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Recording Financial Transactions Course Slides & Syllabus

Learn essential financial transactions through detailed slides. Cover key areas, contract law, data protection, and practice questions. Enhance your knowledge for computer-based and paper-based exams.

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Recording Financial Transactions Course Slides & Syllabus

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  1. CAT 1 – Recording financial transactions Course slides For computer-based and paper-based exams

  2. Syllabus

  3. Examiner and exam format Time allowed: 2 hours Pass mark: 55%

  4. The BPP Learning Media classroom slides • What do these slides cover? • A selection of key areas of the syllabus • Using the slides • Use the slides as a point of reference • Add detail by talking around the slides (eg using material from the corresponding Study Text chapter) • Consider adding slides yourself to suit your course • Recommend students attempt appropriate questions from the Practice & Revision Kit and from i-Pass

  5. Chapter 1 Study Text Chapter 1 Business transactions and documentation

  6. Sales SALES Goods delivered before payment made Goods paid for immediately CASH SALES CREDIT SALES

  7. Purchases PURCHASES Goods delivered before payment made Goods paid for immediately CASH PURCHASES CREDIT PURCHASES

  8. Invoice ‘G O GET EM AT GOTHAM!!’ W.E. GOTHAM USED CARS Old Iron Gate Street, Wraillings Industrial Estate, Melchett SALES INVOICE No. A576 Date: 10 March 20X8 Item List Price Total £ p £ p Vauxhall Itel 2,500.00 2,500.00 Registration A977 TMF TOTAL 2,500.00 DISCOUNTS Inclusive of DUE PAID BY CHEQUE VAT 2,500.00 To: M Rose Videos 10 The Yard Ilford Esse x Reg Office: Old Iron Gate Street, Wraillings Industrial Estate, Melchett Reg No: 82912 VAT Reg No: 5 439832

  9. Discounts • Trade discounts • Given at time of sale/ purchase • Bulk buying • Settlement discounts • Offered as incentive for early payment • For example 5% if settled within 14 days • May or may not be taken

  10. Sales tax INDIRECT TAX Charge sales tax on sales Suffer sales tax on purchases OUTPUT TAX INPUT TAX

  11. Sales tax and Discounts Sales tax is calculated on the amount after all discounts regardless of whether the discount is taken or not

  12. Contract law • What is a contract? • Legally binding agreement (offer and acceptance) • Consideration • Breach of contract

  13. Implied terms • Goods must • Exist • Match description • Be of satisfactory quality • Seller must have the right to sell

  14. Storage of information • Information stored must be: • Accessible • Secure • What information may be needed by a business? • Who may be entitled to information from a business?

  15. Retention periods • If you think you may need it, keep it • Legal limits for different records • Simple contracts – 6 years • Income and sales tax) records – 6 years • Purchase orders, sales invoices – 6 years • Bank statements – 6 years • Cheque counterfoils – 1 year

  16. Data protection • To protect individuals (data subjects) • Data subjects have rights • Gain access to personal data held • Know why data is held and who has access • Have inaccurate data corrected or deleted • Seek compensation

  17. Question practice – end of Chapter 1 You should now be able to attempt the following question set from the BPP Learning Media Practice and Revision Kit. Business transactions and documentation The material in this chapter is covered in the following BPP Learning Media i-Pass tests. Tests 1 and 2: Business transactions and documentation

  18. Chapter 2 Study Text Chapter 2 Assets, liabilities and the accounting equation

  19. Profit • Income • Expenses

  20. Assets $ $ $ ASSETS Non-current assets Land and buildings 100,000 Plant and machinery 50,000 Motor vehicles 30,000 Fixtures and fittings 20,000 200,000 Current assets Inventories 55,000 Trade receivables 28,000 Cash in hand and at bank 7,00090,000 Total assets290,000

  21. Liabilities $ $ $ Non-current liabilities Bank loans 40,000 Current liabilities Bank overdraft 16,000 Trade payables 40,000 Accruals 4,000 60,000 Total liabilities100,000

  22. The concept of business entity • A business is a separate entity from its owner • Exclude personal transactions

  23. The accounting equation CAPITAL LIABILITIES = ASSETS - + CAPITAL ASSETS = LIABILITIES + Investment - Profit Drawings

  24. Accounts receivable SALE to customer creates ACCOUNT RECEIVABLE (customer owes $) ASSET of the business CASH RECEIPT settles

  25. Accounts payable PURCHASE from supplier creates ACCOUNT PAYABLE (we owe $) LIABILITY of the business CASH PAYMENT settles

  26. General rules D C E L A I D C redits ebits iabilities xpenses ncome ssets rawings apital invested

  27. Question practice – end of Chapter 2 You should now be able to attempt the following question set from the BPP Learning Media Practice and Revision Kit. Assets, liabilities and the accounting equation The material in this chapter is covered in the following BPP Learning Media i-Pass test. Test 5: The accounting equation

  28. Chapter 3 Study Text Chapter 3 Statement of financial position and income statement

  29. Statement of Financial Position & Income Statement Income Statement for y/e 31.12.X7 Statement of financial position – worth of business at a point in time 31.12.X6 31.12.X7 Income statement – trading activities over period

  30. Non-current Assets • Land and buildings • Plant and machinery • Fixtures and fittings • Vehicles

  31. Current Assets • Inventory • Receivables • Prepayments • Bank and Cash

  32. Current Liabilities • Bank overdraft • Trade payables • Accruals

  33. Non-current Liabilities • Bank loans

  34. Capital • Share capital • Reserves

  35. Income Statement • Income • Expenses

  36. Capital v Revenue expenditure Capital expenditure Expenditure on the acquisition of non-current assets or improvement in their earning capacity

  37. Capital v Revenue expenditure Revenue expenditure Trading expenses or the repair/ maintenance of non-current assets

  38. Question practice – end of Chapter 3 You should now be able to attempt the following question set from the BPP Learning Media Practice and Revision Kit. Balance sheet and profit and loss account The material in this chapter is covered in the following BPP Learning Media i-Pass test. Test 4: Classification of expenditure `

  39. Chapter 4 Study Text Chapter 4 Recording, summarising and posting transactions

  40. Source documents Invoice Supplier account Delivery note Source document Customer account Bank statement Payslip Remittance advice

  41. Sales day book credit sales credit purchases Purchase day book Cash book movements in bank account Petty cash book physical cash movements Journal book other information e.g. period end adjustments correction of errors large/unusual transactions Books of prime entry

  42. Sales Day Book Lists all sales made on credit

  43. Purchase Day Book Lists all purchases made on credit

  44. Cash Book • Records receipts and payments into and out of the bank • Often assumed to be two books

  45. Cash Book (receipts)

  46. Cash Book (payments)

  47. General Ledger Example

  48. Ledger Accounts Dr Cr $ $ DEBIT CREDIT TOTAL DEBITS = TOTAL CREDITS

  49. Cash Sales double entry Dr Cash Cr Sales

  50. Cash Purchases double entry Dr Purchases Cr Cash

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