Control Accounts, Bank Rec and Inventories Flashcards
What is included on the Dr and Cr sides of the RLCA?
Debit:
Credit Sales
Interest charged to Debtors
Credit:
Bank/Cash
Discounts Allowed
Sales Returns
Bad Debts
Contra
Bal c/d
What is included on the Dr and Cr sides of the PLCA?
Debit:
Discounts Received
Purchase Returns
Contra
Bal c/d
Credit:
Credit Purchases
Interest charged by creditors
What is included on the Dr and Cr sides of the VAT Control Account?
Debit:
Purchases
Sales Returns
Cash Purchases
Other Expenses
Irrecoverable Debt
Credit:
Purchases Returns
Cash Sales
Other cash income
What is the double entry for contra?
Debit - PLCA
Credit - RLCA
What is the difference between a RLCA and Subsidiary Receivables ledger?
RLCA - Balance owed by all customers together.
Subsidiary Receivables ledgers - Balance owed by each individual customer.
When reconiling using the Bank Statement if the ledger has a credit balance what is the effect on the T account?
The balance on the T account will be a Debit and vice verca if the account has a debit balance then on the T account it’ll be a credit
What is the double entry for inventory?
Dr Closing Inv SFP
Cr Closing Inv SPL
How to work out gross profit on SPL?
Sales - Cogs = Gross Profit
How to work out COGS?
Opening Inventory + Purchases + Carriage inwards - Closing Inventory
When preparing a journal for closing inventory, what pricing should you use?
Whichever is lower between the cost or the net realisable value
What is included and not included in a cost of an item of inventory?
Included:
Cost of purchase inc delivery
Cost of conversion inc Direct labour
Other costs involved in bringing the inventory to its location and condition.
Not included:
Storage costs of finished goods
Selling costs
How to work out Net realisable Value
Selling price - Cost of completion - Selling and distribution costs
If a question states that included in the inventory is a product which costs one amount but will be sold for a different amount what should the steps be?
Take out the incorrect value (the value which the product costs) and put back in the correct value
**If given the Sale price and the profit how do you work out closing inventory when the business is **not VAT registered?
Sale price - profit
If given the sale price including VAT and the profit how do you work out closing inventory when the business is VAT registered
Work out VAT
Selling price - VAT = Net price
Net price - profit = answer
