Introduction to acccounting chapter 4 recording transactions(ledger)

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Introduction to acccounting chapter 4 recording transactions(ledger)

  1. 1. BIT 163 INTRODUCTION TO ACCOUNTING (RECORDING TRANSACTION LEDGER) CHAPTER FOUR
  2. 2. Recording Transactions (Ledger) <ul><li>Documents </li></ul><ul><li>-For example, when a sale of goods is made an invoice will be raised. On a purchase of goods an order form will be issued by the business. On receipt of goods it will receive a bill or invoice. On payment of amount due, a cheque is issued and a receipt will be received. </li></ul><ul><li>-This documents are called source documents. </li></ul><ul><li>-These provide evidence of transactions having occurred. </li></ul><ul><li>-Eg: bills, invoices, receipts, vouchers, order forms and cheque stubs. </li></ul>
  3. 3. Recording Transactions (Ledger) <ul><li>Common documents </li></ul><ul><li>-Invoices: These are documents given by the seller to the buyer. Details of transactions such as quantity, price discounts available, and other terms and conditions may be written on the invoice. </li></ul>
  4. 4. Common documents <ul><li>-Delivery Order: Issued by the seller when the seller delivers the goods to the buyer’s premises. </li></ul><ul><li>-Purchase Order: The buyers issues this documents to the seller, requesting goods. </li></ul>
  5. 5. Common documents <ul><li>- Debit Note: The seller issues this to the buyer if he has to charge an additional amount for goods already supplied, for example, when the seller has undercharged the buyer. </li></ul><ul><li>-Credit Note: The seller issues it to the buyer (credit customer) when the seller has to reduce the amount that the buyer owes. This could be for reasons such as: </li></ul>
  6. 6. Common documents <ul><li>-Credit Note: The seller issues it to the buyer (credit customer) when the seller has to reduce the amount that the buyer owes. This could be for reasons such as: </li></ul><ul><li>When the buyer has bought the goods on credit and is returning the goods. </li></ul><ul><li>The seller has overcharged the buyer and is reducing the amount due. </li></ul>
  7. 7. Common documents <ul><li>-Cheque book: Usually enterprises make payments by cheque. </li></ul><ul><li>-Bank Pay-in Slip: When cheques and cash are deposited into the bank, a bank in slip will be filled in. This will be the evidence for the amount banked in. </li></ul><ul><li>-Receipt: Issued by the seller on receipt of payment. </li></ul>
  8. 8. Common documents <ul><li>-Voucher: When an –enterprise makes a payment and does not receive a receipt, then it will issue a voucher. The person receiving the payment will sign it and return it to the enterprise. </li></ul>
  9. 9. Common documents <ul><li>-Statement: A statement is a list of all of the invoices, debit notes, credit notes and payments received for a particular time period, usually a month. The final figure will show the net amount that the customer owes to the seller. </li></ul>

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