Sources And Recording Of Data

Somewhere in a shop this morning a customer took a printed slip, folded it, and put it in a pocket. That slip is the beginning of accounting. Before anyone can say whether a business made a profit, someone has to capture what happened, in writing, at the moment it happened. Every number in a set of financial statements can be traced back down the chain to a piece of paper that recorded one real event.

This lesson follows that chain from end to end. You will learn which document is created by which event, which of the seven books of prime entry it is written into, how it reaches the ledger as a pair of equal and opposite entries, and how those ledger balances finally become an income statement and a statement of financial position. You will complete an invoice, rule off a customer account, and run a petty cash book on the imprest system, which are the three tasks this content area is examined by most often.