Professional Bookkeeping and Accounting 1 - Sales and Purchases part 1 | Paula Guilfoyle | Skillshare

Professional Bookkeeping and Accounting 1 - Sales and Purchases part 1

Paula Guilfoyle, CPA, Online Educators, Lifelong Learner

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19 Lessons (1h 2m)
    • 1. 1intro

      2:28
    • 2. What is Sales tax

      1:00
    • 3. The principles of sales tax

      4:18
    • 4. How to calculate sales tax

      7:50
    • 5. Coding

      2:57
    • 6. Coding Samples

      1:31
    • 7. Class project - case study

      2:04
    • 8. Introduction to accounting for sales

      1:18
    • 9. Sales Invoices

      2:05
    • 10. Preparing Sales invoice with and without trade discount

      8:14
    • 11. Sales invoices without settlement discount

      7:45
    • 12. Sales credit notes

      2:59
    • 13. Case study activity 1

      1:05
    • 14. Statement and the AR department

      5:51
    • 15. Case study activity 2

      0:50
    • 16. Overview of the prime books of entry

      0:57
    • 17. Sales daybook

      6:58
    • 18. Case study activity 3

      0:46
    • 19. Conclusion

      0:48

About This Class

Professional Bookkeeping and Accounting 1 - a comprehensive course for those that need to record and account for Sales and Purchase transactions.

In This Class, You Will Learn How To Record And Account For Sales And Purchase transactions. You Will Also Learn The Process Behind These Transactions.

Do you need to understand and record sales or purchase transactions for your business? Are you considering a career in Bookkeeping or Accounting? Are you studying for Professional Accounting or Bookkeeping exams? THEN REGISTER NOW

Course Overview

Section 1 of this course is an introduction section. After the course introduction we will begin this course by introducing you to both Sales Tax and Coding as you will need a working understanding of these through out this course. You will also be presented with the case study that we will use in the activities in section 2 and 3 of this course.

In section 2 we will move into Sales.  We will look at preparing invoices and credits, with and without trade and settlement discounts. We will look at a statements and we will discuss the role of the AR department. After this we will look at the prime books of entry, cross totting and transferring information from invoices and credits to the sales and sales returns day books.  Through out this section you will have a number of activities using the case study presented in section 1 and these activities will give you the opportunity to:

  • Prepare sales invoices and credits with and without discounts and sales tax

  • Prepare customer statement

  • Enter sales transaction to the day books and then close the day books

In the second part of Professional Bookkeeping and Account 1 - Sales and purchases, we will move on to Purchases

