Recording sales and sales returns Flashcards
what is single entry?
keeping records through receipts and payments, usually by small businesses
list one advantage and disadvantage on single entry?
adv: by keeping records from payments and receipts show a company’s net income
disadv: but isn’t so useful for keeping track of the financial position of a business
does not show assets or liabilities, or what is owned or owed
what is the double entry system?
recording transactions in a more sophisticated manner, this way each entry has a ‘double effect’ meaning each transaction is recorded twice
recording a sale, cash increases but inventory decreases
which accounts make up the integrated ledger? (4)
sales, purchases, and each type of expense transaction as well as an account for each credit customer
one ledger becomes unmanageable for businesses, how many ledgers are there and what are they? (4)
receivables
payables
cash book
general
what is the receivables ledger?
recording all transactions with credit customer, shows what you are owed by who
what is the receivables ledger also known as?
sales or debtors’ ledger
which purchase transactions does the receivables ledger not record?
cash sales only credit sales
what is the payables ledger?
records all the transaction between you and your credit supplier/s
what is the payables ledger also known as?
purchase’s/ creditors ledger
which purchase transactions does the payables ledger not record?
cash purchases
what is the cash book?
where all cash AND bank purchases are recorded despite being called a cash book
what is a general ledger?
where all other expenses are recorded, like expenses, loans, money put into the business and money taken out, any equipment you have bought for the bsuiness
what is the general ledger also known as?
main/ nominal ledger
what does a sale?
a sale of goods or services the business trades in