The Accounting Process - 1673 Words

AQA AS Accounting ACCN1: Revision notes The accounting process: 1. Source documents: evidence that a financial transaction has taken place. 2. Day books: they are used to record day to day transactions. 3. Ledgers: these are T- accounts that are completed for all transactions. 4. Trial balance: must balance or else a suspense to correct missing figures. 5. Final accounts: Income statement and balance sheet. Source documents: What are source documents? Source documents are evidence that a financial transaction has taken place. Why do we need source documents? To calculate profitability To track movement of products such as inventory purchased from suppliers. To complete the final accounts such as the income statement and†¦show more content†¦Trade payables- This is when the business owner owes money to the supplier for goods purchased and it’s a current liability. Trade receivables- This is when the debtor owes money to business when the debtor is unable to repay the total amount when requested. Working capital- Cash available to run the business on a daily basis. Assets - Liabilities = Capital Questions on source documents and T- accounts 1. Bought Motor Vehicles for  £13,000 by cash. What’s the source document? What are the two T- accounts? 2. Rent and Rates paid via cheque,  £300 What’s the source document? What are the two T- accounts? 3. Lodged cash into bank,  £150 What’s the source document? What are the two T- accounts? Answers 1) Receipt would be th3e source document. 2) Cheque counterfoil would be the source document. 3) Paying slip counterfoil is the source document. Income statement This is a template for the income statement but you have to memorise it for the exam. In an exam they give you a trial balance from that you have to make the income statement. Brackets (around a figure) mean that it’s a negative number. ****** is the cost. Stock means inventory the date tells you if it’s opening or closing inventory. P for purchases, C for carriage in, OI stand for Opening Inventory LPR stands for less purchase returns, LCI stands for less closing inventory LSC stands for less cost ofShow MoreRelatedAccounting Analysis On The Accounting Cycle Process Essay2205 Words   |  9 PagesSummary [1-3 Paragraphs] Accounting relates to all a business does and is seen in every aspect of a business whether it is small or big and general. Whether one is a customer or has a job in a business, when looking into a company and seeing the steps and procedures a business does whether it be externally interacting, or in the books , I can now see how every decision either the customer takes or the business does affects different aspects of the businesses accounts. 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