Chapter#1A: Review Of Bookkeeping Flashcards
What is Bookkeeping?
It’s the process of recording transactions and financial activities of a business
What are Invoices?
are documents issued by companies as evidence of transactions made
What is GST?
Canadian Goods and Services Tax
What is HST?
Harmonized Sales Tax
What is a Purchase Invoice?
is a record of purchase made by a company
What is a Sale’s Invoice?
it’s a record of the sales made by a company for goods and/or services.
What does the Sales Invoice include?
the date of sale the customer invoice number customer number Quantity Shipped Taxes Total Amount Due Terms of Sale
What does the Purchase Invoice include?
name of supplier business number company name and address Account number Invoice Date Quantities ordered Taxes Final amount due and Payment terms
What does N/30 mean?
the company may allow the customer 30 days to pay the invoice before interest is charged
What was 2/20 Mean?
it means the vendor may allow a 2% discount if the invoice is paid within 20 days of the invoice date
What does the Sale Journal allow you to do?
Record the entire transaction on one line
in what Journal is a Purchase invoiced entered into?
The Purchase Journal as a one line entry
in what Journal is a Sales invoiced entered into?
Sales Journal with enough info to identify the source of the entry, financial info and the customer
What is the Cash Receipts Journal?
to record all cash from customers payments on account
What is the Cash Disbursements Journal
to record all cash paid by the company to suppliers
What are the 3 ways you’ll likely enter cash disbursements
from checks, check stubs or copies of checks
What must you enter from a check?
an account number in lower left corner
What must you enter from a Check Stub?
the info should be on the stub
What must you enter from a copy of a check?
complete details should be recorded on the copy
What is one thing you must do when entering cash disbursements?
You must determine the reason
What are Accounts Payable Ledgers?
it lists all vendors to whom your company has charged purchases
What is the Accounts Receivable Ledger?
lists all customers and their outstanding balances for non-cash or on account sales made
When is the General Ledger Trial Balance Prepared?
once each month
Why is the general ledger Trial Balance Prepared?
to ensure the general ledger accounts are balanced
Why would the Accounts Receivable Ledger be updated daily?
is updated daily to enable the company to determine credit limits, give discounts on payments, and to keep up-to-date records of all customers.
Why do you age an Accounts Receivable Ledger Trial Balance?
To analyze how old the outstanding accounts are, for statement purposes and for collection purposes.
Why do sales and purchase invoices generally request the same information?
The sales invoice of the seller or vendor represents the purchase invoice of the purchaser. Since they are in effect the same, the same information is generally requested on both invoices.
