Overview
The first step in the accounting cycle
What is analyzed source document?
How many books of Original Entries are there?
There are seven books
What is the difference between cash and credit transactions?
cash transaction payment is made at the time the transaction took place.
credit transaction no payment is made at the time the transaction took place.
What is a cash discount?
this is given to customers when payment is made.
What are trade discounts?
This is used to encourage trade and is given on the catalog price.
List all seven books of original entry.
general journal, purchases day book, sales day book, cash book, petty cash book, return inwards journal, and return outwards.
Which source document is used to complete the sales journal
sales invoice
Which source document is used to complete the Return outwards day book?
Debit Note
Which source document is used to complete the Purchases day book?
The purchases invoice
Which source document is used to complete the Return inwards day book?
Credit Note
sales made on credit taken from the sales invoice.
What type of transaction is recorded in the Purchases journal?
transactions purchased on credit taken from the purchases invoice.
Define books of original entry
This is where all business transactions are recorded in the accounting books or journals
what are two advantages of technology in accounting?
speed and accuracy
Outline all the steps in the accounting cycle.
analyze source documents, journalize, ledgers, trial balance, corrections and adjustments, and financial statements
What is the difference between a debit and a credit note?
The debit note is sent by the customer for goods returned and the credit note is sent by the business for acknowledgment of the invoice sent.
What types of transactions are recorded in the General Journal?
What are the four main types of source documents that records credit transactions?
Sales and purchases invoice
Debit and Credit note
What types of transactions are recorded in the return inwards journal?
transactions of goods returned by customers to the business.
What types of transactions are recorded in the return outwards journal?
transactions of goods returned to the suppliers by the business.
What type of transactions are recorded in the Cash Book?
Cash and cheque
What is the difference between a debit card and a credit card?
A debit card is used to withdraw from your personal bank account, whereas, a credit card is used to withdraw from a loan offered by the bank.
Which book of original would cash discounts be recorded in?
the cash book
The petty cash book is used for?
Recording small cash transactions, to avoid overcrowding the cash book.
What are the two types of cash discounts?