Académique Documents
Professionnel Documents
Culture Documents
Course slides
For computer-based and paper-based exams
Syllabus
1 2 Business transactions and documentation Double entry bookkeeping
3
4
5
6
7
Slide 2
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Chapter 1
Sales SALES
CREDIT SALES
Purchases PURCHASES
Goods delivered Goods paid before payment for immediately made CASH PURCHASES CREDIT PURCHASES
Slide 7
Invoice
G O GET EM AT GOTHAM!!
W.E. GOTHAM USED CARS
Old Iron Gate Street, Wraillings Industrial Estate, Melchett
2,500.00
2,500.00
To:
Reg Office: Old Iron Gate Street, Wraillings Industrial Estate, Melchett Reg No: 82912 VAT Reg No: 5 439832
Slide 8
Discounts
Trade discounts Given at time of sale/ purchase Bulk buying
Settlement discounts Offered as incentive for early payment For example 5% if settled within 14 days May or may not be taken
Slide 9
INPUT TAX
Sales tax is calculated on the amount after all discounts regardless of whether the discount is taken or not
Slide 11
Contract law
What is a contract?
Legally binding agreement (offer and acceptance) Consideration
Breach of contract
Slide 12
Implied terms
Goods must
Exist Match description Be of satisfactory quality
Slide 13
Storage of information
Information stored must be:
Accessible Secure What information may be needed by a business? Who may be entitled to information from a business?
Slide 14
Retention periods
If you think you may need it, keep it
Legal limits for different records
Simple contracts 6 years Income and sales tax) records 6 years Purchase orders, sales invoices 6 years Bank statements 6 years Cheque counterfoils 1 year
Slide 15
Data protection
To protect individuals (data subjects)
Data subjects have rights
Gain access to personal data held Know why data is held and who has access Have inaccurate data corrected or deleted Seek compensation
Slide 16
Chapter 2
Profit
Income
Expenses
Slide 18
Assets
$
ASSETS Non-current assets Land and buildings Plant and machinery Motor vehicles Fixtures and fittings
90,000 290,000
Liabilities
$ Non-current liabilities Bank loans Current liabilities Bank overdraft Trade payables Accruals Total liabilities 16,000 40,000 4,000 60,000 100,000 $ $
40,000
Slide 20
Slide 21
CAPITAL
ASSETS
- LIABILITIES
CAPITAL
Investment
+ Profit
Drawings
Slide 22
Accounts receivable
SALE to customer creates ACCOUNT RECEIVABLE (customer owes $)
ASSET of the business CASH RECEIPT settles
Slide 23
Accounts payable
PURCHASE from supplier creates ACCOUNT PAYABLE (we owe $)
LIABILITY of the business CASH PAYMENT settles
Slide 24
General rules
D ebits E xpenses
C redits L iabilities
A ssets
D rawings
Slide 25
I ncome
C apital invested
Chapter 3
31.12.X6
31.12.X7
Non-current Assets
Land and buildings
Plant and machinery
Slide 28
Current Assets
Inventory Receivables
Prepayments
Bank and Cash
Slide 29
Current Liabilities
Bank overdraft
Trade payables
Accruals
Slide 30
Non-current Liabilities
Bank loans
Slide 31
Capital
Share capital
Reserves
Slide 32
Income Statement
Income
Expenses
Slide 33
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Chapter 4
Source documents
Invoice
Delivery note Supplier account Customer account
Source document
Remittance advice
Slide 37
credit purchases
movements in bank account physical cash movements other information e.g. period end adjustments correction of errors large/unusual transactions
Slide 38
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4.1.X7
16.1.X7
350
200 950
Slide 40
Cash Book
Records receipts and payments into and out of the bank
Often assumed to be two books
Slide 41
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Date
Narrative
Total $
Purchases $
Van $
Rent $
Payables $ 350
Petty Cash $
Drawings $
6.1.X7
350
6.1.X7
8.1.X7
Petty Cash
Digby Co
50
1,000 1,000
50
1,400
1,000
350
50
Slide 43
General Ledger
Example
Advertising account
Date Details Ref $ Date Details Ref $
Slide 44
Ledger Accounts
Dr $ DEBIT
TOTAL DEBITS
Slide 45
Cr $ CREDIT
= TOTAL CREDITS
Dr Cash
Cr Sales
Slide 46
Dr Purchases
Cr Cash
Slide 47
Dr Accounts receivable
Cr Sales
When goods are sold
Dr Cash
Cr Accounts receivable
When cash is received
Slide 48
Dr Purchases
Cr Accounts payable
When goods are purchased
Dr Accounts payable
Cr Cash
When cash is paid
Slide 49
Memorandum Ledgers
Can you identify how much J. Spalding owes you from the following invoices?
