Accounts Form 3 Flashcards
What is carriage inward
Transport costs of purchases (costs of goods sold)
Carriage outwards
Transport costs of sales (expense)
Cashbook
Cash account and bank account combined into one account having a column for cash and bank on debit and credit side
Cash discount
Decrease in amount owed given to encourage quick payment
Contra entry
Used in cashbook when both the debut and credit sides are used. When money is transferred from cash to bank or visa versa
Control account
Accounts used to check if any errors were made in the sales or purchases ledger
Credit note
Document sent when when goods are returned inwards. It is the source document for the returns inwards day book
Creditor/accounts payable/ trade payable
A person or business that are owed for goods bought from them on credit
Current assets and liabilities
Assets that can quickly be turned into cash (CA)
Amounts owing that must be paid back within a year
Day books
Books of original entry for sales and ourchases of good on credit and the corresponding returns inwards and outwards
Debit note
Document sent when good are returned outwards. Source document for returns outwards day book
Debtor/account receivable/trade receivable
A person/business that owes to the business for goods sold to them on credit
Discounts allowed
Reduction of price given to customers when they pay quickly. Cash discount
Discounts received
Cash discount received when paying a trade payable
Double entry
Process of entering every action taken by the business in two places. One debit and one credit
Final accounts/financial statements
End of year statement of profit or loss and state,net of financial position
Folio columns
Reference to the corresponding page, used in daybooks
General ledger
Book containing all accounts that don’t go to sales or purchases ledger
Gross profit
Profit made from buying and selling goods before expenses and revenue are accounted for
Impersonal accounts
Not personal accounts. Real/Nominal accounts
Impress system
System used in petty cash books where the amount spent is replaced each time so each period starts with the same,e amount in petty cash
Stat of pl
Statement prepared for an accounting period that calculates the gross and net profit made
Invoice
Document issued when goods are sold . sales invoice is the source document from which we draw up the sales day book . Purchases invoice is the source document from which we draw up the purchases day book
Journal
Books of original entry used to record non current assets bought and sold on credit. Writing off bad debts, correction of errors, to transfer amounts to the statement of profit or loss and any other extraordinary transactions
Net profit
Final order from stat of pl
Gross profit - expenses
Nominal ledger/general ledger
Book containing all accounts that don’t go into sales or purchases ledger
Non current assets
Assets bought for long term use in the business like cars
Overdraft
When more money is taken out of the bank account than is available
Personal account
Trade receivable or trade payable
Purchases day boook
Book of original entry for good bought on credit
Purchases invoice
Invoice received when purchases are made it is the source document from which we draw up the purchases day book
Real account
Account of items of property
Revenue expenditure
Money spent on the day to day running of the business
Sales invoice
Invoice when goods are sold . Source document used to draw up sales day book
Trade discount
Reduction in price to be paid when goods are bought in bulk
Trade payables
Amounts owing for goods bought on credit
Trade receiveable
Amounts owing by others for goods sold on credit
Trial balance
List of all account balances having debit and credit column, total of each should be equal
Which are the books of original entry
Sales, purchases, sales returns, purchases return ledgers