Transcripts

1. 1intro: hi and welcome to this course professional bookkeeping and accounting one. In this course, we're going to cover sales. I'm we're going to cover purchases. But before we can cover sales, uncover purchases, there's some other topics that we need to introduce you to to carry your true covering sales. Uncovering purchases on the first of these topics is going to be sales tax. On the second off, these topics is going to be coding. So how is this course delivered? Well, this course, as you could see, is delivered by video tutorial on I'll go True. Some theory with you and I will also go through some practice examples which you and after the practice examples. There are always some activities, and it's extremely important that you as earlier, and carry out these activities to make sure that you understand the concepts that we have spoke about and that you're able to apply our knowledge in a working situation. So Section one of this course Arthuis introduction sections off sales tax on off coding. Section two were then going to look at sales on one. We're looking at sales. We're going to look at invoices and credit notes. You're going to be able to calculate sales with discounts on what I've discount. You'll be able to transfer sales invoices and sales credit notes to your day books on you'll be able to close off your table. You'll also have a basic understanding of credit control on the credit control process in Section Tree. Then we're going to move on to purchases on your going to be introduced to the purchasing process. You're gonna be introduced to purchasing documents and you're also going to be introduced Toothy checking process and the checking process of purchase invoices is extremely important to ensure that people don't get paid for stuff they haven't received or stuff that they've over charged you for. After you've checked invoices, we're gonna look at holding purchasing voices. We're gonna look at reconcile and creditor statement, and we're also going to look at transferring the details of these financial transactions into the appropriate day books. I'm closing off the table again. Let me highlight how important it is for you to actually carry out the activities that are in this course because I want you to take from this course and knowledge that you can apply to your work situation on a daily basis. So let's hop straight in on. We're going to start looking at themselves 2. What is Sales tax: sales tax is a concept that every bookkeeper and every accountant should understand. Understand that and should be able to calculate sales tax may be known on your different names in different countries. For example, in Ireland and the UK, sales tax is commonly referred to as a value added tax, or V a t. On. Under national rules, some small businesses have to register for sales tax, whereas some small businesses don't you need to be able to calculate sales text for a number of reasons on one of these reasons is that if you make an incorrect return to the authorities, there may be penalties involved in that. You may also find that if you send customers invoices with incorrect sales tax on them, either overcharging or under charging that your customer is going to be very unhappy. So what we're going to do is we're gonna look at some principles of sales tax, and we're also going to look at calculating same sex 3. The principles of sales tax: There are two types of sales tax. There is sales tax that you put onto a sales invoice when you were selling out on this is output sales tax, and there's also sales tax that you get on a purchasing voice when you buy something. This is input sales tax. So if you are a cellar or you are a supplier, you are going to charge output tax on your sales invoice. If you want a buyer or purchaser, you were going to get import on your purchase invoices. I would put tax minus your in protect is going to give you the sales tax payable or recover , but from the authorities. So let's look at an example Now See, we make some sailed on her output text on her sales equals 300. When we make some purchases on the import tax on our purchases is 450. So would we have payable or would we have a recoverable in this situation? What are import tax is greater than our output, so that would suggest that we're going to have a recoverable or the tax authorities Ozo spot this sales tax. So how much would they always back. Well, our output check minus our import tax would give us a refund in this situation off 150. And why is it a refund situation? Will, It's a refund situation because our output tax is less than our import. So the tax that we collected on behalf of the authorities, which is the output tech. So when we make a sale on, we put sales tax on our invoice were in effect collecting that money for the authorities. But then we pay over import tax because we pay the gross aumento over purchase invoices because our supplier is collecting that sales. So we have paid already paid over 450 in sales. So we don't need to pay the Tree 100 because we've over paid by 150. Let's have a look at another example. Let's say we made sales under aggregate output sales 625. We had some purchases on the aggregate purchase. Input tax is 500. Would we be in a payable or refundable situation now would be in a payable situation. The 625 minus the 500 is going to give US 125 payable because our output tax of 625 is greater than our import of 500. So to summarize our I'll put text less, our import tax is going to give us sales tax payable or the sales texts recoverable from the tax authorities. 