BOOK KEEPING CYCLE

1. Writing in the relevant day book

2. Posting from Day Book to the Account

3. Taking a trial Balance

4. Adjustment made

5. Prepare the Financial Account (i.e Income Statement, Statement of financial Position, etc)

1.2 The role of source documents

Types of source documents

1. Quotation. A document sent to a customer by a company stating the fixed price of goods

and services. Quotation cant be changed once they have been accepted by the

customer.

2. Purchase order. A document of the company that details goods or services to purchase

from supplier. Purchase orders are sequentially numbered.

3. Sales order. A document of the company that details an order placed by a customer for
goods or services. Sales orders are usually sequentially numbered.

4. Goods received note. A document of the company that lists the goods received from a

supplier. A goods received note is usually prepared by warehouse or goods receiving

area.

5. Goods dispatched note. A document of the company that lists the goods sent out to a

customer. One copy kept by the customer, one copy signed by the customer and

retained by the supplier.

6. Statement. A document sent out by a supplier to a customer listing the transactions on

the customers account, including credit notes, settlement discount and payments for a

given period of time. The statement also shows the current amount owed by the

customer.

7. Credit note. A document sent by a supplier to a customer in respect of goods returned or

cancels all or part of previously issued invoice.

8. Debit note. A document sent by a customer to a supplier in respect of goods returned of

an overpayment made. It is a formal request for the supplier to issue credit note