BOOKS OF PRIME ENTRY and DOCUMENTATION

FLASHCARDS

Source Documents: The original written records containing the details of a financial transaction before it is entered into the accounts (e.g., invoices, receipts, petty cash vouchers).

Invoice: A document issued by a seller to a buyer showing details, quantities, and total prices of goods or services provided on credit.

Credit Note: A document issued by a supplier to a customer acknowledging a reduction in the amount owed (e.g., due to returned or damaged goods).

Debit Note: A document sent by a customer to a supplier requesting a credit note for returned or faulty goods.

Statement of Account: A summary sent periodically by a supplier to a credit customer showing all transactions during the period and the closing balance due.

Books of Prime Entry: The initial books in which transactions are recorded in chronological order before being posted to ledger accounts (e.g., Sales Journal, Purchases Journal, Cash Book, General Journal).

Trade Discount: A percentage reduction off the list price of goods, given to business trade customers or for bulk purchases. Note: Trade discount is deducted on the invoice and is not recorded in ledger accounts.

Cash Discount: A discount offered to credit customers to encourage prompt payment within an agreed time frame (split into Discount Allowed to customers and Discount Received from suppliers).