Unit 4 The Accounting Cycle

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This is the accounting cycle:

Source Documents:

Invoices

Receipt

Deposit Slip

Check Counterfoil

Statement

Payment confirmation

Acts as a proof of transaction; original documents from the transaction.

Invoices

Lists Goods/services provided, price, terms

"Bills"

Usually credit

Recipt

Confirms that goods/services have been received.

Usually cash

Deposit Slip

Form you fill out when depositing money to the bank

Includes checks and currency

Check Counterfoil

The part of the check kept by the writer of the check; business checkbooks have them.

Statement

A report with:

The amount owed by one business to another

Details of transactions between the two

Dates, times, due dates & other terms of payment.

Payment Confirmation

Proof of Internet transaction

Usually sent by e-mail to the buyer.

Journal Entries

That format from the Debits and Credits unit; includes a small explanation

Folio Numbers

Cross-reference numbers

Journal entries refer back to source-document numbers

General-ledgers refer back to journal.

Makes it easy to follow data through the documents.

Cash receipts journal

Cash Payment journal

Sales Journal - Sales on Credit only

Sales Returns Journal - returned sales-on-credit (we won't deal with this.)

Purchases Journal - Purchases on credit only

Purchase Returns Journal - we won't deal with this either

General Journal - Everything Else.

Cash Journals

4-1 Source Documents

4-2 Journals