Chapter 4 Flashcards
What is a sales return?
when customer returns something
What do you have to do when a sales return happens?
reduce sales figure by amount returned
What are the two types of returns?
sales return and purchase return
What is a purchase return?
when something is returned to a supplier
What do you have to do when a purchase return happens?
reduce purchases figure by amount returned
What happens when a sales return was originally a credit transaction?
Dr sales
Cr trade reciveable
What happens when a sales return was originally a cash transaction?
Dr sales
Cr cash
What happens when a purchase return was originally a credit transaction?
Dr trade recivables
Cr purchases
What happens when a purchase return was originally a cash transaction?
Dr cash
Cr purchase
What are the two types of discount?
trade (bulk buy)
early settlement (prompt payment)
What is a trade bulk?
given as reduction as point of sale
What is accounted for during a trade bulk?
account for sale/purchase at reduced price
What is an early settlement?
account for sale/purchase based on expected settlement
What happens if settlement is not as expected in an early settlement?
correction is made at point of settlement
What are the corrections for when early settlement of a sale is not as expected?
any difference between expected proceeds and those actually recieved are recognised as an adjustment to revenue
What are the corrections for when early settlement of a purchases is not as expected?
any difference between expected payments and those actually made are recognised as an adjustment to purchase
What are the two things employers pay?
gross salary and employers national insurance contributes (NICs)
What are the three parts to a gross salary?
net salary
income tax (PAYE)
employees NICs
What are the three things that are paid to the government as tax?
income tax (PAYE)
employees NICs
employers NICs
What is paid to the employee?
net salary
Total staff costs = ?
gross salaries + employers NICs
What does NICs allow?
when paid, allows employee to qualify certain benefits such as state pension
