How accounting is recorded

How is accounting information recorded?

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An invoice/bill - List of goods/services provided with a statement of the sum due amount. A receipt - Is the action of receiving something or the fact of it being received. An invoice and receipt are both used to record sales transactions. An invoice is a request for payment whereas a receipt is a documentation that the payment has been finalized.

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Process used to record financial transactions?

                                                             Source entry - invoice/credit note                                                                                                          Book of prime entry - where all documents go                                       Sales day book/ sales return day book - any sales made/returns made                                Purchase day book/ purchase return day book - any purchases made/returns made                                    cash book/ petty cash book - big cash transaction/ small cash transactions                                                       ledger accounts (t accounts) -debit/credit transactions                                                                      Trail balance                                                                Financial statement

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Definitons of book of prime entry and ledger book

The word ledger means book.There are 3 different categories ....General/normal - records wages/sales/purchases/in shop expensesCreditors ledger/payable ledgers - money that is owed is normally written in brief detail in general but exact detail are written in payable ledgersDebtors ledgers/receivable ledger - money owed by customers are normally in general ledgers, but exact details are written in receivable ledgers Book of prime entry is used to capture transaction quickly so they are not lost or forgotten.

The purpose of content of the books of prime entry

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The cash book - this records amounts paid into and out the bank accountPetty cash book - records small amounts of cash paid day to daysales day book - sales invoices issued to credit customerspurchases day book - invoices from suppliersJournal - where adjustments/correcting errors are recorded.

Contents of book of prime entry