Unit 4 The Accounting Cycle

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1. Source Documents 2. Journals 3. Ledger (T-Accounts) 4. Trial Balance 5. Financial Statements
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What are Source Documents? Invoice Receipt Deposit Slip Check Counterfoil Statement Payment Confirmation

4-1 Source Documents

Why Source Documents?The first documents that exist relating to a transaction. Serve as proof for a transaction Include Date &Time

InvoicesNormally relate to credit transactionsList goods or services provided and their prices.Suppliers normally send an invoice with goods (or once services have been delivered) Indicate payment terms(time) "Bills"

Reciepts Confirm that services or goods have been received Normally relate to cash transactions.

Deposit SlipsProof that cash has been deposited in a bank account.

Check CounterfoilThis is the part of the check kept by the drawer (writer) of the check as a record of the transaction

StatementA report showing- amount owed by one business to another- details of transactions between the two businesses

Payment Confirmation

Unit 1 3. You can determine the difference between net income and net loss because net income is when you bring in money and net loss is when your spending more money than bringing it in. You can also tell the difference by Revenue > Equity for Net Income and for Net Loss Revenue Unit 2 1. Having a starting capital is very important, because starting without capital,  a business can't function properly. A business needs money to begin for initial expenses. Unit 3 1. Investing is spending money on assets, which is on the left side. Income is getting money capital, income or borrowing (right side). Unit 4 Source documents are the original documents from a transaction. They include the date and time it took place as well as the amounts and people/accounts involved. They can be used as proof that the transactions took place and to verify the details when putting the information into another format.

4-1 Source Documents

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