4. How to calculate sales tax: In the last lesson, we looked a calculating whether sales tax was payable or was actually refundable. Now let's knock a calculating sales tax itself. But before we get into the actual calculations, let's go over some terminology. So your net amount is the amendment before sales tax is added. The gross meant is he meant that includes sales tax. So are net amount, plus our sales tax. Ament is going to give us our gross amount, and sales tax is calculated as a percentage off sales. So do you remember how to calculate percentages and decimals? Well, let's have a quick look at this table, so the net amount as a percentage is going to be 100%. So let's say you are buying a new chair on it costs 100 euros or $100 before sales tax. That's the net amount in that 100 equals 100% or also equals one as a decimal. Let's say our sales tax is 23%. That means our sales tax as a percentage equals 20 tree on As a decimal, it equals point to tree. So are gross amount, as a percentage is going to be our net amount plus our sales tax cement, which is ah, 123% or as a decimal 1.2 tree keeping that table in mind. So we've kept the table here for you to view. Let's look at an example calculation. So if we're given net sales off 150 with a sales tax read of 23% calculate the sales tax on the gross amount. Well, what we can easily say here is our net amount of 150 equals 100% 1% off. This is 150 divided by 100 and that will give us 1.5. And from here, we can then calculate are 23% because we know what 1% is. So if 1% equals 1.5, 23% equals 1.5 multiplied by 23 which is 34 50. So our sales tax on our sale of 150 at 23% is 34 50. So what's our gross Amend them? Well, our gross amount equals our net amount, plus our sales tax imminent, so it's equal to 123%. So that's equal to 150. Which is aren't net amount our sales tax amount, or 23% which is 34 50 combined, giving US 184 50? Let's have a look at another example. Let's say we give him roll sales off 750 with a sales tax sweet off 17.5%. Let's calculate the sales tax on the Net. And so last time we were given the Net Ammen. This time we need to calculate the Letterman so we know our gross sales off 750 equals 117% because we have a sales tax rate of 17.5%. 1% therefore, is 750 divided by 117.5, giving us six point tree. So if we know 1% equals 6.38 we know our sales tax amount is 17.5% so the 6.38 multiplied by the 17.5 given us womb warm 1 70 So that's our sales tax a names, but what are now adamant so we know our net amount equals 100% and we already know that 1% equals 6.38 So if 1% equals six point, treated 100% equals 6.38 multiplied by 100. Therefore, our net amount is 638. Next, we have a little activity for you to practice these calculations. 5. Coding: drought, your role as a bookkeeper or an accountant, you're gonna come across account codes quite frequently. On the counter code is a unique group of numbers or letters that are used to identify and classify items into particular groups. For example, the business will assign a unique number to identify different customers on a camp. Codes are also used in ledgers to differentiate between income expenditure assets on liabilities. Every business can decide on its own list of accounts to use on. There's a number of different types of lists that can be choosing from. For example, one or more letter can be used to identify customer or supplier. Andi, if you're using a letter, it is an alphabetical code for the purchase ledger. You could use PL standing for purchase letter, followed by a number, and this would be an Alfa New Miracle type of code For the sales ledger. You could use S L, followed by a number which is also an Alfa numerical number, and the Sands Ledger can also be referred to as the or El or the receivable ledger. There's also a system off coding that gives information, for example, the code with a number of digits. 010407 On the 1st 2 sets of digits. 01 Identifying the customer the 2nd 2 sets of digits. Identifying a particular product category on the for two sets of digits, actually identifying a product so you can have a set of codes that also gives information. So what use is coding? Well, colds can improve the accuracy off filing and reduce the time spent to find particular transactions or documents if you need to check the other lady later stage. Like if a transaction has unique account cold, we confined the document in the filing system, using that transaction reference instead of happened to go true, Every single track transaction that there is coding also helps to reduce errors. And how does it do this? Well, let's say you had to suppliers with very, very similar names. Well, by selecting the correct code, you can make sure that an invoice isn't entered onto the wrong came to, and coding also makes it easier to classify transactions because each business transaction that is gonna have its own cold. If you want to look at him, which the business the business spent on something like, say, telephone, you can do a search for the cold for just telephone. So the coding off invoices is extremely important for a number of reasons, and we're gonna look at coding invoices later on in the in the next section. But for the moment, I'm just going to show you some sample colds that you can have a look at. 6. Coding Samples: So in this slide, we're gonna look at some sample sequential or numerical colds. So, for example, a customer that you saw too, could have the name Alfa cleaning, and you could give him the cold 001 because it was first in