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Accounting U2.

Unit 2 - Credit Transactions

QuestionAnswer
credit transaction when g are exchanged but the cash relating to the stock is not exchanged until a later date, meaning the customer owes a debt to the seller
invoice source doc that verifies the details of a credit transaction
why must terms be stated on an invoice? important for customer to know specifically when payment must be made and is also put onto a source doc = reliable
sales invoice a source doc that verifies a credit sale of stock
purchase invoice a source doc that verifies a credit purchase of stock or other items
debtor a customer who owes a debt to the business for g/s sold to them on credit
creditor a supplier who is owed a debt by the business for g/s purchased from them on credit
credit purchase a transaction that involves the acquisition of stock (or other goods) from a supplier who does not require payment until a later date
purchases journal an accounting record which summarises al transactions involving the purchase of stock on credit
credit purchase effect on b.s A - ^ (stock- 2000) L - ^ (creditors 2200) decrease (GST payable 200)
creditor formula: creditors balacne at start (b.s) + credit purchases incl GST ____sub balance____ - payments to creditors (cash payments journal) = creditors balance at end
creditors record a subsidiary accounting record which records each individual transactions with each individual creditor, and shows the balance ovine to that creditor at any point in time
creditors schedule a listing of the name and balance of each creditor's record
credit Sales - affect on b.s A-increase ( increase debtors 4246, decrease stock 1500)=2746 ______L-increase(GST payable 386) =386_____ O.E-increase(increase Sales 3860 and less COS 1500 = profit) = 2360
debtors record a subsidiary accounting record which details each individual transaction with each individual debtor, and shows the balance owed by that debtor at any point in time.
debtors schedule a listing of the name and balanceof each debtor's record
pros of using subsidiary records management of debtors/creditors:ensure invoices sent, debts collected, on time payments, _ detection of errors: checking balance calculated using formula against debtors/creditors and figure in b.s. - reliability _ease of reporting: only one figure inb.s
Created by: 96