Notes on Books of Prime Entry and Related Concepts (VFlashcards)

A comprehensive set of vocabulary flashcards covering key terms and concepts from the lecture notes on books of prime entry, ledgers, source documents, discount treatment, and vouchers.

Books of Prime Entry

The initial books where everyday transactions are recorded in date order before they are posted to ledger accounts.

Sales Day Book

A book that records all credit sales to customers.

Purchases Day Book

A book that records all credit purchases from suppliers.

Sales Return Day Book

A book that records goods returned by customers on credit.

Purchases Return Day Book

A book that records goods returned to suppliers.

General Journal

A book used to record transactions not captured by the other books of prime entry, including adjustments and corrections.

Cash Book

A book recording all cash receipts and payments; can be single-column, two-column, or three-column.

Bank (A)

A ledger account representing cash held in the bank.

Office Building (A)

A fixed asset representing the cost of the office building.

Acc. Payable for Building (L)

A liability account representing amounts payable for the office building.

Purchases

An account recording purchases of goods for resale or for use in production.

Sales

An account recording revenue from goods or services sold.

Debtor

A person or entity who owes money to the business (customer).

Creditor

A person or entity to whom the business owes money (supplier).

Capital

Owner’s investment in the business.

Drawings

Owner’s withdrawals from the business for personal use.

Acc. Receivable

Accounts receivable; amounts owed by customers.

Acc. Payable

Accounts payable; amounts owed to suppliers.

Debtor (A)

An individual debtor’s ledger entry showing amounts owed by a customer.

Creditor (L)

A creditors ledger entry showing amounts due to a supplier.

Balance c/d

Balance carried down to the next accounting period.

Balance b/d

Balance brought down from the previous period.

Trial Balance

A list of all ledger balances to check that total debits equal total credits.

Debit (Dr.)

The left-hand side of an account; increases assets/expenses or decreases liabilities/revenue.

Credit (Cr.)

The right-hand side of an account; increases liabilities/revenue or decreases assets/expenses.

Posting

Transferring entries from books of prime entry to the ledger accounts.

Debit Balance

A balance on the debit side of an account (typical for assets/expenses).

Credit Balance

A balance on the credit side of an account (typical for liabilities/revenue).

Accounts Payable (A/P)

Liabilities representing amounts owed to suppliers.

Accounts Receivable (A/R)

Amounts owed by customers; asset representing sales on credit.

GRN (Goods Received Note)

A document confirming that goods have been received and checked against the order.

Delivery Note

A document accompanying the goods that confirms delivery and can be checked against the order.

Goods Dispatched Note

A document indicating that goods have been sent to a customer.

Sales Invoice

A document sent to a customer requesting payment for goods sold on credit.

Purchase Invoice

A document received from a supplier requesting payment for goods purchased.

Credit Note

A document issued by a seller to a buyer reducing the amount owed, typically due to returns or allowances.

Debit Note

A document issued by a buyer to a supplier requesting an adjustment to the amount payable.

Credit Note Issued

The action of issuing a credit note to a customer.

Debit Note Issued

The action of issuing a debit note to a customer or supplier.

Credit Note Received

A credit note received from a supplier reducing payables.

Debit Note Received

A debit note received from a supplier indicating an adjustment.

Source Document

Original document supporting a transaction (invoices, receipts, cheques, etc.).

Quotation

A proposal of prices and terms offered to a customer before a sale.

Sales Order

A customer's order confirming requested goods/services.

Purchase Requisition

Internal request within a business to purchase goods.

Purchase Order

A document issued to a supplier to place an order.

GRN (Goods Received Note) vs Delivery Note

GRN verifies goods received against order; Delivery Note accompanies goods in transit.

Purchase Return

Returning goods to a supplier; recorded as a decrease in purchases and liability.

Sales Return

Returning goods by a customer; recorded as a decrease in revenue and asset adjustments.

Credit/Debit Voucher

Internal documents used to authorize payments (credit) or adjustments (debit).

Voucher System

A system replacing or supporting books of prime entry by using vouchers to authorize and record transactions.

Receipt Voucher

A voucher used to record cash or cheque receipts.

Payment Voucher

A voucher used to record cash or cheque payments.

Journal Voucher

A voucher used to record non-cash transactions and year-end adjustments.

Three Column Cash Book

A cash book with separate cash, bank, and discount columns.

Two Column Cash Book

A cash book with cash and bank columns on each side.

Single Column Cash Book

A cash book with a single amount column.

Petty Cash

A small cash fund maintained for small, routine expenses.

Imprest System

A fixed float of petty cash that is replenished to the original amount.

Stock/Inventory Discount Terms

Involves trade discounts and cash/settlement discounts as part of pricing.

Net Value

Price after all discounts, trade and cash where applicable.

Gross Value

Price before any discounts.

Trade Discount

A reduction from list price granted by the supplier at the point of sale.

Cash Discount

Discount for early payment; affected by payment timing rather than the price per se.

Settlement Discount

Discount offered for early settlement of a debt.

Prompt Payment Discount

Discount provided for paying promptly, typically within a set period.

Trade Discount Not Recorded

In accounting, trade discounts are not separately recorded; revenue/purchases are recorded net of trade discounts.

Discount Allowed

Discount given to customers for early payment; reduces revenue.

Discount Received

Discount gained by the purchaser for paying early; reduces cost of purchases.

Net Price vs List Price

List price is the advertised price; net price is after discounts.

Credit Note vs Debit Note (Recall)

Credit notes reduce receivables; debit notes request adjustments in payables.

Receipts Ledger

A subsidiary ledger recording receipts from customers.

Payments Ledger

A subsidiary ledger recording payments to suppliers.

Demand Note

A note used to demand payment (not commonly used in standard books of prime entry).