your list on then Amy stationary 002 on blooms Flowers 00 tree. An example of some nominal ledgers would be for assets to be codes, 100 liabilities to hundreds, equity in the 400 income and revenue in the 500 expenses in the six hundreds on As you get more experienced with book keeping a baby, you will become more familiar. Were coding systems like these. Let's have a look at some alphabetical colds now so we could have some customers are for cleaning on our code. Could be a LP. The first tree letters off the business. Name A. Me A. M y and blooms flowers be out. Oh, and finally, let's have a look at some Alfa New Miracle colds. So this is where you would combine letters and numbers. So, for example, in the business name Alfa cleaning, it could be a 001 Amy stationary could be a 002 blooms. Flowers could be B 00 tree, for example, cause you may have to beef before that in your customer list. 7. Class project - case study: way. 8. Introduction to accounting for sales: welcome to Section two tonight. He should have a fairly good understanding off sales tax, and you should also be familiar with it. Campton codes. And we're going to take that information and we're going to move forward now, and we're going to look at sales in more detail. And by the end of the section, you're going to be able to explain the importance of an invoice off what details you'll find on the invoice. You'll be able to prepare invoices with no discount. We trade discount on with settlement discount You be able to explain the importance of a credit note and you'll be able to prepare credit notes again with discount and what I just without discount, we will be able to create a statement of account, and we know how to deal with any discrepancies that may arrive. We described the use of an age receivable. We'll explain what Kolding is on, how to create a coding system. We'll have a look at the prime books of entry on the transaction types, and we'll enter our sales on our returns into our sales. I'm returns day book. Well, then do some cross Scott tarting on cross casting examples. Andi within this with and close off on the day books. After this, we will then move on to the Purchase Ledger section. 9. Sales Invoices: an invoice is a financial document that send from a supplier or seller off goods to the actual buyer off the goods with service. It includes information such as the name and the address off the buyer on the seller. It includes the details of the items that were sold on the price off these items. If sales tax is payable, it's also going to give details off the sales tax on the invoice. On invoice is a document that a business ends to a customer to let them know how much they oden for goods that they have received on credit. It's very important that you send out invoices on time because what I would assailed invoice the customer is not going to pay for the goods. Included on sales invoices will be discounts if an era applicable on the first discount that were going to talk about is prayed. Disc aimed on trade discount is a reduction on the amount that you're charging gear customer, and you may do this for a number of reasons. You may wish to give trade. This came to a customer because there are valued customer and you want him to feel valued because they buy off you on a regular basis. You may also want to give a trade discount if large quantities are involved, so you can decide to reduce the price per unit on something. When quantity reaches a certain size on a unit is a measurable item. For example, in a stationery shop, a box of pains might be one unit. So if you were to buy 50 boxes of pens, you'll be buying 50 units, and you may receive a discount for doing that. It's very important that you are able to calculate invoices on to calculate any discount on any sales tax that are on the invoices. So what we're gonna do is we're gonna look at calculating some invoices with Andi what I discount. 10. Preparing Sales invoice with and without trade discount: remember our case. Study Jakes Palace. Well, Jakes Palace has a number of corporate customers that all have credit terms of 30 days from Endemol. And you, us, the bookkeeper need to raise the following invoices. So I'm gonna raise two invoices, which now on then there is a number of invoices that you need to go ahead on. You need to raise yourself. So the first invoice that needs to be raised, the P O. Number is given 12 tree 45 The customer is jazz events on the customer code is jazz. What we've had is one person Stay for two nights, bed and breakfast at a rate of 129 pair Harrison hair night. The product code is being be on the date of arrival is the 27th of January departing on the 29th of January. Sales taxes are 20% on your last invoice. Number is s I 456 So, given all of this sort of information, we can now go ahead and prepare the invoice. So I'm going to jump into our invoice template in excel and we'll have a look at this invoice. So here we are now in excel, and I have this invoice already prepared so we can go down through the actual detail off the invoice. So the first thing we note is as the seller we have our company details on the invoice. The invoice states that at the invoice on it states the employees date on and the invoice number and we were given our last invoice number two b s I 456 So we know this will be s I 457 We were also told that our credit terms or 30 days from date of invoice or 30 days end of months of February is a short month. Then over here, we have a customer on our customer addresses. We have our customer account