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Basic introduction

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3 views

Basic introduction

Uploaded by

Hussain Zareer
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Basic introduction

5.1) The types of book of original (prime) entries


Types of journal Item can be written
1) Purchase journal Credit purchase
2) Sales journal Credit Sales
3) Sales return journal Sales return(from the credit note)
4) Purchase return journal Purchase return(from the debit note or credit note received)
5) Cash book Amount paid or received by cheque or cash
6) General journal I)To create the expenses like provision for depreciation, Provision for
bad debts , Bad Debts written off etc.(all expenses, income)
ii) To correct the errors
iii) To buy fixed the asset on credit Example: Bought motor van on
credit

5.2)The format of sales invoice:


Sales invoice
Date Details $
2008 Debtors or trade receivables xxxx
Jan1
Transferred to sales a/c xxx

B)The format of purchase invoice


Purchase invoice
Date Details $
2008 Debtors or trade receivables xxxx
Jan1
Transferred to purchase a/c xxx

C)The format of sales return invoice


Sales return invoice
date Details $
2008 Debtors or trade receivables xxxx
Jan1
Transferred to salesreturn a/c xxx

Important notes for O level examination Page 1


D) The format of purchase return invoice
Purchase return invoice
date Details $
2008 Debtors or trade receivables Xxxx
Jan1
Transferred to purchase return Xxx
a/c

5.3)The important short notes are clearly given below.


a) Credit note: The document which is sent to the customer by the seller for the
damaged goods. (All sales return-Credit note issued)
b) Importance of the credit note: To reduce the amount in an invoice
c) Debit note: The document which is sent to the supplier by the customer for the damaged
goods. (All purchase return-Credit note received and debit note)
d) Cash discount: The discount is given to the buyer when settle the payment at correct time or
limited perod.it is included in the business books.
e) Trade discount: The discount is given to the buyer when buy the bulk quantity of goods. It is
not included in the books.
f) What are the difference between cash discount and trade discount?
Cash discount
i)Discount is given to buyer by the Supplier when buy the bulk Quantity of goods.
ii) Cash discount is recorded in the books.
Trade discount:
i) The discount is given to buyer by the supplier when buy the bulk quantity of goods.
ii) The trade discount is not recorded in the business books.

6) Important notes:

a) Credit note sales return


b) Debit note Purchase return
c) Credit note received Purchase return

Types of ledger account


7) Types of ledger accounts
1) Sales ledger Debtors a/c or trade receivable a/c or credit customers a/c
2) Purchase ledger Creditors a/c or trade payable or supplier a/c

3) Cash book Cash a/c and bank a/c ( All cash and bank transactions only)
4 General ledger All accounts which is not including debtor’s a/c, creditor’s a/c and cash
a/c and bank a/c .Examples: income a/expense a/c, asset a/c,sales
a/c,,purchase etc.
1)

Important notes for O level examination Page 2

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