It’s time for a DOM2234 QUIZ!

We will be having our first quiz for DOM2234 Principles Of Accounting on this coming Monday 18 December 2017 for Section 1 and 2. As for Section 3 the quiz will be held on 19 December 2017.

Please read, attempt some exercises related to the quiz. Cover topic 1, 2, 3  and 4. Put focus on topic 1 and 2. The quiz is for your carrymarks. Master your Debit and Credit as well as the basic topic of Accounting Equation.

So…Adios!

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Junior Apprentice – Section 1 – USR2004-1

Asalamualaikum and welcome to Junior Apprentice,

As you all know, this usrah module is designed to train your knowledge and skills to become a better businessman with virtuous values. You can refer to this link for references regarding this module…

https://tinyurl.com/usr2004

what we will discuss later is about your grouping, proposal and your marketing strategy. Ultimately you will put all that into practice during the Jumbo Sale Day. Finally, you have to prepare a report and the proceed of the sales made you will have the chance to donate to the organization in need.

See ya later!

What is accounts receivables?

Accounts receivables.

Accounts receivables is the money that the business has the right to receive it after the business had provided the other party either goods or services. The accounts receivables are also known as trade debtors where the business engages the activity of selling its goods or services to its customers on credit.

The sales made by cash or by cheque is simple. We just give our customer the goods and we receive money, either cash or cheque. But, when we deal with our customer, asking them to buy or to promote them to buy and we offer them a credit, where they take the goods first and then they will settle the payment later or at a agreed specified date. If this is the case, then we’re having a credit sales. Now, we have persons who owe us money.

A credit sales will eventually creates an account. An account that we are able to receive. That is why we call the person who owe us money an account receivables or a trade debtor. A debtor that comes from a trade activity. it falls under an asset category, specifically under a current asset category. Why? Because this accounts receivable is the person who us money, so, that is our money, they are holding our money. We see them walking around, we see our money in them. That’s is why accounts receivables is an asset.

What is the difference between a person who owe us money but not from the trading transaction?

A person who us money for some other reasons besides trading is known as debtors or we can put them as our sundry debtors. For example, Jack approached us to borrow some money. Since we don’t have some money in our pocket, we decided to lend him some from the business money. So you took some cash from the business and gave it to him. (Please don’t do this, it is not ethical!). Here, you have to record a transaction for the money you took just now from the business. Jack will be our sundry debtors, not an accounts receivables because he didn’t do any trading with us neither buy or sell. So, Jack will be classified under current asset specifically as sundry debtor.

The above concept can also be applied to accounts payable. Just think of the opposite. Okay?

 

Ok see ya later!

Applicable to #ACC1231, #BUS1233, #CBA1133, #DOM2234

BUS2231 – Control Accounts – Exercise 1

Try this, I took this from a website…http://www.accounting-basics-for-students.com/-debtors-creditors-control-accounts-question-.html which I also don’t know the answer yet. Why don’t you download this, print it and do it. Bring it to class for further discussion. Simple!

The following is a list of balances relating to Phiri Properties Ltd during 2010. The company maintains a memorandum debtors and creditors ledger in which the individual account of customers and suppliers are maintained.

 

These were as follows:

MK
Debit balance in debtors account      01/01/10                                         66,300.00
Credit balance in creditors account 01/01/10                                          50,600.00
Sunday credit balance on debtors ledger                                                      724.00
Goods purchased on credit                                                                          257,919.00
Goods sold on credit                                                                                      323,614.00
Cash received from debtors                                                                         299,149.00
Cash paid to suppliers                                                                                   210,522.00
Discount received                                                                                              2,663.00
Discount allowed                                                                                               2,930.00
Cash purchases                                                                                                   3,627.00
Cash sales                                                                                                              5,922.00
Bad Debts written off                                                                                        3,651.00
Interest on overdue account of customers                                                     277.00
Returns outwards                                                                                                2,926.00
Return inwards                                                                                                    2,805.00
Accounts settled by contra between debtors and creditors ledgers     1,106.00
Credit balances in debtors ledgers    31/12/10                                                 815.00
Debit balances in creditors ledger    31/12/10                                                  698.00

Required:

(a) Prepare the debtors control account as at 31/12/10.
(b) Prepare the creditors control account as at 31/12/10?

BUS2231 – Control Accounts

What is the purpose of control accounts?

A control account is a summary account in the general ledger. The details that support the balance in the summary account are contained in a subsidiary ledger—a ledger outside of the general ledger.

The purpose of the control account is to keep the general ledger free of details, yet have the correct balance for the financial statements. For example, the Accounts Receivable account in the general ledger could be a control account. If it were a control account, the company would merely update the account with a few amounts, such as total collections for the day, total sales on account for the day, total returns and allowances for the day, etc.

The details on each customer and each transaction would not be recorded in the Accounts Receivable control account in the general ledger. Rather, these details of the accounts receivable activity will be in the Accounts Receivable Subsidiary Ledger. This works well because the employees working with the general ledger probably do not need to see the details for every sale or every collection transaction. However, the sales manager and the credit manager will need to know detailed information on individual customers, including whether a customer recently reduced their account balance. The company can provide these individuals with access to the Accounts Receivable Subsidiary Ledger and can keep the general ledger free of a tremendous amount of detail.

Source: https://www.accountingcoach.com/blog/accounts-receivable-control-account-subsidiary-ledger

Sales Ledger Control Accounts And Purchases Ledger Control Accounts

Two of the most common Control Accounts are Sales Ledger Control Accounts and Purchases Ledger Control Accounts. After posting all transactions the balance of the Control Account and the sum of the detailed records in the Subsidiary Ledger should always be the same. In other words, a control account deals with summarized information while a subsidiary ledger deals with detailed information.  Because the control accounts contain summarized information they are also called total accounts. Therefore a control account for a Sales Ledger can be called a Sales ledger Control accounts or Total Debtors Account. A control account for a Purchases Ledger can be called a Purchases Ledger Control account or a Total Creditors Account.

 Sources of information for entries in Control Accounts

 Control Accounts

Significance of the balances on the control accounts

The closing balances on the sales ledger control accounts should be equal to the sum total of the closing balances on the individual debtor accounts in the sales ledger. It follow as well that the closing balances on the purchases ledger control accounts should be equal to the sum total of the closing balances on the individual creditor  accounts in the purchases ledger. If the respective balances are not in agreement then it would suggest some form of irregularity in the records which would need investigation.

Source: http://wizznotes.com/accounts/control-systems/sales-ledger-control-accounts-and-purchases-ledger-control-accounts