Recording Basic transactions and balancing the ledgers Flashcards
What are cash transactions?
They are those where payment is made or received immediately.
What does cash transactions include
Cash transactions include purchases made by cheque but no credit purchases that are paid at a later date
What are credit transactions?
Credit transactions are where goods are sold and purchased and paid for at a later date.
How are credit transactions made usually?
Through electronic payment (online) mostly
Also referred to as bank transactions.
What does banked mean in accounting?
When cash is banked the double entry is: Dr Bank/Cash at bank. Cr Cash (in hand) So “cash sales of 50,000 was banked” means 50,000 received from cash sales was paid into the bank.
Money that a business is owed is accounted for in the receivables ledger.
Money that a business owes is accounted for in the payables ledger.
Test your Understanding 2 for computer purchased for a business what account did they use? (mistakes)
Non-current asset a computer is a long term investment of sorts.
Test your understanding 3 for interest received account from bank what account comes in ledger? (mistakes)
Interest Income account.
Write balance b/f or b/d for which part?
Diagonally (you get it right if it has to go diagonal that mens from lesser side to morer side.
Account receivables is an asset
Account payables is an liability
