The accounting cycle_1

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4-1 source documents what are source documents? they are invoice,receipt,deposit slip,check counterfoil,statement,payment confromation. The first documents that exist relating to a transaction. its serves as proof for a transaction (include date and time)

INVOICES

normally relate to credit transactions.

list goods or services provided and their .

suppliers normally send an invoice with goods or services

also know as a bill

indicate payment terms.

RECEIPTS

confirm that service or goods have been received

normally relate to cash transactions

DEPOSIT SLIPS

proof that cash,including currency and checks has been deposited in a bank account

CHECK COUNTERFOIL

this is the part of the check kept by the drawer(writer) of the check as a record of the transactions

STATEMENT

a report showing the amount owed by one business or another.

details of the transactions between the two businesses

PAYMENT CONFORMATION

when you buy stuff online.

cash receipts journals

where cash has been received only

cash payment journal

where all transactions that payout go

cash book and petty cash

cash book shows all receipts and payments together

petty cash is simply a sum of cash on hand to pay small expenses and could be in a separate journal

sales journal where you record income on credit to income from debtors

T ACCOUNTS

Trial balance

test of balances

ensures debits = credits

uses closing balances from the general ledger (t-accounts)

income statement

shows profit or loss of a business includes income and expenses

accounting period usually one year

the statement of changes in equity

changes to owners equity

capital

drawings

profit

income-expenses

balance sheet

shows changes over a certain period of time.

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