Mrs. Carpenter: Unit 1 Accounting Revision Notes Essay Example
Mrs Carpenter- Unit 1 Accounting Revision Notes:
Purpose of Preparing Accounts:
Accounting records all financial transactions that occur during a period of time, for example the financial year. This is necessary so that the owner can control their business and control how it is performing and use the accounts to make good business decisions. It also means that the owner can: * Provide records of information that is required by HM Revenue and Customers for tax purposes and VAT returns * Provide records required by suppliers of additional finance, e.g. banks
Accounting Records: Subsidiary Books and Ledger Accounts: * Invoices- * Sales Invoices-records sales made by the business * Purchase Invoices- record the purchases made by the business * Bank Statement-Records all transactions made to or from the businesses bank account * Cash Book Counterfoil-Records any payments the business had made via check * Paying-in Slip Counterfoil-records any payments of cash that the business has paid into their bank account * Till Receipts-Records any sales that the business has made * Bank Statement-Evidence of standing orders (when a fixed payment is made each month by the business bank account under their authority), direct debits (when either a fixed or variable amount is paid by the business through their bank account) and bank charges. * Credit Notes-either received by the business to keep a track of what they owe or sent out to credit customers to remind them of their balance.
Subsidiary Books- * General Journal-This is used when there isn’t another appropriate book of prime entry. This has six main uses: when fixed assets are purchased on a credit basis, when fixed assets are sold on credit, when a business first comes into existence, when a business finally closes, for the correction of errors and for recording inter-ledger transfers. The source documents used would be the purchase invoices for capital expenditure
Purpose of Preparing Accounts:
Accounting records all financial transactions that occur during a period of time, for example the financial year. This is necessary so that the owner can control their business and control how it is performing and use the accounts to make good business decisions. It also means that the owner can: * Provide records of information that is required by HM Revenue and Customers for tax purposes and VAT returns * Provide records required by suppliers of additional finance, e.g. banks
Accounting Records: Subsidiary Books and Ledger Accounts: * Invoices- * Sales Invoices-records sales made by the business * Purchase Invoices- record the purchases made by the business * Bank Statement-Records all transactions made to or from the businesses bank account * Cash Book Counterfoil-Records any payments the business had made via check * Paying-in Slip Counterfoil-records any payments of cash that the business has paid into their bank account * Till Receipts-Records any sales that the business has made * Bank Statement-Evidence of standing orders (when a fixed payment is made each month by the business bank account under their authority), direct debits (when either a fixed or variable amount is paid by the business through their bank account) and bank charges. * Credit Notes-either received by the business to keep a track of what they owe or sent out to credit customers to remind them of their balance.
Subsidiary Books- * General Journal-This is used when there isn’t another appropriate book of prime entry. This has six main uses: when fixed assets are purchased on a credit basis, when fixed assets are sold on credit, when a business first comes into existence, when a business finally closes, for the correction of errors and for recording inter-ledger transfers. The source documents used would be the purchase invoices for capital expenditure