A-level Accounting₇₁₂₇

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.

• purchase invoices
• sales invoices
• credit notes
• cheque counterfoils
• till rolls
• cash receipts
• paying-in slip counterfoils
• bank statements (for standing orders, direct debits, credit transfers, dishonoured cheques, debit card transactions, direct transfers).

• purchases journal
• sales journal
• sales returns journal
• purchases returns journal
• general journal
• three column cash book.

• receivables ledger
• payables ledger
• general ledger accounts.

• trade and cash discounts
• disposal of non-current assets
• irrecoverable debts
• contra entries between accounts of credit customers and credit suppliers.

The distinction between revenue expenditure and capital expenditure, and revenue income and capital income.

The recording of adjustments in ledger accounts and financial statements.

• accruals
• prepayments
• income due
• income received in advance
• provisions for doubtful debts
• depreciation charges
• disposal of non-current assets
• opening and closing inventory.

Prepare and understand accounting records based on source documents and use the main books of prime entry and ledger accounts.

Apply the double entry model in the preparation of financial statements for a range of business organisations.

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:

• service businesses
• trading businesses.

Note: manufacturing accounts will not be examined.

Prepare statements of financial position (balance sheets) with subheadings.

Subheadings in a statement of financial position are:

• non-current assets
• current assets
• capital (equity)
• non-current liabilities
• current liabilities.

Make entries for simple adjustments for expense prepayments and accruals in ledger accounts and in income statements and statements of financial position.

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:

• straight line method
• reducing balance method.