Chapter 1: Business Documentation Flashcards
Checking details on documents:
What is the three-way matching technique?
(1)Check the details on the sales order match those of the delivery note (2), which match the those on the invoice (3)
What are the three ledgers or books used in Bookkeeping?
Debtors
Creditors
Normal
Name the four types of accounts or pages in the ledgers
Assets
Liabilities
Expenses
Revenue
What is the accounting equation?
Assets = Liabilities
or
Assets = Liabilities and Capital
Name the three main Debit accounts
PEA-RLS
Purchasers
Expense
Asset
Name the three main Credit Accounts
PEA-RLS
Revenue
Liabilities
Sales
What are the six accounting steps?
- Source Documents
- Books of prime entry
- Double Entry- General Ledger
- Update Subsidiary Ledgers
- Trial Balance
- Financial Statements
Name the subsidiary ledgers
Sales Ledger
Purchase Ledger
What is the equation for calculating the Gross cost?
Gross=Net + VAT
What is the equation for calculation the VAT cost?
VAT= Net/%x20
What are the % for Net Gross and VAT?
Net=100%
VAT=20%
Gross= 120%
What are the 9 day Books?
- Discount Received
- Discount Allowed
- Purchase Day Book
- Purchases Returns Book
- The Journal
- Cash Book
- Petty Cash Book
- Sales Day Book
- Sales Returns
Name the General Ledger Accounts
Sales returns
Purchases
Sales
Purchases Returns
What are three types of business entities?
Sole Trader
Partnership
Limited Liability Company
What usually accompanies goods delivered to a customer?
Delivery Note
When is an invoice used and why?
An invoice is used in credit transactions to show how much is owned by the customer and when it should be paid.
When is a credit note used and why?
A credit note is used in credit transactions to show that less is owned than was originally invoiced
when is a remittance advice note used and why?
A remittance advice note is used in credit transactions to help the business receiving the advice note to identify which invoices and credit notes are being paid.
When are Petty Cash vouchers used?
To record payments of petty cash
Why are coding systems used?
To ensure accuracy of recording and filing
