3.3 The double entry model
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Additional information |
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The double entry system including the recording of transactions from source documents in books of prime entry and ledger accounts; transferring accounts to income statements, balancing accounts and the preparation of statements of financial position. |
Source documents are:
The distinction between revenue expenditure and capital expenditure, and revenue income and capital income. |
The recording of adjustments in ledger accounts and financial statements. |
Adjustments are:
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Prepare and understand accounting records based on source documents and use the main books of prime entry and ledger accounts. |
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Apply the double entry model in the preparation of financial statements for a range of business organisations. |
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Prepare income statements (trading and profit and loss accounts) and statements of financial position (balance sheets) working from trial balances and additional information. |
Financial statements could be for:
Note: manufacturing accounts will not be examined. |
Prepare statements of financial position (balance sheets) with subheadings. |
Subheadings in a statement of financial position are:
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Make entries for simple adjustments for expense prepayments and accruals in ledger accounts and in income statements and statements of financial position. |
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Make entries for irrecoverable debts in the sales ledger and financial statements. |
Entries could include those for the recovery of irrecoverable debts. |
Make entries for depreciation in the income statement and statement of financial position. |
Depreciation methods are:
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