Mrs Snow

Question 1

Invoice

Answer 1

Invoices are receipts sent from the suppliers to customer. They include details of goods bought, date of purchase and the costs.

Question 2

Credit purchase

Answer 2

A financial position that allows individuals/business to buy good/services at a later date

Question 3

What is credit

Answer 3

The ability of a consumer to acquire goods or services prior to payment in hopes of payment in the future

Question 4

What is a sales returns journal

Answer 4

An accounting system that’s used to record transactions of products returned to the business from the customer
In a source document, it would be “Credit note to”

Question 5

What is the purchase returns journal

Answer 5

An accounting system that records returns goods (that were purchased on credit) from the business to the suppliers only

Question 6

What is the sales journal

Answer 6

An accounting journal used to record all sales of goods or services made on credit
In a source document, it would be “invoice to” because you’re selling from the business to someone else

Question 7

What is the purchases journal

Answer 7

A financial record used to keep track of orders for credit purchases of goods
In a source document, it would be “invoice from” because the business is buying of someone else

Question 8

What is a credit note

Answer 8

Shows goods that have been returned. They no longer need to be paid for

Question 9

What is a receivables ledger

Answer 9

A detailed record that’s used to track amounts owed to the business by its customers
Shows invoices, credit notes, payments and the amount of money owed

Question 10

What is the payable ledger

Answer 10

The payables ledger is an accounting record that tracks amounts a business owes to its suppliers/creditors

Question 11

What are the 5 books of prime entry

Answer 11

Sales Journal
Sales Returns Journal
Purchase journal
Purchase returns journal
Cash book