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Chapter 3
Recording transactions and balancing
the ledgers
6.1 Recording cash and credit transactions
Cash transactions are those where payment is made or received
immediately, whether that payment made by notes and coin, debit or
credit card or cheque is irrelevant.
Credit transactions are those where goods are sold or purchased and
paid for at a later date. Most commonly these transactions are
eventually paid using electronic payment methods directly into the bank
account.
Money that a business entity is owed is accounted for in the receivables’ ledger.
Money that a business entity owes is accounted for in the payables’ ledger.
Tutor notes guidance – discussion points
Having asked students to identify the ledger accounts required to record the
double–entry in TYU 2 in chapter 4, now record the transactions in ledger
accounts.
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