There is a question in test, i.e what documents should accompany when payment is made to a supplier. And the answer is Remittance advice.
Could you please give an idea of what is remittance advise and also a little explanation of what are supplier statement, purchase requisition and purchase invoice.
There is a chapter at the end of the free lecture notes called “Business Documentation”, which explains all the different business documents. You can find the page number from the contents page.
are there rules of thumb which can be used to identify the functions of a book before we familiarise ourselves through revisions? For example suppose i was drawing up p&l if i had no prior experience i would be a bit confused about which figures to use for sales (made up of cash sales and credit sales (use the list of sales day journal total cash receivable book for cash sales).
Sorry but there are no real rules you can learn apart from what is explained in the lecture. It is a question of having to learn the names and functions of the various books.
One very standard way of controlling is the imprest system of petty cash, whereby cash is drawn from the bank at regular intervals e.g. weekly, and the amount drawn is exactly equal to the amount spent during the previous week. As a result the balance is always ‘topped up’ to the same fixed amount, which fixes an upper limit on the amount that could ever be stolen. This is part of the notes, may you please explain it?
i just start reading the course notes after lessening to the lectures,
– is it the proper way to go through the syllabus ? – where i can find the answers for the questions mentioned in the courses to check the accuracy of my initial answers.?
I really appriciate your helps with all of these lecture videos.
I have a question: at 16:20 I don’t get what he says. After determining cash 15.000, then what? And why is there a balance of 5.000 in Debit at the end? Thanks in advance.
This is just an illustration of the account – we are calculating the receivables at the end of the year. If total sales were 20,000 then we debit receivables with 20,000. If cash received from credit customers was (say) 15,000, then we credit receivables with 15,000. The end result (the balance) is a net debit of 5,000 – the total we are owed at the end of the period.
Thanks so much. But I am still confused. He adds a balance in credit right after sales, then makes total credit up to 20.000. If debit and credit are both accounted for 20.000 equally, the balance at the end of month should be 0, isn’t it?
There is a debit of 20,000 and a credit of 15,000. So a net debit of 5,000, which is what we end up with.
The figure on the credit side is the missing figure, or the balance – we then carry it forward to the opposite side.
I think it best if you watch my lecture on double entry to see how we balance of faccounts neatly.
adeelsays
So it means cash book works as a book of prime entry and as a part of double entry system? At the end of the day’s transactions when we want to complete a double entry for Credit purchases, again we use cashbook as part of double entry system right? Dr Payable ledger control account Cr Cash Book
Some companies call it the cash account, some call it the bank account. There is no rule. Most will call it the cash account. (If there is also ‘loose’ cash then this is normally called petty cash)
adeelsays
Thank you John. Much appreciated.
adeelsays
Thank you Christine.
sohailsays
The things i cant get somewhere else, i find here on opentution.
Whoo hoo! I luv it…Am currently doing T1 and T2 and this lecture is so much of a great help…….I received more insite of the topic.Thank you, keep up the gr88888888 job! *wink
THOUGH AM STUDENT WHO IS AT THE COLLEGE AND AM ON HOLIDAY, I FIND OPEN TUITION TO BE A BIG HELP AND FEEL LIKE AM IN CLASS WHILE AT HOME. KEEP IT UP. ARE YOU PARTNERS OR INDIVIDUAL?
Abbas says
Dear sir,
There is a question in test, i.e what documents should accompany when payment is made to a supplier.
And the answer is Remittance advice.
Could you please give an idea of what is remittance advise and also a little explanation of what are supplier statement, purchase requisition and purchase invoice.
John Moffat says
There is a chapter at the end of the free lecture notes called “Business Documentation”, which explains all the different business documents. You can find the page number from the contents page.
changuojiun says
are there rules of thumb which can be used to identify the functions of a book before we familiarise ourselves through revisions? For example suppose i was drawing up p&l if i had no prior experience i would be a bit confused about which figures to use for sales (made up of cash sales and credit sales (use the list of sales day journal total cash receivable book for cash sales).
