Financial Accounting Flashcards
DE sales tax (making sale)
dr receivables (amount including tax)
cr sales tax account
cr sales account (excluding tax)
DE sales tax (purchase)
dr purchase account (exclude sales tax)
dr sales tax account
cr payables (includes tax)
trade discount
reduction in the amount paid for goods
NOT accounted for in accounting records
Customer not expected to take settlement discount
record at list price:
dr receivables
cr revenue
when discount is taken:
dr cash
dr revenue
cr receivables
when discount not taken:
dr cash
cr receivables
opposite if expected of customer to take discount
sales day book
credit sales
accrued expense
dr expense account
cr accrual account
DE prepayment
dr prepayment account
cr expense account
accrued income
dr accrued income account
cr income account
prepaid income
dr income account
cr prepaid income
DE issue at market price
dr bank (issue price * no of shares)
cr share capital account (nominal value * no shares)
cr share premium (issue price - nominal * no shares)
DE rights issue
dr bank
cr share capital
cr share premium
DE bonus issue
dr share premium/ retained earnings (nominal * no shares)
cr share capital (nominal * no shares)
DE irrecoverable debts
dr irrecoverable debt expense
cr receivables/sales ledger control account
DE irrecoverable debts recovered
dr receivables/ SLCA
cr irrecoverable debt expense
dr bank
cr SLCA
dr bank
cr irrecoverable debt expense
DE allowance for receivables
dr irrecoverable debt expense
cr allowance for receivables
increase in allowance for receivables
dr irrecoverable debt expense
cr allowance for receivables
decrease in allowance for receivables
dr allowance for receivables
cr irrecoverable debt expense
DE NCA
dr NCA account
cr cash/bank/payables
DE depreciation
dr depreciation expense
cr accumulated depreciation
Steps to account for revaluation
restate the asset cost to the revalued amount and transfer the increase to revaluation surplus account
remove any accumulated depreciation provision at the revaluation date and transfer to the revaluation surplus account
recalculate the current year depreciation charge on the revalued amount
impairment (no depreciation)
dr SOPL expense account
cr NCA accont
impairment (with depreciation)
dr SOPL expense account
cr accumulated depreciation and impairment account
DE for disposal of NCA
dr disposal account
cr NCA account
dr accumulated depreciation account
cr disposal account
dr cash account
cr disposal account
DE SLCA
dr sales and balance bd
cr bank cash from customers
cr irrecoverable debt written off
cr contra
cr bal cd