code, our contact Harrison. We have the customer purchase order number. Then in the detail of our invoice, we have the actual detail to rate the rate para night giving us I remained on The total of our mates is aren't net in this particular example? We've no trade disc aimed. So are net. Totaled is the same as aren't net on our vast. We put in a 20% because we were also given us on our net. Plus our fat equals our gross. So take a look at this invoice in detail and make sure you understand all off the elements . What we're going to do next is we're going to prepare a new invoice. So before we look at the detail, if you right click on this select move or copy, it's like this. Create a copy and you'll notice a new copy has opened. We're going to rename this S I 458 because that's going to be our next invoice number. Now let's go in and let's have a look at the details of what our next invoice should be. So this invoice needs to be raised. P 0215 Customer consulting house customer code is c o N on. What we've got is to Paris UN's tree nights bed and breakfast to evening dinners at 179 pair person. The product code is B and B Andi date of arrival date off departure. Our sales tax on. In this particular case, we have a trade discount, so let's hop into our template on Let's have a look at this so The first thing we're going to do now is we're going to select our customer on its consulting house on in this particular temp. Later on, when you are using an automated A cane system, if you pull in particular coats, the rest of the field will auto popularly. So this has pulled in our campaign code and our contact person we now need to update our P O on our P O number is 215 We also now need to update our invoice date and we make it the 31st of January. I'm we'll update our invoice number from the detail. We know our code is BB on D R. Description is tree nights, bed and breakfast on to dinner. Our rate is 100 and 79. At three nights on, they arrived on the 27th UN departed on the heritage, but there was two people. So we need to copy this for the second person so we can just press, take all of this, replace it in here for the second person. Now, we've also being told that there is some trade discount topical to this kempt on the trade discount is 15% trade discount is calculated on the Net and meant before any sales tax. So let's put in our amend off 15% on our actual invoice on, Let's calculate that. So 100 and seven 1000 and 74 multiplied by 15% is going to give a discount of 161 10. So this reduces the amount the net amount because it is an actual discount. Our VAT then or our sales tax is at 20% and it's 20% off the 912 which is 100 and 82 58 giving us agro cement off 1256 58 Before we prepare our next invoice, let's discuss settlement discount a little. Let's look at preparing this invoice now, using the settlement discount that we've just discussed. So the purchase order is E 547 for Brand Unite, and it's for the hire of a conference room at 1000 per day. The product code to see your and it was on the 28th of January. There's no sales tax on this trade discount of 15%. There's also settlement discount to 7% if it's paid within five days. So here we are in our template. And what I've done is I've copied the previous invoice and we're ready to prepare the next invoice. So our customer is brand. Unite on. This has pulled in our account code on our contact person on our invoice number. In this case is s I 459 because it's the next invoice number and our purchase order number that we were given is e 547 our product codus sea or on its higher off conference room. The rate is 1000 at one day on the 28th of January. We know our trade dis camped is 15% and we have zero that now the reason I have zero sales Texas. The secondment discount is calculated differently in different countries in relation to sales tax, um, is before sales tax, sometimes its after sales tax. So the key to remember is that the invoice that you send a what is the growth cement before secondment? Because you need to assume that the customer is not going to pay this early, so you have to send the gross and before secondment, then you need to put in your credit terms, you need to put in your secondment disc empt which we have off 7% if paid within five days . So you need that statement on your invoice about the secondment discount on you, then need to calculate how much they would pay if they take that particular secondment discount. Next, we have an activity for you. What you're going to do is you're going to prepare a number off invoices. Some have second mentis came. Some have trade discounts. Um, don't have any disk and keep an eye on the sales tax free. 11. Sales invoices without settlement discount: we have now looked a calculating invoices with no discount. We've also looked a calculating invoices with some trade discount. There's still another type of this came that we haven't covered yet on That's settlement discount, which is also known as a cash discount or an early payment discount on its offer to encourage customers that have credit to pay earlier than the standard credit agreement time . Your business can actually choose the percentage second discount that you want to give on the terms off this discount that you want to give. For example, you could offer a 2% sacrament discount if the customer pays within seven days from the date of invoices instead of taking their normal credit period off 30 days. And the seller is going to give details off this settlement discount on the invoice. But when you're calculating