ACCA F3 flashcards – set 3

The receivables ledger account is an account in the general (nominal) ledger recording the total amount owing from customer.

A debit balance on a bank statement means that the company is overdrawn.

The sales day book records all sales made on credit.

A goods received note is prepared by the company receiving the goods, and lists the quantity and description of the goods being received.

An error of principle is when an entry that should have been recorded in an asset account has been recorded in an expense account (or vice versa).

The bank reconciliation is done to check the accuracy of the entries in the cash book (and the accuracy of the bank statement).

An error of commission is when an entry has been posted to the wrong account.

A part-exchange agreement is where an old asset is provided in part payment for a new asset, the balance of the cost of the new asset being paid in cash.

A statement is prepared by the supplier and summarises the amount owing by the customer.

The residual value of an asset is the estimated disposal value at the end of its useful life.

An error of omission is a transaction that has not been recorded in the books of the company.

Compensating errors are two or more errors when the net effect is zero.

The accounts receivables ledger records the amounts owing by each individual customer.

A delivery note is provided by the supplier and lists the quantity and description of the goods being supplied.

The balance on the receivables ledger control account should be the same as the total of all the balances on the individual accounts in the accounts receivables ledger. If they are not the same then there must be an error.

An outstanding cheque is one that has been entered in the cash book but has not yet appeared on the bank statement.

The general ledger contains all the accounts necessary to produce the financial statements. The double entry is made between these accounts.

A reducing amount of depreciation is charged each year (a fixed percentage of the net book value).

A refund is a repayment of cash previously paid. It can occur for various reasons – e.g. the customer overpaid by mistake; the customer returned goods for which they had already paid.

An overdraft is a negative balance at the bank (i.e. the company owes money to the bank).

The payables ledger control account is an account in the general (nominal) ledger recording the total amount owing to suppliers.

Both are prepared by the supplier of the goods or services and detail the amount of payment being requested. The supplier calls it a sales invoice, the customer calls it a purchase invoice.

An error of original entry is when the correct double entry has been made, but where the amount is wrong.

The purchase day book records all purchases made on credit.

A credit note is a ‚negative invoice‘ and is prepared by the supplier to cancel a previous invoice (or part of an invoice) because of goods having been returned or because of an overcharge on the invoice.

The accounts payables ledger records the amounts owing to each individual supplier.

An uncleared lodgement is a receipt that has been entered in the cash book but has not yet appeared on the bank statement.