Principles of accounts

0.0(0)
learnLearn
examPractice Test
spaced repetitionSpaced Repetition
heart puzzleMatch
flashcardsFlashcards
Card Sorting

1/34

Study Analytics
Name
Mastery
Learn
Test
Matching
Spaced

No study sessions yet.

35 Terms

1
New cards

Accounting Cycle

  1. Source documents

  2. Journals

  3. Double Entry

  4. Trial Balance

  5. Income Statement

  6. Balance Sheet

2
New cards

What is another name for Journals?

Books of original entry

3
New cards

What is another name for double entry?

Ledger

4
New cards

What is another name for Income statement?

Trading profit & loss account

5
New cards

What is another name for Balance sheet?

Statement of financial position

6
New cards

Source documents - #1

Sales and purchases Invoice

7
New cards

Source documents - #2

Debit and credit notes

8
New cards

Source documents - #3

Petty Cash vouchers

9
New cards

Source documents - #4

Bank paying in slips, cheques and cheque counterfoils

10
New cards

Source documents - #5

Receipts and Bankers’ Automated Clearing Services (BACS) receipts

11
New cards

Source documents #6

Correspondence

12
New cards

What is Petty Cash?

Petty cash is a small amount of money that businesses keep/do not deposit so that they don’t have to keep going to the bank to draw money every time they are in need of it

13
New cards

Books of Original entry - #1

Sales and Purchases Journals and general journals

14
New cards

Books of Original entry - #2

Returns Inwards and Outwards

15
New cards

Books of Original entry - #3

Cash book and Petty Cash book

16
New cards

Another name for purchases journals and sales journals?

  1. Sales day book

  2. Purchases day book

17
New cards

When assets increase you _____ and when assets decrease you ______

  1. Debit

  2. Credit

18
New cards

When liabilities increase you ______ and when liabilities decrease you _____

  1. credit

  2. debit

19
New cards

When expenses increase you _____ and when expense decrease you ______

  1. Debit

  2. Credit

20
New cards

When capital increase you ______ and when capital decrease you _____

  1. Credit

  2. Debit

21
New cards

When revenue increase you ______ and when revenue decrease you _____

  1. Credit

  2. Debit

22
New cards

Sales accounts are always

Credited

23
New cards

Purchases accounts are always

Debited

24
New cards

What is book keeping?

Bookkeeping is the systematic recording of the daily transactions of a business in terms of money. It is the first stage in the accounting cycle.

25
New cards

What does bookkeeping involve?

Bookkeeping involves record keeping – i.e. records are kept for sales, purchases, revenue expenses and all others business transactions.

26
New cards

What us accounting?

Accounting is the process by which certain methods and procedures are used to prepare, classify, analyse and summarize the financial records of a business.

27
New cards

What does accounting involve?

Accounting involes using information compiled in the bookkeeping process so that financial statements can be prepared, analysed and interpreted.

28
New cards

What are financial statements?

Financial statements are formal records of the financial activities and position of a business. Relevant financial information is presented in a structured manner and in a form which is easy to understand.

29
New cards

Types of financial statements- #1

Income statement – The purpose of an income statement is to show a company's financial performance over a period. It tells the financial story of a business's activities. Within an income statement, you'll find all revenue and expense accounts for a set period.

30
New cards

Types of financial statements - #2

â–ş Statement of financial position - The statement lists the assets, liabilities, and equity of an organization as of the report date. It shows what the business owes and owns.

31
New cards

Internal users

  1. Owners

  2. Managers

  3. Employees

32
New cards

External users

  1. Potential Investors

  2. Government/Tax authorities

  3. Banks and other financial institutions

  4. Customers (debtors)

  5. Suppliers (creditors)

33
New cards

What is capital?

Capital is the total amount of resources supplied (or invested in) a business by its owners.

34
New cards

Who is a debtor

(also known as accounts receivable) a person who owes money to the business for goods previously sold to them on credit

35
New cards

Who is a creditor