the invoice, you must assume that the buyer isn't going to take the discount that they're going to take the full days on. The invoice is actually calculated on the amount before secondment disc aimed. You then put a comment on the end of the invoice that details the secondment disc aimed terms on the payment amount if the customer decides to take that second discount. So what we're gonna do is we're gonna have Ah, look, inner template calculating some invoices Now with settlement discount on, Let's look at preparing this invoice now, using the settlement discount that we've just discussed. So the purchase order is E 547 for Brand Unite. And it's for the hire of a conference room at 1000 per day product code to see your and it was on the 28th of January. There's no sales tax on this trade discount of 15%. There's also settlement discount to 7% if it's paid within five days. So here we are in our template, and what I've done is I've copied the previous invoice on we're ready to prepare the next invoice. So our customer is brand. Unite on. This has pulled in our camp code on our contact person on our invoice number. In this case is s I 459 because it's the next invoice number and our purchase order number that we were given his e 547 our product codus sea or on its higher off conference room, the Raiders 1000 at one day on the 28th of January. We know our trade discount is 15% and we have zero that now the reason I have zero sales. Texas. The secondment discount is calculated differently in different countries in relation to sales tax. Um, is before sales tax, sometimes its after sales tax. So the key to remember is that the invoice that you send a what is the gross amount before secondment? Because you need to assume that the customer is not going to pay this early, so you have to send the gross cement before second. Then you need to put in your credit terms you need to put in your secondment discount, which we have off seven percent if paid within five days. So you need that statement on your invoice about the secondment discount on you, then need to calculate how much they would pay if they take that particular secondment discount. Next, we have an activity for you. What you're going to do is you're going to prepare a number off invoices. Some have second dentists can, to some have trade discounts. Um, don't have any disk and keep an eye on the sales tax free 12. Sales credit notes: credit notes are issued. If there is a problem with the goods or services that's already being delivered or given. For example, if goods were faulty or if goods were not received at all, then the buyer would request a credit note on the center. Would sell Would send the customer credit note on the credit note. Gives the customer credit for the value off the goods on their set. Several things that you need to remember when you're preparing a credit note. First thing is that credit notes are numbered sequentially, like your invoices. If a trade discount was offered on the original invoice, this also needs to be taken into consideration. On the credit note, I'm reduced the value of the credit. No, by that, if settlement discount is on offer, that usually ignored on a credit note because it's highly unlikely that customer will have paid the sales invoice that actually needs the credit note. So over there to do now is we're going to hop into our template, and we're gonna have a look at preparing some credit. The following the credit needs to be raised. P o. Number 12345 Customer Jazz events. Customer Cold jazz one Paris in one night bed and breakfast at 100 and 29. Product code B and B date of arrival Date of departure sales tax on your last credit note number. So that's hoping to our template. And let's prepare this credit note So we know our last credit note number was SC 1 to 4 so we can change this. Noto SC 1 to 5 for a credit note number. We also know it to jazz events on our P O. Number is 12 tree for five. Our product code is B and B promises one night bed and breakfast at 129 and we've got one night's credit on our date of arrival. On date of departure are the 27th of January to the 28th of January. What we've done now this is a credit note, so it says credit note on it, and it gives all the details, Then off the item that actually leads to be credited in this particular case, there was no trade discount in the example that you're going to do next. There will be a trade discount, so keep an eye on that. That thing gives you the net goods total. And we know our that because our battery we got from the document on our growth on that credit. So it crab it don't forget, reduces the amount that old do your turn now. So why don't you prepare earthy credit note in the activity? 