Slide 50
Memorandum Ledgers
Receivables ledger
Slide 51
Control Accounts
Receivables and payables recorded in two places
1. Sales and purchase ledgers giving information on individual customers and suppliers 2. The general ledger Receivables account or Sales Ledger Control Account Payables account or Purchase Ledger Control Account giving information on receivables and payables in total.
Slide 52
Dr Accounts receivable
Cr Sales
Slide 53
Dr Purchases
Cr Accounts payable
Slide 54
Dr Purchases
Cr Accounts payable
Slide 55
Chapter 5
Journal
Correction of errors
Slide 57
$
DEBIT Accountancy fees 10,000
$ 10,000
Slide 58
3
4
Slide 59
Debits = Credits
Slide 60
Debit
$ 720
Credit
$
500 2,200
1,100 500 120 60 200
2,700
2,700
Suspense accounts
Slide 62
Slide 63
Computer terms
Input Entering data from original documents Sorting data Producing data in useful form
Processing
Output
Slide 64
Accounting packages
General software
Slide 65
Accounting modules
A program which deals with one part of a business accounting system
Slide 66
Chapter 6
Remittance advice
Slide 68
2
3 4 5
Slide 69
Till receipts
Slide 70
Cheque
Bankers draft
Slide 71
Protective glass
Strong box Cash register Night safes Banking
Slide 72
Slide 73
Receipt of cheques
1 Examine cheques to ensure details correct
2
3 4 5
Slide 74
Plastic cards
Slide 75
Rub thumb over signature panel to check not raised Compare signatures on card and vouchers Check warning lists of stolen cards Check card date is still valid Check transaction does not exceed business floor limit
EFTPOS
Slide 77
Chapter 7
Banker-customer relationship
Comply with customers instructions
Honour cheques
Receive funds
Repayment on demand
Provide statement
Confidentiality
Slide 79
Paying-in slip
Slide 80
Count the cash Add up how much cash is being banked Compare total calculated with cash register record Calculate and investigate if discrepancy big Enter total for each denomination of note Add up numbers again and enter in total cash box
Paying in cheques
Slide 82
Returned cheques
Insufficient funds
Stolen cheques
X
Slide 83
3
Credit Card Company
Slide 84
Chapter 8
Slide 86
O
S
T
I
N
G
Slide 87
The material in this chapter is covered in the following BPP Learning Media i-Pass test.