John Moffat says
Sorry but there are no real rules you can learn apart from what is explained in the lecture. It is a question of having to learn the names and functions of the various books.
chandan says
One very standard way of controlling is the imprest system of petty cash, whereby cash is drawn from the bank at regular intervals e.g. weekly, and the amount drawn is exactly equal to the amount spent during the previous week. As a result the balance is always ‘topped up’ to the same fixed amount, which fixes an upper limit on the amount that could ever be stolen.
This is part of the notes, may you please explain it?
John Moffat says
Maybe you decide to start with $50 in petty cash.
During the first week you spend $10. That leaves $40. So the amount transferred from the bank is $10 – the float is back to $50.
During the second week you spend $20 – that leave $30. So the amount transferred from the bank is $20 – the float is back to $50.
and so on…..
Omotayo says
Thanks a lot for these lectures
Saleh says
Good Day,
appreciate the great help
i just start reading the course notes after lessening to the lectures,
– is it the proper way to go through the syllabus ?
– where i can find the answers for the questions mentioned in the courses to check the accuracy of my initial answers.?
so kind of you to revert
John Moffat says
You should have the notes in front of you while you are watching the lectures.
If you look at the contents page of the notes you will find that the answers to all of the examples are at the end.
Saleh says
Thanks alot
John Moffat says
You are welcome 🙂
Killian says
I really appriciate your helps with all of these lecture videos.
I have a question: at 16:20 I don’t get what he says. After determining cash 15.000, then what? And why is there a balance of 5.000 in Debit at the end?
Thanks in advance.
John Moffat says
This is just an illustration of the account – we are calculating the receivables at the end of the year.
If total sales were 20,000 then we debit receivables with 20,000. If cash received from credit customers was (say) 15,000, then we credit receivables with 15,000.
The end result (the balance) is a net debit of 5,000 – the total we are owed at the end of the period.
Killian says
Thanks so much. But I am still confused. He adds a balance in credit right after sales, then makes total credit up to 20.000. If debit and credit are both accounted for 20.000 equally, the balance at the end of month should be 0, isn’t it?
John Moffat says
There is a debit of 20,000 and a credit of 15,000.
So a net debit of 5,000, which is what we end up with.
The figure on the credit side is the missing figure, or the balance – we then carry it forward to the opposite side.
I think it best if you watch my lecture on double entry to see how we balance of faccounts neatly.
adeel says
So it means cash book works as a book of prime entry and as a part of double entry system? At the end of the day’s transactions when we want to complete a double entry for Credit purchases, again we use cashbook as part of double entry system right?
Dr Payable ledger control account
Cr Cash Book
Christine says
No. The cash book is a book of prime entry.
The total are posted to the cash account, which is part of the double entry.
adeel says
Would that be a cash account or bank account in the ledgers?
John Moffat says
Some companies call it the cash account, some call it the bank account. There is no rule.
Most will call it the cash account.
(If there is also ‘loose’ cash then this is normally called petty cash)
adeel says
Thank you John. Much appreciated.
adeel says
Thank you Christine.
sohail says
The things i cant get somewhere else, i find here on opentution.
toobazhar93 says
Thank you for the lecture! All doubts cleared 🙂
mdfhhm says
Kick ass lecture. Good job. And you were tidy enough. 😛
2ishanisah says
very well explained!!hats off to open tuition!!!
hanksolo106 says
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eliot2001224320 says
thumbs up. that was a well presented lecture, easy to understand.
ikay says
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kina says
very well explained,great thanks
maniali272 says
Nice Lecture It has cleared my confusion related this topic thanks.
kraheel says
Why the video is not working
phamtung says
very useful . thanks
tenillahenry says
Whoo hoo! I luv it…Am currently doing T1 and T2 and this lecture is so much of a great help…….I received more insite of the topic.Thank you, keep up the gr88888888 job! *wink
bhoke says
THOUGH AM STUDENT WHO IS AT THE COLLEGE AND AM ON HOLIDAY, I FIND OPEN TUITION TO BE A BIG HELP AND FEEL LIKE AM IN CLASS WHILE AT HOME. KEEP IT UP. ARE YOU PARTNERS OR INDIVIDUAL?
MONICA
John Moffat says
@bhoke, We are a company 🙂