Introduction to Bookeeping Flashcards
Who are trade receivables
Customer that owes the business money
otherwise known as Debtors
Who is a credit customer
Customer with established terms with the business for credit purchases
What is remittance advise
notification from payer, that payment should be with the business shortly
Is the sales day book for credit or cash only
credit only
Define sales day book
Lists the (credit) sales invoices raised to our Trade Receivables.
Sales invoices are recorded here first before elsewhere
any sales book is to do with people that pay us/by our products (trade r
Define sales returns book
Lists the credit notes raised to our Trade Receivables
credit notes first recorded here before elsewhere
any sales book is to do with people that pay us/buy our products (trade
Who are trade payables
Suppliers that we have bought goods/ services from on credit
otherwise known as Creditors
How is the sales ledger different to the sales day book
Also known as the recievables ledger
The subsidiary ledger that contains all the individual Trade Receivable/Customer account
contains all credit sales to any customers
What is the purchase day book
Lists the credit purchase invoices from suppliers of the business
So when we buy something from someone else on credit, it goes in here
What is the purchase returns day book
Lists the credit notes issued to us from our suppliers of the business
credit notes we get from supplier when we want to return something
What is the discount allowed day book
Lists the credit notes raised to our Trade Receivables when they make a payment and take prompt payment discount
When customer get a credit note for a payment discount, goes in here
What is the general ledger
Trial balance
The main ledger where all the transactions of a business are recorded and from which the Trial Balance is extracted
Trail balance gives total CR and DR
How is the purchase ledger different to the purchase day book
Also known as payables ledger
The subsidiary ledger that contains all the individual Trade Payable/Supplier accounts
contains all credit purchases we do from any supppliers
What is a
1. statement of profit and loss
2. statement of financial position
Statement of profit or loss – details the sale and costs of the business for a period and would show the resulting profit or loss
Statement of financial position- details assets, liabilities and capital at any given time
What are the different types of account code you can have. What are the different books a customer/supplier code would be in
What are two systems for these codes (way of writing/ creating them)
nominal - codes for different accounts
customer - code for each customer (sales day book/sales return/discount allowed)
supplier- code for each supplier (in purchase day book/purchase returned/discount recieved)
product code - diff products have diff codes
can have alpha/ numeric
In the nominal ledger, how long are each account codes in Sage and Xero
Sage - 4 didgits
Xero - 3 didgits
What are the 4 main control accounts in the nominal ledger (these are 4 accounts that have special account codes)
- Trade debtors (SLCA/RLCA) contains details of customer transactions
- Trade creditors (PLCA) details of supplier transactions
The bank account
The VAT liability account
What is the nominal ledger in simple terms
ledgers are individual accounts within the ledger
Contains a number of accounts and uses double entry.
Each category of income, expense, asset, liability and capital will have a separate account in this ledger.
what is the chart of accounts
full list of nominal ledger account codes
What is the cash book
vs
What is the petty cash book
(lists transactions in/out of specific accounts)
Lists all payments and receipts into and out of the Bank A/c and Cash A/c of the business.
Lists and analyses all payments and receipts into and out of the Petty Cash A/c.
When there is a cash transaction for the buisness, under what two catagories is this recorded under in the cash daybook
either cash or bank transactions are recording in the cash book as a cash sale or cash purchase
What is a statement of account
(these are sent to customers)/ trade rec
details transactions that have taken place in that account over a month
What is remittance advise
recieved alongside payment from someone (a trade recievable)
a notification that the payment for an invoice will be recieved shortly
What is a part payment recipet
If a customer/ trade rec only covers some of what they owe, you have to allocate only part payment into the accouting software
what is an invoice
document details the sale of the goods or services sold
What is a goods received note
person recieving goods fills out this note to say what has actually been delivered
A purchase day book records invoices we have recived from a supplier
Bank – only the transactions that go in or out of the bank account/that show on bank statement should be included in the bank account within the ledgers
