4: Ledger accounting and double entry Flashcards

1
Q

What are ledgers?

A

Ledger accounts record and analyse all the individual transactions of a business. Each transaction will be dated and recorded in chronological order using double entry.

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2
Q

What is the nominal ledger?

A

The nominal ledger groups together all the individual ledger (T) accounts

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3
Q

What is the duality concept?

A

Each transaction has an equal but opposite effect - Double entry bookkeeping.

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4
Q

What is the double entry acronym

A

DEAD CLIC

Debts increase= Expenses, assets, drawings
Credits increase = Liabilities, income, capital

Conversely, a debit will reduce liabilities, income and capital and a credit will reduce expenses, assets, drawings

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5
Q

What is gross vs net VAT and how is each worked out

A

Gross = Including VAT
Net = Excluding VAT

Gross = Net x1.2
Net = Gross/1.2

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6
Q
A
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