Introduction into Bookkeeping - 1 Flashcards
What is a digital bookkeeping system
Electronic methods of recording financial transactions
What is a financial document
A term given to a document - such as an invoice - which results from a financial transaction
What is a cash sale
A cash sale or purchase is where payment is made straightaway
What is a Credit sale
A credit sale or purchase is where payment is made at a later date
What are books of prime entry
Where financial transactions is recorded for the first time eg, day books, cash book, petty cash book
What is a day book
These are books of prime entry listening the details of various financial transactions, eg. sales, sales returns, purchases, purchases returns and discounts allowed and discounts received.
What is a cash book
Book of prime entry which lists payments in and out of the bank account
What is a petty cash book
A book of prime entry which lists small cash business expense payments from an office cash fund
What is a ledger account
A ledger account is the formal accounting record for financial transactions involving individuals and business assets, expenses, income, liabilities and capital.
What is a double entry account
The ledger account set up on the double entry system ( a debit and a credit are both made)
What is the ledger
A book which contains the individual accounts
Further divide eg, receivables ledger, payables ledger and general ledger
What is a control account
The total accounts contained in the general ledger
What is a trade receivable
A customer who owes a business money
What is a trade payable
A supplier owed money by a business
What is an asset
They are assets owned by a business, eg a delivery van