Slide 88
Chapter 9
Controls
Slide 90
Slide 91
Expenses claims
EXPENSES CLAIM
Business travel Newspapers or magazines
$
X X
Telephone
Petrol Car service and repair Total Receipts must be attached for all amounts claimed Authorised by
X
X X X
Slide 92
Cash payments
Small payments out of petty cash
Cash wages
Slide 93
Preparing cheques
1 2 3 4 5 6 Prepare list of payments Authorise payments Check invoices to be paid Prepare cheques Sign cheques Mark invoices as paid
7
Slide 94
Stopping cheques
Slide 95
Slide 96
Standing Orders
Examples: Hire purchase/Rental/Insurance
Business making payment specifies:
Frequency
Banking details of supplier
Slide 97
Slide 98
Direct Debits
Differ from standing orders:
Recipient initiates payment
Slide 99
Slide 100
Remittance Advice
Slide 101
Chapter 10
Recording payments
Split of business
How complicated cash book may become
Slide 103
General ledger
Slide 104
Monthly salaries
Weekly wages
Slide 105
Chapter 11
Suppliers
Cleaners
Slide 107
Container
Limits
Supporting documentation
Slide 108
10 note
10 note 10 note
Slide 109
5 note
5 voucher
Slide 111
Slide 112
Payments
Date Narrative Total $ Stationery $ Travel $
6.1.X7
Cheque cashed
50
7.1.X7
City Stationers
10
10
8.1.X7
Slide 113
Chapter 12
Bank reconciliations
Bank statement
Slide 115
Bank Reconciliations
Cash transactions
posted to
Cash books
posted to
Bank statement
Slide 116
Slide 117
Bank Reconciliation
Cash account (cash book)
Bal b/d Error in bal b/d X X X Balance per statement Less: unpresented cheques Add: uncleared lodgements Bank errors Adjusted balance X (X) X X/(X) Y reconciles Dishonoured chq Bank charges, direct debits Bal c/d X X Y X
Slide 118
Chapter 13
14.1.X7 G. McGregor
Slide 120
Coding
Accounting codes used should be: Unique Useful Compact Meaningful Self-checking & of standard size Expandable
Slide 121
Coding systems
Sequence Block Significant digit Hierarchical Faceted
Slide 122
Give next available number Different sequences Incorporates description Interrelationship Different features
Coding sales
Sales invoice number
Product code numbers
Slide 123
Daily postings
Sales ledger
Slide 124
Weekly/monthly postings
General ledger
Chapter 14
Receivables Ledger
Ledger account
CUSTOMER S S Ltd ADDRESS 11 The Drive CREDIT LIMIT TERMS DISCOUNT DETAILS ACCOUNT INVOICES
3,000
30 days from date of invoice
Slide 126
Discounts
Trade discounts Given at time of sale/ purchase Bulk buying
Settlement discounts: Offered as incentive for early payment For example 5% if settled within 14 days May or may not be taken
Slide 127
Discounts allowed
Offered to customers Sales are recorded after trade discounts but before settlement discounts
Slide 128
Slide 129
Irrecoverable debts
Bad debts and irrecoverable debts are the same thing!
Slide 130
Doubtful debts
Slide 131
Slide 132
Chapter 15
Slide 134
Coding purchases
Supplier account number
Product or service number
Slide 135
Daily postings
Purchase ledger
Weekly/monthly postings
General ledger
Slide 136
Chapter 16
Payables Ledger
SUPPLIER ACCOUNT
Debit side Credit side
Payments made X
Purchase returns X
Invoices received X
Discounts received X
Slide 139
Discounts
Trade discounts Given at time of sale/ purchase Bulk buying
Settlement discounts: Offered as incentive for early payment For example 5% if settled within 14 days May or may not be taken
Slide 140
Discounts received
Received from the business suppliers
Purchases are recorded after trade discounts but before settlement discounts
Slide 141
Suppliers statement
Slide 142
3
4
Slide 143
Slide 144
Contras
Chapter 17
Control accounts
Control Accounts
Receivables and payables recorded in two places
1. Sales and purchase ledgers giving information on individual customers and suppliers 2. The general ledger Receivables account or Sales Ledger Control Account Payables account or Purchase Ledger Control Account giving information on receivables and payables in total.
Slide 147
Slide 148
Slide 149
Chapter 18
Payroll systems
Basic hourly rate
Piecework systems
Slide 151
Slide 152
paid to employee
Net wage
Pension
Income tax
Employers NI
TOTAL EXPENSE
Slide 153
Personnel records
A COMPANY PERSONNEL SYSTEM
Name: A Chappel
Main Menu
1 Personal details
Payroll function
Calculation of gross pay
Calculation of tax and other deductions
Timesheet
Example
Timesheet No Name Date
Job Start Finish Qty
Dept Week
Check Hour Rate Ext
Slide 156
Income Tax
Tax deducted at source covering all employees of an organisation
Slide 157
Benefit Contributions
Unemployment benefit
Income support
Healthcare contributions
State pension scheme contributions
Slide 158
Payslip
Slide 159
Remittance advice
Slide 160
Slide 161
CR
X
X
X
X X
PAYE liability
Slide 162