Books Of Prime Entry Flashcards
What is a book of prime entry?
The place where a transaction is first recorded in the books of the business.
Define sales day book
Is a list of the sales invoices that are to be processed for a given period
In its simplest form, what do the SDB comprise?
Just the names of the customers and the amount of the invoices issued in a particular week.
The SDB is a list, the totals of which are used to…
Preform the accounting entry
What does the SDB usually include?
Analysis columns showing how the total value of each customers invoice is made up
What columns are in an analysed sales day book?
Date of trans, customer name, ref column(code number of cust acc), invoice number, total including VAT as shown on invoice, VAT column, product 1, 2 etc, the total boxes
Define the sales returns day book
A list of the credit notes that are to be processed for a given period
What is the difference between sales day book and sales return day book
Instead of invoice number column, there will be a credit note number column
Define the purchase day book
A list of purchases invoices that are to be processed for a given period (a week)
What does the purchase day book compromise of
The names of the suppliers and the amount of the invoices received in the week
The purchase date book analysed should include
The date, the supplier, the reference, the invoice number, the total, the VAT column, product 1, 2, the total boxes
Define the purchases returns day book
This is similar to purchase day book, instead of having an invoice number, there will be a credit note number.
Define cash book
A cash book is a record of cash receipts and payments that can form part of the double entry bookkeeping system as well as being a book of prime entry
What are the various forms of a cash book?
Two column or three column cash book
What is the difference between a two column and three column cash book?
The three column introduces a discount column
How is a pro forma two column laid out
The left hand side records money recieved
The right hand side records money paid out
The date column is transaction date
The narrative column describes transaction
The cash column on left represents cash recieved whereas on the right shows cash paid
The bank on the left shows money recieved the bank on the right shows money paid
Define the analysed cash book
Is a cash book with additional columns for analysing principle sources and payments for cash into types of income and expense
How is a proforma analysed cash receipt displayed?
Date, narrative, reference, cash, bank, VAT, receivables and cash sales
How is a proforma analysed cash payments book shown?
Date, narrative, ref, cash, bank, VAT, payables, cash purchases, admin
Define discounts allowed day book
Is used to record the discounts that have not been deducted at the point of the invoice being recorded in the sales day book but instead were offered on a conditional basis. (Prompt payments)
What is the purpose of the discounts allowed day book?
To record the credit notes that must be issued due to the customer taking advantage of a prompt payment discount that have been offered.
What does a credit note deal with?
The reduction to the original foods value(net amount) and VAT.
What happens after a credit note is dealt with?
The total (gross amount) is then deducted from the receivable (credit customers) balance.
What is the discounts allowed day book used for?
A list used to perform the accounting entry.
How is a discounts allowed day book laid out?
Date, narrative, reference, total, VAT, net
Define discounts received day book
Is used to record the discounts that have not been deducted at the point of the invoice being recorded in the purchases day book but instead were offered on a conditional basis.. prompt payment
What is the purpose of the discounts received day book?
To record the credit notes that have been recieved due to the business taking advantage of a prompt payment discount that was offered.
How is a discounts recieved day book laid out?
Date, narrative, ref, total, vat, net
Define petty cash
A small amount of cash that most businesses hold in order to make small cash payments.
Define petty cash book
Is one in which all petty or small payments made through the petty cash fund are recorded systematically
