Accounting Topic 5 - Source Documents, books of prime entry, division of the ledger

What is the role of the book keeper?

Responsible for recording the day to day transactions, maintaining accounting records, entering transactions in the day books and ledger accounts, checking the accuracy of the book keeping. For example, recording data from the source documents.

They may assist in preparation of the final accounts by preparing a trial balance

What is the role of the accountant?

Preparing the financial statements and making sure that accounting concepts are applied to the preparation and that the financial statements show a true and fair view of the business.

What is an invoice received and an invoice issued?

An invoice issued is when a business has sold on credit. Will receive payment later

An invoice received is when a business has bought on credit. Will pay later.

What is a credit note issued and received?

A credit note issued is the return of a credit sale

A credit note received is the return of a credit purchase

What is a cheque counterfoil?

When you pay for anything by cheque

What is a paying in slip counterfoil?

Paying cash or cheques into a bank account

What is a cash receipt?

When you buy anything immediately

What is a till roll?

When you sell goods and receive payment immediately

What are included in bank statements as source documents?

Standing orders, Direct debits, BACS, credit transfers and bank charges

What is included in the sales journal?

All credit sales, trade receivables, invoices issued

What is included in the purchases journal?

All credit purchases, trade payables, invoices received - only purchases ones

What is included in the sales returns journal?

All returns of credit sales, links to trade receivables, credit note issued

What is included in the purchase returns journal?

All returns of credit purchases, links to trade payables and credit notes received

What is included in the cash book?

All cash and bank transactions, links to the bank statement, can link to other source documents

What is included in the general journal?

All “non regular transactions”. Everything else left

Links to invoices received, includes the purchase of non current assets on credit.