Preparing Financial Statements- Other considerations Flashcards
Double entry for sales returns (goods returned to business)
For a credit transaction:
- Dr Sales
- Cr Trade receivables
For a cash transaction:
- Dr Sales
- Cr Cash
Double entry for purchase returns (goods returned from business to supplier)
For a credit transaction:
-Dr Trade receivables
-Cr Purchases
For a cash transaction:
-Dr Cash
-Cr Purchases
When purchasing goods on credit there’s two separate entries
On purchase:
- DR purchases
- CR payables
On settlement:
- DR payables
- CR cash
The double entry to record an invoice raised to a credit customer..
- DR receivables
- CR revenue
Double entry for £30,000 of goods purchases on credit and there is a 5% discount for early payment which they are expecting to use, but they end up paying after the early payment deadline
On purchase:
- DR purchases £28,500
- CR payables £28,500
On settlement:
- DR payables £28,500
- CR cash £30,000
- DR purchases £1,500
Double entry for £30,000 of goods purchases on credit and there is a 5% discount early payment which they aren’t expecting to use, but they end up paying before the early payment deadline
On purchase:
- DR purchases £30,000
- CR payables £30,000
On settlement:
- DR payables £30,000
- CR purchases £1,500
- CR cash £28,500
what is employer pay made from?
gross salary and employer’s national insurance
what is ‘gross salary’ made from
net salary + income tax (PAYE) + employees national insurance
what is paid to the government as tax (HMRC liabilities)?
- Income tax (PAYE)
- Employee’s national insurance
- Employer’s national insurance
What is total staff costs?
gross salary + employers NICs
what is the double entry for payroll
DR wages and salaries (gross salary + employers NIC)
CR cash (net salary)
CR income tax ( PAYE + employer + employee NIC)
true or false
income tax is a current liability
true
