CHAPTER 31 Progression Of “Invoices and Credit Notes Received” Through The Daybooks And Ledgers

1. CHAPTER 31 Progression Of “Invoices and Credit Notes Received” Through The Daybooks And Ledgers This presentation acts as a complement to the textbook

2. Progression Of “Invoices and Credit Notes Received” To Daybooks And Ledgers (1) R. Delaney PURCHASES BOOK DATE DETAILS INV. NO. NET VAT TOTAL INVOICE NO. 43 P. POWER 20 MAIN ST. DUBLIN 4 PH. 01 8213876 2/5/11 P POWER 43 10,000 1,000 11,000 7/5/11 G GREENE 54 6,000 600 6,600 16,000 1,600 17,600 TO: JOE BLOGGS 1 MAIN ST LONGFORD 2/5/11 , Assume another Invoice , No. 54, was received from G. Greene on 7/5/11. This is also shown in the Purchases Book QTY DESCRIPTION UNIT PRICE TOTAL 5 TVs. MODEL TV3 €3,000 €15,000 TOTAL EX VAT €15,,000 LESS 33 1/3% TRADE DISCOUNT €5,000 NET €10,000 VAT @ 10% €1,000 TOTAL INCL. VAT €11,000

3. Progression Of “Invoices and Credit Notes Received” To Daybooks And Ledgers (2) R. Delaney PURCHASES RETURNS BOOK DATE DETAILS CR NO. NET VAT TOTAL CREDIT NOTE NO. 4 P. POWER 20 MAIN ST. DUBLIN 4 PH. 01 8213876 6/5/11 P POWER 4 4,000 400 4,400 9/5/11 G GREENE 9 2,000 200 2,200 6,000 600 6,600 TO: JOE BLOGGS 1 MAIN ST LONGFORD 6/5/11 , Assume another Credit Note , No. 9, was received from G. Greene on 9/5/11. This is also shown in the Purchases Returns Book QTY DESCRIPTION UNIT PRICE TOTAL 2 TVs. MODEL TV3 €3,000 €6,000 TOTAL EX VAT €6,000 LESS 33 1/3% TRADE DISCOUNT €2,000 NET €4,000 VAT @ 10% €400 TOTAL INCL. VAT €4,400

4. Progression Of “Invoices and Credit Notes Received” To Daybooks And Ledgers (3) R. Delaney Net VAT Total Net VAT Total 2/5 P. Power Inv. No.4 10,000 1,000 11,000 6/5 P. Power Cr. Nt.4 1,000 100 1,100 Purchases Rts. Book 7/5 G. Green Inv. No.8 6,000 600 6,600 9/5 G. Green Cr. Nt. 9 2,000 200 2,200 3,000 300 3,300 16,000 1,600 17,600 Purchases Book P. Power A/C Goes to Dr. Side because Power is the receiver. 6/5 To Returns 1,100 2/5 By Purchases 11,000 Goes to Cr. Side because Power is the giver. G. Green A/C 9/5 To Returns 2,200 7/5 By Purchases 6,600 Goes to Dr. Side because Green is the receiver. Goes to Cr. Side because Green is the giver. Purchases A/C 31/5 As per P. Book 16,000 Goes to Dr. side as Purchases are an expense. VAT A/C 31/5 As per P. Book 1,600 Goes to the Dr. side as this is an expense. 31/5As per P. Rts. Bk. 300 Goes to Cr. side as this reduces expenses. Purchases Rts. A/c Goes to Cr. side as this reduces expenses. 31/5As per P. Rts. Bk. 3,000

5. Balancing The Ledgers R. Delaney “The Balance” is the difference between the value of the debit entries and the value of the credit entries in a ledger account. It goes on the smaller side to make the totals of both sides equal F F P. Power A/C 6/5 To Returns PRB 1,100 2/5 By Purchases PB 11,000 31/5 Balance c/d 9,900 11,000 11,000 1/6 Balance b/d 9,900 G. Green A/C 7/5 By Purchases PB 6,600 9/5 To Returns PRB 2,200 31/5 Balance c/d 4,400 6,600 6,600 1/6 Balance b/d 4,400 Purchases A/C 31/5 As per P. Bk 16,000 VAT A/C 31/5As per P. Rts. Bk .PRB 300 31/5 As per P.Bk PB 1,600 31/5 Balance c/d 1,300 1,600 1,600 1/6 Balance b/d 1,300 Purchases Rts. A/c 31/5As per P. Rts. Bk. PRB 3,000