IOB1/CH4: Accounting for Sales Flashcards
Understanding the process of sales invoices and credit notes on ledgers and BoPE, and coding sales (9 cards)
when entering sales invoices and sales credit notes in the BoPE, what happens with cash sales?
recorded in ‘cash book receipts’ not in BoPE
where is a sales invoice recorded?
sales day book SDP
where is a credit note ‘negative invoice’ recorded?
sales returns day book SDRP
what is a receivables ledger?
customer account. a business needs to know how much each individual credit customer owes them so that they can chase debts when overdue.
what is the receivables ledger also know as? and why?
‘subsidary’ or ‘memorandum’.
this is not part of the double entry booking system.
on an account of an individual credit customer, what is on the left and right side?
left: invoices we have issued to the customer. this shows increases in the amount owed by the customer.
right: credit notes sent to customer and payments they have made to us. this shows the reduction of the amount owed to us by the customer.
why are coding sales used?
when processing sales invoices and credit notes, codes can be used to enter into the system quickly and easily.
define customer code
identifies the customer
Jo Bloggs: JB001
first customer with those initials
Fred Smith: FS003
third customer with those initials
define general ledger code
identifies account which entry can be made
TShirt: 4001
Trousers: 4002
Jeans: 4003
