Debtors(Module: 11 - 13) Flashcards
What are debtors?
customers who buy items on credit.
When goods are sold and are paid for later it is called a…
credit sale.
Why are debtors assets?
debtors are assets because the business still has a legal claim to the goods sold.
what is “terms of credit”?
the time the debtor has to pay back a loan.
What source document is used in a credit sale?
The duplicate of an invoice.
why do assts increase in the event of a credit sale?
because debtors are an asset to the business and the reason used in the accounting equation is
The three main columns in a debtors journal are: cost of sales, sales and…
(excluding doc No., folio and date columns)
Cost of sales.
what does the debtors journal record?
the debtors journal records all of the credit transactions that occur in a business.
What happens when a debtor pays the business a part of their due sum?
Cash ( an asset) increases and debtors control (also an asset) decreases.
when a debtor returns goods the bought it is recorded in the…
debtors allowance journal.
when a debtor pays the business a part of their due sum, in which journal will this transaction be recorded in?
The cash receipts journal.
Which new column is added to the CPJ when a business accepts credit sales?
The debtors control column.
In which journal are all credit transactions recorded?
The debtors journal.