13. Case study activity 1: 14. Statement and the AR department: many businesses and companies and organizations are not going to pay you unless you've sent a statement off there. It kept on a statement. Off their accounts will show all of the invoices all of the credit notes on any payments that were made during the month when a customer received a statement of account. They're going to check it against their records to make sure the statement is actually correct. Statements should be sent out after the last day off the month, but very soon into the Newman on. It's important that they're sent out soon to make sure that you actually get paid on time. Large organizations are gonna have a team of employees working to make sure that customers have all off the correct information on pay their invoices on time and in a small business or a small complete. It's very common to see the accounts assistant doing this work. Sometimes there's going to be issues that need to be resolved. For example, if a customer has questions on items on this on the statement, what sort of questions do you think that they might have? Well, it could be that they have not received an invoice. It could also be that they're waiting on a credit note, or it could be that you have not received a payment that they have sent. It's very, very important that any issue that a customer raises which you on their statement is resolved as fast as possible. This will ensure a good customer relations. It'll sure that there's no delay on new receiving payment on it will also ensure that the customer continues to want to trade with you in the future. If a customer contacts you about a problem on their invoice, and you're not able to resolve it yourself, boring it to somebody that is at a higher level so it can be resolved as quickly as possible. Money owed to your business from customers is known as receivables or accounts receivable on the business needs to know on a regular basis, which customers open money on when it's actually do an age receive about. Alice's report is created to show you a list of customers on the amounts that they owe you on whether enough it is overdue. It's divided into periods, so you will see whether a debt is actually current. Whether it's 30 days old, 60 days old, 90 days old and so forth, so you can quickly identify what actually overdue on what? Not yet you on. The credit control department will use this report to ensure the customers are actually chased for money that is due to the business. A credit limit is the limit that you give to your customer that you'll allow your customer reach on credit. For example, you may set a credit limit of 10 grand. This means that your customer come by 10 grand's worth of goods, which you under their credit terms if they try and go a both this, then say it is not appropriate and you can refuse to sell them the goods until they have paid something off balance that they owe you. A business should also carry out a credit check to make sure that the customer is financially stable. Andi is able to pay their came. Not all companies have a credit control or in accounts receivable department, and you may find in smaller organizations that the bookkeeper or the campus systems actually carries out the role of a credit controller. Let's have a quick look at the key elements off a statement from Jakes Palace to one off his customers Jazz events on. We could see that it clearly says statement on the top of the document on that it contains the information off the actual supplier. So it's Jakes Palisson that has the contact details there. That then gives the data off the statements of the statement of account, as at the 31st 2 January 2000 and 16. And it has all off the customer details, including the came to code that if we go down to the detail, the columns that are shown is the date, the details, a deputy, a credit on the total. Now a dab it amendment is the amend that the debtor owes you. And if they make a payment, it will go into the creditor meant, or if there's a credit note, it would go on to the credit side on. If it's an invoice, it would go on toothy debit side. So what we have on this particular statement is we've been opening balance, which is a balance brought forward, be X stands for brought forward. Sometimes you would see their carry down or brought down, but this is the bottoms from the previous month. That's still outstanding. So there's 750 still outstanding from jazz emails from the previous months. On the 15 to January, there was a payment received off 250 on this. 250 in the running total reduces the overall total down here on the 30th the January. We then have an invoice as I 457 which you should remember preparing on. This goes onto the debit side on. It increases the total here have been the last transaction that's on the statement is the credit that we prepared on the credit. No value giving us our total value that sold at the end of the month. So remember, statement is a list of all transactions that happened within particular month. All off the invoices, all of the credits, all of the payments on the balance brought down. And then the total balance is the balance that old at the end of the month 15. Case study activity 2: 16. Overview of the prime books of entry: In the previous lessons, we learned how to prepare sales invoices. We learned how to prepare sales credit notes in this lesson. What we're going to do is we're gonna learn how to transfer the information from thes financial documents into the appropriate books off prime entry. So the books of prime entry are also known as the day books or the books of original entry on this is where relevant financial documents such a sales and credit notes are listed on. Then there totaled at the end of each day or we each month for businesses with fairly large amount of transactions. You're going to find that the day books or the prime books of entry will probably be totaled on a daily basis. So what we're gonna do is we're gonna hop into our template and we're gonna look are entering our sales invoices under sales credit notes into our sales day book Andi, into our Sales Returns Day book 17. Sales daybook: before we look at entering data into the day books, I want to explain to you what cross tarting news or cross Castaic. This is a technique that's used by captain any time that they are closing up the day books . Let's