Ch 4 - Single entry accounting

Question 1

What is the single entry accounting system?

Answer 1

• Used by small businesses to satisfy accounting needs
• One entry is made for every transaction that occurs in the business

Question 2

What are the two main journals of the single entry accounting system?

Answer 2

• Cash receipts journal
• Cash payments journal

Question 3

What is the cash receipts journal? (with examples)

Answer 3

• Records all cash receipts, regardless of the source of the cash
• eg: money borrowed via loans, capital, cash received on goods/services

Question 4

What is the cash payments journal? (with examples)

Answer 4

• Records all cash payments, regardless of the nature of the payment
• eg: drawings, loan repayments, assets purchased

Question 5

What is a source document?

Answer 5

Also known as business documents, are the source of financial information from the accounting system.
These are recorded under receipt no. or chq no.

Question 6

What are the source documents used for credit transactions?

Answer 6

• Purchase invoices
• Sales invoices

Question 7

What is a cheque?

Answer 7

A bill of exchange in which one party orders the bank to transfer the money to the bank account of another party

Question 8

What is a cheque butt?

Answer 8

All the information from the cheque is copied onto a cheque butt for the party who provided the cheque to keep

Question 9

How do you recognise as EFT receipt?

Answer 9

The EFTPOS identification numbers and last four digits of card used
eg: merchant number: 312 103
DEBIT ………. 1335

Question 10

How do you identify and invoice?

Answer 10

The invoice number

Question 11

What is a credit note/memo?

Answer 11

A document provided to buyer from seller to indicate they need to pay off the credit debt