SOURCE DOCUMENTS
lead to
JOURNALS
lead to
LEDGERS
lead to
TRIAL BALANCE
leads to
FINAL ACCOUNTS
The documents which record your
sales,
purchases and
payments are the first step, the
source in the
document cycle which leads to the company's final accounts.
SOURCE DOCUMENTS are:
- Receipts
- Cash Sales Dockets/lodgements
- Copy invoices (sent)
- Credit note (sent)
- Invoices received
- Credit notes received
- Cheque Butts
The documents are entered into Journals, either on computer or a manual system.
JOURNALS are:
- Cash receipts
- Sales
- Sales return
- Purchase
- Purchase returns
- Cash payments
Journals are collated into LEDGERS:
From these ledgers the trial balance and finally the Final
Accounts are produced. The final accounts are made up of the
Balance Sheet, which sets out the company's
assets and
liabilities as a
balanced scales (Assets and liailities must always be equal in a balance sheet) and the
Revenue Statement which sets out the
Profit and Loss information for the company for the year.