have a look at this table. We have our net amount. We have sailed tax about on them. We have our gross event and what is course totting Well, you'll see the gross here is in bold, and you'll also see this down here is in bold, and what this is is our quarrels. Talking is that aren't net andare sales tax if we crossed should be the same as our gross. And then all of our nets, which is 102 101 150 gives you 450. We then have sales tax 2041 30 on If we cross cut taught this or cross cast this 20 plus 40th 60 plus 30 is 90 now again, let's do some quarrel. Starting 450 plus 90 would give you 540 and it can then double confirmed this that 120 plus 240 plus 180 also gives you 540. And that is what crawls talking is. I. We're going to look at this in more detail in the sales day book on in a later module, inner other Day books as well. So here we are in our sales returned a book, and I'm going to complete this sales, returned a book and then for your activity, you to go ahead and you've to complete the actual sales daybook along. We're closing it off and doing the course starting, so let's have a look at filling it in. Well, the first column or the details that we're looking for is the date we're gonna look for the customer name credit number, the account number. Then we're gonna have the total the sales tax on the net over here. Then we have further analysis on what we have is bed and breakfast bed, breakfast, in dinner or conference room. So let's have a look at entering in the details that we have. So we have two credits for the month on both of our creditor. On the 30th of January 2000 and 16 the customer name for the 1st 1 is jazz events on the credit number is C or 1 to 5. The camp number is Jay Zed. The net amount on this credit note is 129. The sales tax amount is 25 25 80. Then we go. Truth e, further detail of this. Now, when we go through the total, we're going to use the cross casting to make sure this totals The totals are actually correct. And we know that the total off this is our sales tax Plus aren't net. So we're just at the two of them together. When will see that we now have our total filled in there. Now, if we go over to our analysis on have a look at our analysis, what was this credit for? Well, this credit was for one night bed and breakfast, so over in the analysis were put in 129 in one night. Bad breakfast. Let's go down to our next credit. And her next credit was also on the 30th of January 2000 and 16. Our customer name is customer name is consulting house. Our credit note number is 1 to 6 consulting. Now our sales tax amount on this invoice. 5 10 on a net amount. I don't forget that there was a settlement discount on this. Credit notes. Let's just have a look at this credit for a second, and we can see that we had trade discount of 15% on the amend. The net amount that goes in isn't the 30. It's the Net goods total, which is 25 50. So we can put in 25 50 Here on this credit was based on our bed breakfast and evening did it. So at the end of the month, we didn't. We then need to close off our books or are ledgers from what we do is we cross cast or we quarrels. So we want to have a look at the total. So are totally is 184 50. Our total sales tax for the period is 30 90 on our total net is 154 50 now 354 50 Close the 30 90 sure equal 185 40. And when you're using Excel, you can some them and see them down here on the information bar. Now let's go over to our analysis on our analysis. When we cross taught our analysis, we should also get the nat'l meant, which is 100 and 54 50 not the gross amount. Both the net adamant. So let's have a look across casting this on. The total credits for a bed and breakfast has been 129. The total credit for bed, breakfast and dinner has been 25 50. We've had no credits for a conference room. So if we cross cast that, which is our total, we can see that our total here is the same as our net Tokyo here. So that's quarrels, casting and what you need to make sure. Let me just double confirm you understand what needs to balance here. Your sales tax plus you're next is always going to equal to your toe. In your analysis, the total of your analysis should always equal to total of your net. Now I'm just going to copy this formatting here home former paint. I'm just paste that just to tidy that she'd up a little bit. So the next shed is the sale of stay book. I'm based on the all of the invoices that I have prepared with you on that you have prepared on your own. I want you now to update the sales Day book for the period of January on. I also want you to get the totals and ensure that the total's off the daybook equals the totals off the analysis columns and all the cross starting on cross casting actually balances. 18. Case study activity 3: 19. Conclusion: congratulations on finishing Section two off this course. By now, you should be able to explain the importance of a sales invoice. You should be able to prepare a sales invoice under a sales credit with him. Without different types off discount, you should be able to prepare a statement of account. And you should also be able to describe the credit control function on the collection of Kachin reports that should be used when you're collecting cash. In addition to this, you should be able to transfer all off your sales and returns transactions into your day. Books on you should be able to crawls. Cast your day books to get your closing totals. If you have any problems with completing any of this, please go back over the tutorial or public quick question on to the discussion board.