Books Of Prime Entry Flashcards
What is petty cash
The small amount of cash that most businesses hold in order to make small cash payments.
What is the petty cash book?
Where all petty or small payments made through the petty cash fund are recorded systematically.
What is the discounts received day book?
Used to record the discounts that have not been deducted at the point of invoice but were offered on a conditional basis (eg: prompt payment discount)
What is the sales day book
A list of the sales invoices that are to be processed for a given period.
What is a purchases day book
A list of purchases invoices that are to be processed for a given period
What is a cash book?
The record of cash receipts and payments.
It can Form part of the double entry bookkeeping system as well as being a book of prime entry
What does SCLA stand for?
Sales ledger control account.
Just means “receivables”.
What is a discounts allowed day book?
Used to record the discounts that have been offered to customers on a conditional basis (so have not yet been deducted on the invoice)
What would be the column headings in the sales / purchases day books?
Date
Invoice number
Customer / Supplier name
Customer / Supplier code
Total amount
VAT amount
Net amount
What is the difference between gross and net amounts?
Gross: total balance including VAT
Net: value excluding VAT (the true sales price)
What does two column analysed mean?
There are separate columns for different types of transaction instead of one total column.
Eg: the cash book has separate columns for cash and bank
Are the following daybooks dealing with cash or credit transactions?
- sales day book
- sales returned day book
- purchases day book
- purchases returned day book
- cash book
- discounts allowed day book
- discounts received day book
- petty cash book
- sales day book CREDIT
- sales returned day book CREDIT
- purchases day book CREDIT
- purchases returned day book CREDIT
- cash book CASH
- discounts allowed day book CREDIT OR CASH
- discounts received day book CREDIT OR CASH
- petty cash book CASH
List 8 types of day book
Sales
Purchases
Sales returned
Purchases returned
Cash book
Petty cash book
Discounts allowed
Discounts recieved
Define casting and cross-casting
Casting: adding a vertical column
Cross-casting: adding a horizontal column
What is a sales returned day book?
A list of the credit notes that are to be processed for a given period
What is a purchases returned day book?
List of the purchase invoices that are to be processed for a given period
When would it be unnecessary to have a sales return day book and what would be done instead?
In businesses where sales returns are fairly low it would not justify keeping a separate sales returns daybook.
Instead any sales returns are recorded as negative values in the sales day book.
What does balance b/d mean?
Balance brought down
Would the total column of the daybooks include trade / bulk discounts?
Any discounts should be deducted before calculating the total
What is the difference between a 2column and 3column cash book?
3column cash books have an extra column for discounts.
Which side of a cash book is cash received?
Left hand is always money recieved
Are cheques and bank transfers included in the cash book?
Yes
What are analysed cash books?
A cash book with additional columns for organising sources of cash into different types
Eg: cash column (just cash) and bank column (cheque / bank transfer) both within the cash book.
Would trade or bulk discounts be recorded in the discounts allowed daybook?
No.
Define payable
A credit supplier (somebody who the business needs to pay)
Define receivable
Credit customer (somebody who needs to pay the business)
