Principle Of Bookkeeping Controls Flashcards
CHAPs
Clearing house automated payment system
Used for high value payments made by electronic payments
Cant be cancelled after sent
No min or max payment limit
Cheque
Instruction in writing signed by payer telling bank to pay a named person
When receiving can be paid into bank or paid in electronically through mobile banking
Checked to make sure all details correct or it could be invalid
Bank drafts
Written out by bank and purchaser pays bank plus a charge from purchasers bank account
No min or max
Cash
Used for cash wages and for petty cash system
Debit cards
Payment taken from bank account of customer immeditaly
Credit cards
Monthly payment made in full or in part by customer
Interest charged on balance owing to credit card company
Credit limits
Error of omission
Payment completly omitted from ledgers
e.g. £10 not recorded
Error of original entry
Entry made and debit and credit correct but not the amount
e.g.£520 from credit customer recorded as £250
Error of commission
Double entry amount correct but wrong account used
e.g. wages and salaries expense incorrectly debited with rent expense of £100
Error of principle
Wrong type of account used
e.g. MV petrol expense £40 debited to non current account
Reversal of entries
Debit and credit entries on wrong side
e.g. Sale £160 included on wrong side
Compensating error
2 errors made that cancel each other out
Errors are unrelated but the fact that both occured means no imbalance on trial balance
Calculation error
Mistake made when calculating balance on ledger account
Balance transfer error
Balance on general ledger transferred wrong to trial balance
Unwqual amount error
1 side of double entry is made but error made on other side
Two debits/Two credits
Both accounts posted with debit entries or credit entries
Single entry transaction
1 side of double entry been made
Transposition error
Digits in number swaooed around
Payment to employees
Gross pay
-Tax
-Employee NI
-Employee pension
-Trade union
HMRC
Tax
+Employer NI
+Employee NI
Wages expense
Payment to employee
+HMRC
+Pension
+Volunntary
VAT Control Account
Debit:
Purchases
Sales returns
Discounts allowed
Cash purchases
Other cash expenses
Bal C/D
Credit:
Sales
Purchase returns
Discounts received
Cash sales
Other cash income
Bal B/D
PLCA
Debit:
Payment made to suppliers
Discount received
Purchase returns
Set off/Contra
Bal C/D
Credit:
Bal B/D
Credit purchases
RLCA
Debit:
Bal B/D
Credit sales
Returned cheques
Credit:
Payments receieved from customers
Discounts allowed
Sales returns
Irrecoverable debts written off
Set off/Contra
Bal C/D
