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Finance and Economics Essay

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Below is an essay on "Finance and Economics" from Anti Essays, your source for research papers, essays, and term paper examples.

Credit transactions
SU 6

Overview:
 Purchases
 Sales  General

Purchases

Purchases: Overview
 Purchases

journal  Purchases returns journal  Creditors ledger  Settlement discount  Creditors reconciliation  Disclosure

Purchase journal

Purchases journal



AKA Creditors journal Owe money to the creditor iro inventory purchases


Credit balance – Liability



Goods purchased on credit
Source document: Original credit invoice  Purchase journal (PJ)

   

Doc #, Date, Details, Folio VAT input Purchases (exclude VAT) Creditors (include VAT)

VAT


Creditors
 



Purchases


Full amount payable  VAT inclusive 114 ‘Own’ cost (after deducting input tax) 100 14



 

VAT


Calculations


Purchases = Creditors x VAT input = Creditors x

100 114



14 114

Example
Entity name Purchases Journal - Month Year Doc No. Day Details PJ# Fol VAT input Purchases Creditors

Closing-off procedure



End of each month Procedure


Calculate column totals & balance


Purchases + VAT input should = Creditors

Transfer individual entries to corresponding creditors account in creditor ledger  Post column totals to GL



Remember: Double entry!!!



Enter folio numbers from GL and creditor ledger in PJ [Example: Page 191]

Purchases returns journal

Purchases return journal


Return (trade) goods purchased on credit
 

Purchaser issues debit note Seller issues credit note


 

Source document
  

Decrease amount owed

Purchase return journal (PRJ)

Credit note issued by seller



Close-off procedures


Doc No., Day, Details, Folio VAT input, Purchases return, Creditors Same as PJ

[Example: Page 193]

Example
Entity name Purchases Returns Journal - Month Year Doc No. Day Details Purchases Fol VAT input returns Creditors PRJ#

Ledgers etc.

Creditors ledger
 Record

of transactions with individual...

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Citations

MLA Citation

"Finance and Economics". Anti Essays. 23 Nov. 2017

<http://www.antiessays.com/free-essays/Finance-And-Economics-602499.html>

APA Citation

Finance and Economics. Anti Essays. Retrieved November 23, 2017, from the World Wide Web: http://www.antiessays.com/free-essays/Finance-And-Economics-602499.html