Chapter 3: Accounting for sales & sales returns Flashcards
Accounting for Sales & Sales returns
What specific stages of recording & presenting financial transactions does the accounting system contain?
- Financial Documents
- Books of Prime entry
- Double Entry Book-Keeping
- Trial Balance
The financial documents relating to credit sales are
- Sales invoices
- Credit notes issued
What is the sales day book prepared from?
From Credit notes to customers.
What is the sales day book for credit sales?
The book of prime entry.
Recording credit sales in the double-entry system uses?
Financial Documents: Sales Invoices
Books of Prime Entry: Sales Day Books
Double-Entry Accounts: General Ledger
Memorandum Acounts: Sales Ledger
Analysed Sales & Sales Returns day books are used when?
When a business wishes to analyse it’s sales between different departments or
Different categories of goods sold / services supplied.
Financial Documents?
Source Documents for the accounting records
Books of prime entry?
The first accounting books in which transactions are recorded
Coding?
Cross-referencing methods used to trace transactions through the accounting system
Ledger?
Collection of accounts within the accounting system
Debit entry?
Records a gain in value
an asset
or an expense
Credit entry?
Records the giving of value
a liability
or an income item
Sales?
The sale of goods in which the business trades
Capital Income?
Income from items other than than the goods in which the business trades
(eg. a shop selling its old cash till)
Revenue income?
Income from the goods in which the business trades
Sales returns?
Goods previously sold on credit which are returned to the business by its customers
Sales returns day book?
Book of prime entry prepared from sales invoices
Sales returns day book?
Book of prime entry
prepared from credit notes issued to customers
Analysed sales day book?
Day books which incorporate analysis columns
(eg. between different departments
or
Different categories of goods / services sold)
General Ledger
Ledger section which includes
Sales account
Sales returns account
Sales ledger control account
VAT account
Sales Ledger
Subsidiary ledger section which contains the memorandum accounts of the firm’s receivables (customers)
Memorandum account?
A subsidiary ledger
(eg sales ledger)
account which provides a record of individual amounts
(eg owing by receivables to the business)
