Accounting Transactions up to the TB

• PEARLS

  Purchases - goods a business buys to sell to others

  Expenses - day to day running costs of a business

  Assets - what a business owns

  Revenue - sales incl dividends, royalties, rent received

  Liability - what a business owes

  Sales - selling of goods to others in exchange for money
• DEADCLIC

  Debits - increases expense/assets. decreases liability/income

  Expenses - day to day running costs of the business

  Assets - what a business owns

  Drawings - money the owner withdraws from the business

  Credits - increases liability/income. decreases expense/asset

  Liabilities - what a business owes

  Income - sales made by business

  Capital - money owner puts into the business
• A cash sale is where the money is received at the same time as the sale is made. The double-entry is therefore:

  Dr Cash Book

  Cr VAT

  Cr Sales
• A credit sale is where the money is received at a later date. The double-entry is therefore:

   

  Dr Accounts receivable

  Cr VAT 

  Cr Sales
• A cash sale return

  is where the goods are returned to the business and the money the business received is returned to the buyer

   

  Dr Sales return

  Dr VAT

  Cr Cash book
• a credit sale retur is where the goods are returned to the business and the amount the buyer owes the business is reduced.

   

  Dr Sales return

  Dr VAT

  Cr Accounts receivable
• A cash purchase is where the money is paid at the same time as the purchase is made. The double-entry is therefore:

   

  Dr Purchases account

  Dr VAT

  Cr Cash book
• A credit purchase is where the money is paid at a later date. The double-entry is therefore:

   

  Dr Purchases account

  Dr VAT

  Cr Accounts payable
• A cash purchases return is where the money is given back to the buyer at the same time as the purchase is returned. The double-entry is therefore:

   

  Dr Cash book

  Cr Purchases return account

  Cr VAT
• A credit purchases return is where the money owed to the purchaser is reduced at the same time as the purchase is returned. The double-entry is therefore:

   

  Dr Accounts payable

  Cr Purchases return account

  Cr VAT