Chapter 3: Accounting for sales & sales returns Flashcards Preview

AAT (L2): FINAL Chapter Summary > Chapter 3: Accounting for sales & sales returns > Flashcards

Flashcards in Chapter 3: Accounting for sales & sales returns Deck (22)
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1
Q

What specific stages of recording & presenting financial transactions does the accounting system contain?

A
  • Financial Documents
  • Books of Prime entry
  • Double Entry Book-Keeping
  • Trial Balance
2
Q

The financial documents relating to credit sales are

A
  • Sales invoices

- Credit notes issued

3
Q

What is the sales day book prepared from?

A

From Credit notes to customers.

4
Q

What is the sales day book for credit sales?

A

The book of prime entry.

5
Q

Recording credit sales in the double-entry system uses?

A

Financial Documents: Sales Invoices
Books of Prime Entry: Sales Day Books
Double-Entry Accounts: General Ledger
Memorandum Acounts: Sales Ledger

6
Q

Analysed Sales & Sales Returns day books are used when?

A

When a business wishes to analyse it’s sales between different departments or

Different categories of goods sold / services supplied.

7
Q

Financial Documents?

A

Source Documents for the accounting records

8
Q

Books of prime entry?

A

The first accounting books in which transactions are recorded

9
Q

Coding?

A

Cross-referencing methods used to trace transactions through the accounting system

10
Q

Ledger?

A

Collection of accounts within the accounting system

11
Q

Debit entry?

A

Records a gain in value

an asset

or an expense

12
Q

Credit entry?

A

Records the giving of value

a liability

or an income item

13
Q

Sales?

A

The sale of goods in which the business trades

14
Q

Capital Income?

A

Income from items other than than the goods in which the business trades

(eg. a shop selling its old cash till)

15
Q

Revenue income?

A

Income from the goods in which the business trades

16
Q

Sales returns?

A

Goods previously sold on credit which are returned to the business by its customers

17
Q

Sales returns day book?

A

Book of prime entry prepared from sales invoices

18
Q

Sales returns day book?

A

Book of prime entry

prepared from credit notes issued to customers

19
Q

Analysed sales day book?

A

Day books which incorporate analysis columns

(eg. between different departments

or

Different categories of goods / services sold)

20
Q

General Ledger

A

Ledger section which includes

Sales account
Sales returns account
Sales ledger control account
VAT account

21
Q

Sales Ledger

A

Subsidiary ledger section which contains the memorandum accounts of the firm’s receivables (customers)

22
Q

Memorandum account?

A

A subsidiary ledger
(eg sales ledger)

account which provides a record of individual amounts
(eg owing by receivables to the business)