Recording Financial Transactions Flashcards
Advantages of computerised accounting systems?
Speed of processing large volumes of transactions
Controls to reduce input errors
Data in easily accessible format
More time for accountants to give advice and analysis
Elements of computerised systems?
Inputs - source documents and standing data
Processes - ledgers, journals, calculations, record keeping
Outputs - reports, trial balance, financial statements
What is standing data?
reference data that does not change regularly
What are account codes?
unique codes to accurately record transactions
What is processing?
Real time recording of transactions
What are controls?
mathematical and authorisation controls to ensure accuracy of information
Source document process for credit sale
Customer order, dispatch goods - delivery note to sign, raise invoice - this is source document, receive payment
Source document process for credit purchase
Purchase order, receive goods - goods received note, receive invoice - source document, make payment
What is a credit note?
documents to customers relating to returned goods or refunds - a negative invoice
Recording bank transactions with computer systems
Systems download a transaction report.
Can struggle to match transactions - put in exception report
What are some examples of transactions banking systems may not recognise?
Unusual/ one-off transactions
Disposal of NCA
Additional capital invested
Settlement discounts
What system does petty cash use and how does it work?
Imprest system - money taken is replaced with a voucher and the pot is topped back up by that amount
Wages expense =
Gross pay + employer’s pension and NIC
Net pay =
Gross pay - employee’s pension, PAYE and NIC
