Source Documents
name two source documents that are linked to the cash book
receipts
bank vouchers, bank slips, cheques, cheque counterfoil.
this book of original entry is used to record credit sales
sales journal
what is the purpose of the trial balance
check the arithmetical accuracy of the double entry
what is an income statement?
a statement showing the earnings of a business less expenses.
what is a balance sheet?
list of all assets, liabilities and capital of a business
Mary sold some goods, she recorded this in which source document?
Sales Invoice
the totals from the purchases journal are transferred to the
purchases account in the general ledger
give one reason why a trial balance pay balance yet it is incorrect
the same error was made on both sides of the trial balance.
How is the net profit calculated?
total income - total expenses.
When listing the assets in the balance sheet name order that is used
order of permanence and order of liquidity
Information for the petty cash book is obtained from?
petty cash voucher
this book is used both as a book of prime entry and a ledger.
cash book
On which side of the trial balance would you find discount allowed
debit side
In the income statement, what is added to the gross profit as an added income?
Revenues, eg- discount received, rent received, commission, received, interest received etc.
The financed by section consist of?
Capital+ net profit - drawings
Give four important information that can be found on an invoice
date, address of supplier& customer
invoice number, quantity, description, amount, unit price.
when the double entry of a transaction is completed in the same book, it is called
a contra entry
when recording the balances from the ledger, what's the steps you would take to record them in the trial balance?
obtain the balance brought down
record the balance brought down in the trial balance on the same side in which it appears in the ledgers.
at the end total both sides
In the income statement what is treatment of prepayments and accruals?
prepayments are subtracted
accruals are added
how are prepayments and accrual treated in the balance sheet
prepayments is a current assets
Accruals are current liabilities
When goods are returned to suppliers, the business returning the goods will prepare
debit note
purchased goods on credit from S. Scott. name the ledgers in which this account an be found
purchases ledger
general ledger
name the types of accounts that are found on the credit side of the trial balance
capital, revenue, sales, purchases return, liabilities
How would you calculate the Cost of Goods Sold?
Opening inventory+purchases+ carriage inwards-purchases return-closing inventory
How would you calculate the working capital?
total current assets- total current liabilities