L2 (Thu) Source docs and format of GJ Flashcards
What is the importance of source documents in accounting?
Source documents provide the necessary information to record transactions accurately.
What are the key elements that should be included in a source document?
- Name and address of business
- Type of source document
- Number of source document
- Date of the transaction
- Items, quantity of items and amount per item sold
- Total amount due
- VAT details (if applicable)
What does VAT stand for?
Value Added Tax
What is a debit note used for?
A debit note is used when a person requests a discount or credit on returned goods.
True or False: A credit note is issued after a debit note is requested.
True
What is the General Journal (GJ) in accounting?
The GJ is the first point of entry of a transaction in the accounting records of an entity.
List some types of journals that were historically used by entities.
- CRJ (Cash Receipts Journal)
- CPJ (Cash Payments Journal)
- DJ (Debtors Journal)
- DAJ (Debtors Allowances Journal)
- CJ (Creditors Journal)
- CAJ (Creditors Allowances Journal)
- GJ (General Journal)
How do computerized bookkeeping systems like SAGE Pastel and Quickbooks relate to the General Journal?
Computerized systems are based on the GJ and made various types of journals redundant.
Fill in the blank: The General Journal is essential for generating __________ from recorded transactions.
reports
What information does a basic General Journal entry include?
- Doc no.
- Date
- Details
- Debit
- Credit
In a General Journal entry, what would be recorded if a laptop was purchased on credit for R16 000?
- Equipment: Debit R16 000
- Creditors control / SMT Systems: Credit R16 000
What is the role of source documents in relation to the General Journal?
Source documents are needed to record transactions in the GJ.
What is the format of a General Journal entry when purchasing an item on credit?
The format includes document number, date, details, debit amount, and credit amount.
What does a cash receipt serve as in accounting?
A cash receipt serves as proof of payment received.
What type of source document is retained by the customer in cash payments?
Cash invoice received (original)
True or False: Customers keep duplicates of credit invoices issued.
False
What is the difference between credit purchases and credit sales?
Credit purchases involve receiving goods on credit, while credit sales involve selling goods on credit.
What type of document is issued for sales returns?
Credit note issued (duplicate)
What document is used as proof of an Electronic Fund Transfer (EFT)?
Proof of EFT
What is captured from the General Journal to create various accounts?
Transactions recorded in the GJ
What is the purpose of journal narrations in the General Journal?
Journal narrations provide explanations for transactions recorded.
