Recording Financial Transactions Flashcards
What is a Source Document and what are they used for?
When a business transaction takes place it is usually recorded on a source document.
They are used to prepare the financial records.
What is an Invoice and what are they types of Invoices?
Invoices are used to record transactions on credit.
Sales and Purchases invoice.
What is a Credit Note?
A document issued to a customer relating to returned goods or a refund.
What is VAT?
Value Added Tax. Added to a sales invoice.
What is a Bank Transactions Report?
Details all receipts or withdrawals in and out of a businesses bank account.
What is a Goods Delivered Note?
A note prepared by the seller when goods or services are delivered to a customer in aspect of a sale.
What is a Goods Received Note?
A note that records a receipt of goods purchased, most commonly found in a warehouse.
What is a Debit Note?
Used to request a credit note from a supplier.
What is a suspense account?
An account used to record any amount that is not recognised on the transaction report.
What is the Petty Cash Book?
It records the movement of physical cash in and out of the petty cash tin.
What is the system called that controls petty cash?
The Imprest System.
What are the 5 stages of the Imprest System?
1) Preset limit.
2) A voucher is filled in when money is taken out to pay for expenses.
3) At any time vouchers + cash must equal the preset limit.
4) At the end of the week/month the petty cash book is filled in from the vouchers.
5) The amount needed to bring the balance back up to the preset limit equals cash spent.
What is Payroll?
The record of wages and salary costs.
What is included in Gross Pay for Payroll?
PAYE Tax, Employees National Insurance Contribution, Employees Pension Contribution and Net Pay.
What is included in Additional Costs for Payroll?
Employers National Insurance Contribution and Employers Pension Contribution.
