Book Keeping Form 2

Indice

1. 1. Books of Prime Entry (1): Sales and Purchases Journals

   1 test 15 domande

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   • What are books of prime entry?
   • Trade discount and cash discount
   • The sales journal and its posting
   • The purchases journal and its posting
   • Summary

   Meaning Books of prime entry (books of original entry) are the books in which transactions are first recorded, from source documents, before they are posted to the ledger. They are not part of the double entry (except the cash book); they are lists that collect similar transactions together, so the ledger is not filled…

2. 2. Books of Prime Entry (2): Returns Journals

   1 test 16 domande

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   • Returns, credit notes and debit notes
   • The returns inwards journal
   • The returns outwards journal
   • Posting summary and the journal proper
   • Summary

   Returns journals Goods are sometimes returned because they are damaged, of the wrong type, of poor quality or delivered in excess. Returns are recorded in two special books of prime entry. Returns inwards journal (sales returns book) : goods returned to us by customers. Source document: a copy of the credit note we…

3. 3. Two Column Cash Book

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   • The cash book and its layout
   • Recording and balancing receipts and payments
   • Contra entries
   • Bank overdraft and posting the cash book
   • Summary

   Meaning The cash book records all receipts and payments of money. It is both a book of prime entry and a ledger account (it replaces the cash account and the bank account). A two column cash book has a cash column and a bank column on each side: receipts on the debit side, payments on the credit side. Contra entries A…

4. 4. Three Column Cash Book

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   • Cash discount
   • Layout of the three column cash book
   • Writing up and balancing a three column cash book
   • Posting discounts and their place in final accounts
   • Summary

   Meaning A three column cash book has a discount column, a cash column and a bank column on each side. The discount columns record cash discounts : allowances given for prompt payment of a debt. Discount allowed (debit side): given by us to customers who pay early. It is an expense. Discount received (credit side):…

5. 5. The Petty Cash Book

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   • Petty cash and the petty cash voucher
   • The imprest system
   • The analytical petty cash book
   • Posting the petty cash book and its advantages
   • Summary

   Meaning The petty cash book records small cash payments such as postage, bus fares, cleaning materials and tea. They are kept out of the main cash book to save the cashier's time. The person in charge is the petty cashier , and each payment must be supported by a petty cash voucher signed by the person receiving the…

6. 6. Bank Reconciliation Statement

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   • The bank statement and the cash book
   • Why the two balances differ
   • Updating the cash book
   • Preparing a bank reconciliation statement
   • Overdrafts and the importance of reconciliation
   • Summary

   Meaning A bank statement is a copy of the customer's account kept by the bank. A bank reconciliation statement (BRS) is a statement prepared to explain the difference between the bank balance in the cash book and the balance on the bank statement on the same date. Note: money in the bank is a debit in our cash book but…

7. 7. Government Accounting

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   • What is government accounting?
   • The budget, the Consolidated Fund and votes
   • Officers, documents and the payment process
   • The vote book and bases of accounting
   • Summary

   Meaning Government (public sector) accounting is the recording, classifying and reporting of the money received and spent by the government, its ministries, departments, agencies (MDAs), regional secretariats and local government authorities. Its main aim is not profit but accountability : showing Parliament and…