Financial Transactions and Accounting System

Question 1

Accounting System

Answer 1

• all transactions recorded
• later can be summarised in statements
• create meaningful reports from data
• also help with tax returns, budgets
• need to provide useful/timely/accurate info

Question 2

Two type of Computerised Accounting Software

Answer 2

• Off-the-shelf - general use that can be used by businesses how they need it
• Bespoke - unique transactions/complexities so designed for their specific needs

Question 3

Adv of Computer Accounting System

Answer 3

• when one module updated all other related modules automatically update too

Question 4

3 Key features of Computerised Accounting System

Answer 4

• Controls
• Standing Data
• Account Codes

Question 5

Controls

Answer 5

• ensure data is recorded/processed as expected
• pre built in generally

Question 6

Standing Data

Answer 6

• info that does not change frequently
• customers/suppliers makes/addresses
• sales tax details
• credit limit
• only amended if advised that needs to be updated

Question 7

Account Codes

Answer 7

• all customers/suppliers have one
• all transactions given code to be posted to general ledger

Question 8

What are the two ways to access computerised accounting systems?

Answer 8

• Installed locally on computers
• cloud based accounting- held remotely and so can be accessed from wherever

Question 9

Quotation

Answer 9

• sent to customer
• states fixed price for goods/service
• can’t be changed once accepted

Question 10

Purchase Order

Answer 10

• details goods/services which company wishes to purchase
• one sent out/one kept to keep track of order

Question 11

Goods Received Note

Answer 11

• lists goods that business has received from supplier
• prepared by warehouse

Question 12

Sales Order

Answer 12

• details an order placed by customer for goods/services
• based on purchase order received

Question 13

Goods Despatched Note

Answer 13

• lists goods that company has sent to customer
• in case of any queries

Question 14

Supplier Statement

Answer 14

• lists all transactions
• including invoices, credit notes, payments
• allows accounts to be reconciled

Question 15

Credit Note

Answer 15

• in respect of goods returned or correction to invoice or overpayment
• negative invoice

Question 16

Debit Note

Answer 16

• formal request for supplier to issue a credit note

Question 17

Remittance Advice

Answer 17

• sent with a payment
• details which invoices paid and which credit notes offset
• confirms amount paid

Question 18

Receipt

Answer 18

• confirmation that payment has been received
• usually for cash sales

Question 19

Sales Invoice

Answer 19

• when business sells goods/services on credit send out
• details must match sales order
• request for payment

Question 20

Purchase Invoice

Answer 20

• when business buys goods/services on credit receives one
• details should match purchase order

Question 21

What should invoice show? (8)

Answer 21

• names/address of seller/purchaser
• date of the sale
• description of what is sold
• qty and unit price
• trade discounts
• total amount of invoice/sales tax
• due date/terms of sale
• settlement discount

Question 22

Users of invoices (4)

Answer 22

• customers as request for payment
• accounts department to match for payment
• warehouse to generate despatch of goods
• matched to sales order in sales department

Question 23

Why are GRNs key documents

Answer 23

can be used in estimating figure for accrued purchases as evidence of liabilities to pay for goods/services received
- can go into accruals accounts/ GRNI (Good received Not Invoiced)

Question 24

Petty Cash

Answer 24

• small amount of cash to make occasional small payments
• cash float
• needs to be recorded so not abused or stolen

Question 25

Imprest System

Answer 25

• money in petty cash kept at agreed sum/float
• cash + vouchers/receipts of payments = impress amount