can still occur: Orginal enrtry, Commission, Omission, Principle, Reversal

Bank Reconcilation: Process verifies the trader's bank balance in the cash book with the bank statement.

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  • Verify the opening & closing bank balances in the cash book
  • Check that unpresented items from last month have cleared this month
  • Prevents or discourages fraud by book keeper

Control Accounts: used to verift balance owed by debtors in SL/creditors in PL

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  • Errors that can still occur: Omission, Commission, Orginal entry

Enables trader to determine if a profit or loss is made, calculate capital