Accounting Notes Quarter II

Vocabulary

Check (n.) a business form ordering a bank to pay cash from a bank account.

Invoice (n.) a form describing the goods or services sold, the quantity, and
the price.

Journalizing (n.) the process of recording a business transaction in the

accounting records.

Memorandum (n.) a form on which a brief message is written describing a

transaction

Receipt (n.) a business form giving written acknowledgement for cash

received.

Source documents (n.) the physical basis upon which business transactions
are recorded.

Sales Invoice (n.) an invoice used as a source document for recording a sale
on account.

Four parts of a journal entry: Date, Debit, Credit, Source documents

Standard Accounting Practices

- Words in accounting records are written in full when space permits.
Words may be abbreviated only when space is limited.
All items must be written legibly.
- Dollars and cents signs and decimal points are not used when writing
amounts in ruled accounting paper.
Sometimes a color tint or a heavy vertical rule is used on printed
accounting paper to separate the dollars and cents columns.
- Two zeroes are written in the cents column when an amount is in even
dollars, such as $500.00.
If the cents column is blank. Doubts may arise later about the correct
amount.
- A single line is ruled across amount columns to indicate a calculation
such as addition.
- A double line is ruled across amount columns to indicate that the
amounts are totals, and that debit totals equal the credit totals.
 - Neatness is very important.

Three steps of proving a journal page

1. Total the debit column entries.
2. Total the credit column entries.
3. Verify that the total debits and total credits are equal.
Part II

GAAP or Generally Accepted Accounting Principles

Example: Debit is left, and credit is right.

Unit of Measurement concept: There must only be one unit of

measurement used in an account.
Example: Thai accountants use Thai Bath in an account.

Business Entity: An entity that is formed and administered as per

commercial law in order to engage in business activities.

ACCA Code of Ethics

The Association of Chartered Certified Accountants sets out extensive
guidance for Accountants based around five principles:
1. Integrity
2. Objectivity
3. Professional competence and due care
4. Confidentiality
5. Professional behavior

A group of accounts is called a ledger.

A ledger contains all accounts needed to prepare financial statements is
called a general ledger.
The name given to an account is known as an account title.
The number assigned to an account is called an account number.
The procedure for arranging accounts in a general ledger is called file
maintenance.
Writing an account title and number on the heading of an account is called
opening an account.
Money you set aside to reach a goal is called savings.

Goal Seek is an Excel program able to be used to calculate finding a desired

amount of something in order to reach the goal.