Sources and recording of data
At the end of this unit
The double entry system of book-keeping
- explain the meaning of assets, liabilities and owner’s equity (capital)
- explain and apply the accounting equation
- outline the double entry system of book-keeping
- process accounting data using the double entry system
- recognise the division of the ledger into the sales ledger, the purchases ledger and the nominal (general ledger).
- recognise and understand the following business documents: invoice, credit note, debit note, statement of account
- complete proforma business documents
- understand the use of business documents as sources of information.
Books of prime (original) entry
- explain the advantage of using various books of prime entry
- explain the use of, and process, accounting data in the books of prime (original) entry – cash book, petty cash book, sales journal, purchases journal, sales returns journal, purchases returns journal and the journal
- post the ledger entries from the books of prime (original) entry
- distinguish between and account for trade discount and cash discounts
- explain the dual function of the cash book as a book of prime (original) entry and as a ledger account for bank and cash
- explain and apply the imprest system of petty cash.
- prepare ledger accounts in either “T” account format or running balance format
- post transactions to the ledger accounts
- balance ledger accounts as required and make transfers to final accounts
- interpret ledger accounts and their balances.