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Accounting-Introduction To Bookkeeping And Accounting Igcse Edexcel

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  1. Types-Of-Business-Organisation Igcse Edexcel
    4 主题
  2. Accounting-Concepts Igcse Edexcel
    1 主题
  3. Use-Of-Technology-In-Accounting Igcse Edexcel
    2 主题
  4. Professional-Ethics Igcse Edexcel
    1 主题
  5. Business-Documentation Igcse Edexcel
    3 主题
  6. Books-Of-Original-Entry Igcse Edexcel
    4 主题
  7. Ledger-Accounting Igcse Edexcel
    9 主题
  8. Capital-Expenditure-And-Revenue-Expenditure Igcse Edexcel
    2 主题
  9. Depreciation Igcse Edexcel
    4 主题
  10. Irrecoverable-Debts Igcse Edexcel
    2 主题
  11. Other-Receivables-And-Payables Igcse Edexcel
    2 主题
  12. Trial-Balance Igcse Edexcel
    1 主题
  13. Control-Accounts Igcse Edexcel
    3 主题
  14. Correction-Of-Errors Igcse Edexcel
    3 主题
  15. Bank-Reconciliation Igcse Edexcel
    2 主题
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Exam code:4AC1

Accounts for assets

How do I interpret ledger accounts for non-current assets?

  • At the start of an accounting period, the balance on an asset account will be on the debit side

Account is debited when:

Account is credited when:

  • More of the non-current asset

    is purchased

  • The non-current asset is sold

How do I interpret ledger accounts for trade receivables?

  • At the start of an accounting period, the balance on a trade receivables account will usually be on the debit side

  • A trade receivable account could start on the credit side

    • If the credit customer has returned goods to the business

    • And the goods have already been paid for

    • But the business has not yet refunded the credit customer

Account is debited when:

Account is credited when:

  • The customer buys more goods on credit

  • Interest is charged for an overdue balance

  • A cheque received from a customer is dishonoured

  • The business refunds the customer for goods that have already been paid for

  • The credit customer pays an invoice to the business

  • Cash discount is allowed to the customer by the business

  • The customer returns some goods

Accounts for liabilities

How do I interpret ledger accounts for liabilities?

  • At the start of an accounting period, the balance on a liability account will be on the credit side

Account is debited when:

Account is credited when:

  • The business repays some of its loan

  • The business borrows more money

    from the lender

How do I interpret ledger accounts for trade payables?

  • At the start of an accounting period, the balance on a trade payable account will usually be on the credit side

  • A trade payable account could start on the debit side

    • If the business has returned goods to a credit customer

    • And the goods have already been paid for

    • But the credit supplier has not yet refunded the business

Account is debited when:

Account is credited when:

  • The business pays an invoice to the credit supplier 

  • Cash discount is received by the business form the supplier

  • The business returns some goods

  • The business buys more goods on credit

  • Interest is charged for an overdue balance

  • A cheque sent to a supplier is returned

  • The supplier refunds the business for goods that have already been paid for

Accounts for expenses & incomes

How do I interpret ledger accounts for expenses?

  • At the start of an accounting period, the balance on an expense account should be zero

    • Unless there is an accrued or prepaid expense

  • There could be a starting balance on the debit side

    • if the business has made an early payment toward the expense for the current period

      • This is called a prepaid expense

  • There could be a starting balance on the credit side

    • if the business still owes money for an expense for the previous period

      • This is called an accrued expense

Account is debited when:

Account is credited when:

  • The business pays the expense

  • The balance is transferred to the

    income statement at the end of

    the accounting period

How do I interpret ledger accounts for incomes?

  • At the start of an accounting period, the balance on an income account should be zero

    • Unless there is accrued or prepaid income

  • There could be a starting balance on the debit side

    • if the business is waiting for money that should have been received in the previous period

      • This is called accrued income

  • There could be a starting balance on the credit side

    • if the business receives payments early for the current period

      • This is called prepaid income

Account is debited when:

Account is credited when:

  • The balance is transferred to the income statement at the end of the accounting period

  • The business receives the income

Accounts for equity & drawings

How do I interpret ledger accounts for drawings?

  • At the start of an accounting period, the balance on the drawings account will be zero

Account is debited when:

Account is credited when:

  • The owner takes money from the business for personal use

  • The owner takes goods from the business for personal use

  • The balance is transferred to the equity account at the end of the accounting period

How do I interpret ledger accounts for equity?

  • At the start of an accounting period, the balance on the equity account will be on the credit side

Account is debited when:

Account is credited when:

  • A loss is transferred from the income statement

  • The balance from the drawings account is transferred

  • The owner introduces money into the business

  • A profit is transferred from the income statement

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