2 Terminology UK International Fixed Assets Non-current Assets A summary of the equivalent international version to the UK terms which are used within this assessment.UK InternationalFixed Assets Non-current AssetsStock InventoryDebtor ReceivableCreditor PayableIt is also important for you to be able to use the terms “main ledger” and “general ledger” interchangeably.Progressing through the AAT qualification and other accounting qualifications requires a knowledge of both UK GAAP terms and International Accounting Terms
3 Ledger accountsRun through terms eg Assets, Liabilities, Expenses, IncomeStress difference between Purchases and Expenses
13 Journal adjustmentsA written instruction by a bookkeeper to write a double entry into the general ledger accountsGenerally for adjustments therefore a narrative usually accompanies the double entry as explanation for the purpose
14 Journal adjustmentsE.g. £170 has been debited to insurance instead of motor taxJournal:Dr Motor taxCr InsuranceBeing motor tax posted to insurance in error
16 Journal adjustments Bad debts Arise when a debtor fails to pay and the debt is written offDR Bad debt expenseCR Sales Ledger Control AccountBeing the write off of a bad debt
17 Journal adjustments Contra entries A business is both a debtor and creditor of another business if it buys and sells with it.Both parties have to agree to “net” balances off i.e. Reduce both the creditor and debtor balancesDR Purchases Ledger Control AccountCR Sales Ledger Control AccountBeing the adjustment for a contra entry with ABC Ltd
21 Suspense accounts Used as a temporary holding account when Destination of a posting is uncertainThe Trial Balance does not balance and an error has to be investigatedReview producing a trial balance
Your consent to our cookies if you continue to use this website.