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Can you please tell me the sequence of the following
Day book
Journal
General ledger
Control account
Trial balanceInvoices are listed in the day books: SDB for sales invoices, PDB for purchase invoices.
The entries for each ‘day’ are totalled. This gives the total sales or purchases for the day.The general ledger:
For the SDB total: Cr Sales (Cr VAT split out as required); Dr Receivables control account
For the PDB total: Dr Various expenses and VAT; Cr Payables control accountIn the receivables ledger, Dr each individual invoice to the appropriate customer’s account.
In the payables ledger, Cr each individual invoice to the appropriate supplier’s account.
Journals are used as needed eg to put through depreciation, write off bad debts.
Trial balances can be taken at any time, but usually at least once a month.
Can you please help me with this confusion as well.
Post year end sales are an adjusting event, right. We’ll adjust them in the f/s, but then why do we stress so much on putting substantive procedures on checking whether they correctly used cut off?
Even if they didn’t apply cut off correctly, eventually it will have to be adjusted anyway
So why even bother with cut off?
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