Unit 4 The Accounting Cycle

This is the accounting cycle:

Source Documents:

Invoices Receipt Deposit Slip Check Counterfoil Statement Payment confirmation Acts as a proof of transaction; original documents from the transaction.

Invoices

Lists Goods/services provided, price, terms "Bills" Usually credit

Recipt

Confirms that goods/services have been received. Usually cash

Deposit Slip

Form you fill out when depositing money to the bank Includes checks and currency

Check Counterfoil

The part of the check kept by the writer of the check; business checkbooks have them.

Statement

A report with:

The amount owed by one business to another Details of transactions between the two Dates, times, due dates & other terms of payment.

Payment Confirmation

Proof of Internet transaction Usually sent by e-mail to the buyer.

Journal Entries

That format from the Debits and Credits unit; includes a small explanation

Folio Numbers

Cross-reference numbersJournal entries refer back to source-document numbers General-ledgers refer back to journal.Makes it easy to follow data through the documents.  

Cash receipts journalCash Payment journalSales Journal - Sales on Credit onlySales Returns Journal - returned sales-on-credit (we won't deal with this.)Purchases Journal - Purchases on credit onlyPurchase Returns Journal - we won't deal with this eitherGeneral Journal - Everything Else.

Cash Journals

4-1 Source Documents

4-2 Journals