4. Source Document Flashcards
(18 cards)
What are source documents
The starting point of the accounting system.
They provide evidence of financial transactions; goods or services being bought or sold, money being paid or received
What are the source documents used by business
Sales invoice
Purchase invoice
Credit notes
Cheque counterfoils
Paying-in slip counterfoils
Cash receipts
Till rolls
Bank statements
What is an invoice
The document that a seller gives to the buyer when it supplies goods or services on credit.
It includes details of the goods and services supplied and amount paid
What are the two types of invoices + define them
Sales invoice - Issued by the seller when goods or services are sold on credit
Purchase invoice - received by the buyer when goods or services are bought on credot
What are credit notes
Issued to show that goods have been returned and don’t need to be paid for
Goods may have to be returned due to being damaged, faulty or not what was ordered
What are counterfoils
The stubs at the end of cheques and pay in slips
What are the two types of counterfoils + define them
Cheque counterfoils: provide a record of cheques paid by the business
Paying-in slip counterfoils: provide a record of cash and cheques banked by the business
What are cash receipts
Receipts for goods and services which have been paid when purchased (by cash, cheque or debit card)
What are till rolls
List the amount sold and paid for during a specific day and the total value of cash sales during that day
What are bank statements
Lists that were sent to business by their banks to show each individual receipt and payment as well as the balance on bank account
Information obtained from bank statements
Standing orders
Direct Debits
Debit card transactions
Credit transfers
Dishonoured Cheques
Bank charges
What are standing orders
When a business instructs its bank to make fixed payments and regular intervals
What are direct debits
Where one business authorises another to take payments out of its bank account and the amount varies according to how much is owed
What are debit card transactions
Payments using a debit card
What are credit transfers
Receipts or payments directly in or out of the bank account
BACS (Bank automated clearing services) are the most common method of credit transfer
What are dishonoured cheques
AKA returned cheques
Cheques that have been returned by the bank because there isn’t enough money in the account to make the payment
What are bank charges
Expenses to a business for using the bank account or interest and being overdrawn
Whats the difference between trade discount and cash discount
Trade discount = given for 9buying in bulk
Cash discount = offered to enourage quick payment
invoice will show how much % discount can be claimed
