Module 1 Flashcards
What is an Expense?
DR or CR?
DR
A discount given by the seller to encourage the buyer to purchase large amounts?
Bulk
What is a Credit payment?
The person buying the goods or services is given a period of time to pay.
(They are called a Trade Receivable).
What is the Accounting Equation?
Assets - Liabilities = Capital
A discount offered on the invoice if payment is made within a specified timescale?
Prompt Payment Discount
What is a Liability?
DR or CR?
CR
How do you work out the VAT amount from the Gross?
Gross Amount / 1.2 * 0.2
What is an Asset?
DR or CR?
DR
A discount given by the seller to certain ‘good or regular’ customers to encourage them to keep buying from you?
Trade
You always round Vat…?
Down
What is a Cash Transaction?
An immediate payment for goods or services they are purchasing. (Payment can still be by cheque or card).
The Sales Day Book is a Book of Prime Entry.
True.
The Sales Returns Day Book is a Ledger.
False.
What goes in the Sales Day Book?
All the invoices we raise for our credit sales customers (Trade Receivables).
What goes in the Sales Returns Day Book?
All the credit notes we raise for our credit customers (Trade Receivables).
What goes in our Purchase Day Book?
All the invoices we receive from our suppliers for our credit purchases (Trade Payables).
What goes in our Purchase Returns Day Book?
All the credit notes we receive from our credit suppliers (Trade Payables).
What goes in our Discounts Allowed Day Book?
The credit notes we WOULD issue after we’ve received a payment from a Trade Receivable which includes a PPD.
What goes in our Discounts Received Day Book?
The credit notes we would receive after we have made a payment which includes a PPD.
What does a Statement of Profit or Loss summarise?
The Total Revenue (Income) and expenses (outgoings) and deducts one from the other to show the resulting profit or loss.
What does a Statement of Financial Position summarise?
In effect a list of the assets and liabilities of a business at a specific date - often referred to as a balance sheet.
What is Capital?
The amount the owner has invested in the business and is therefore a special type of liability. The business owes the owner this money.
Capital Expenditure …
Money spent on purchasing or improving non-current assets.
Revenue Expenditure…
Money spent in the day to day running if the business.
