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Paper One 1-2-3

Accounting records and classifies business transactions. Business exists to make a profit. Transactions occur when property moves from one party to another through cash, credit, or mixed transactions. Documentation of external and internal business transactions includes purchase orders, invoices, receipts, and other records. Proper documentation and record keeping are important for accounting and running a business.

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0% found this document useful (0 votes)
281 views10 pages

Paper One 1-2-3

Accounting records and classifies business transactions. Business exists to make a profit. Transactions occur when property moves from one party to another through cash, credit, or mixed transactions. Documentation of external and internal business transactions includes purchase orders, invoices, receipts, and other records. Proper documentation and record keeping are important for accounting and running a business.

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Accounting: is a system of recording classifying summarizing and

presending all the transaction.


Business: is a legal organization which exist to make profit
Note: when business transactions happen that property changes hand from
one hand to other hand.

Business Transaction documentation

Purchase Sales
MIX WAY TRANSACTON

CASH.T CREDIT.T

Note payable Account payable

1. Cash transaction: when you buy the goods and on same time you
pay the money is called cash transaction.
2. Mix way transaction: this one include both cash and credit
transaction
EX: I bought a car $2000 but I bay $1000 so this is mix way transitions.
3. Credit transaction: when you bay the goods and after a week after
a month you pay the money is called credit transactions.
 Note payable: that to have a document of the goods that you
bought.
 Account payable: but this one is not having any need for
document orally you tell.
The deference between cash transaction and credit transaction is just
in time.

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Business documentation
External documentation internal documentation
(For customer) (For supplier)
Sealer or company Purchase or organization
Enquiry
Visit
Quotation
Acceptance
Acknowledgment
Delivery note
Invoice
Payment

Salary: it’s given for specific time.


Wages: it’s given after done work.
Good receivable: when you get the goods inside good they will also send
good receivable note.
Delivery note: when you done the work and sign it that is delivery note.
Inventory list: is a list which will be with stock per
Inventory: the goods which we resale it that is inventory.
Material: the goods that we use it that is material.
Staff schedule: is a schedule which shows us how many staff we have what
are their jobs what are they doing.
Purchase order: is a paper which all the things that we want they are exist
on purchase order.
Supply list: is a list which will give us information about supplier that from
where can take the other needs goods.
Delivery note sample: is a evidence for company that job has been
completed.
Invoice and credit note
Invoice: is a demand for money it is use by both sales and purchase. It sends
from sealer to purchase for payment.

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And the following thins are used in invoice.
1. Sealer Name
2. Purchase Name
3. Date and Time
4. Invoice #
5. Delivery Address
6. Description of Goods
7. Unites & Number
8. Unite Price
9. Total Ground
C O D: (Cash on delivery)
It means when goods delivery you should pay money on same time.
F O B: (free on board)
If my invoice is covering fob so on that time all expense of goods like tax
shipping are belongs to company
EX WORK:
E & OE: (error & omission expected)
If our invoice is covering (E & OE) so on that time if any mistake done in
invoice. We can claim on supplier but if it wasn’t covering (E &OE) we
can’t
Invoice copy should be send
1. to purchaser as a that receipt that (I received all goods )
2. To purchaser as a delivery note. Just we sign it and again we back
send to sealer.
3. To purchaser as an advice note. We keep with our self as a
document to check the materials physically.
Deference between delivery note and advice note:
1. Delivery note: the sealer sends it to purchaser to confirm that I
received the goods and it’s like evidence for company.
2. Advice note: it should be kept with stock per to check the goods
physically.
Receivable goods note:
Is a note which is send by supplier to purchaser inside the goods.
Sales order:
Is letters which send from sealer to purchaser.

3
Sealer order copies
To purchaser. For purpose of confirmation.
Where house stock. To check that do we have the goods.
Sealer department. To record in sales department.
To account department. To make an invoice for goods
With goods. As delivery note advice note

Purchase order: is a letter which send from purchaser to sealer for


demanding.
For sealer: as a demand
Purchase order copies purchasing department: to keep in purchase D
To account department: for payment

Credit note: is a particular note which is send by sealer to purchaser


to cancel the part or all of previous invoice.
Debit note: is a request for credit note this one send from purchaser to
sealer.
Note: when some problems happen in our invoice in case of money. So
we can send a debit note for sealer that they should send a credit note for
us to cancel the previous invoice.
Discount: reducing of money from actual price is called discount
1- Trade discount 2- cash discount
Reducing the actual price of something to customer for purpose of
1. If the customer is baying a bulk.
2. If the customer is fellow trader.
3. If the customer is our old climate.
4. If its for trend custom that each person give the discount also
your give us well
EX: Price in bazaar of computer 40.

2- Cash discount
Is depending to finance policy of company. Or simply we sate the goods
by cash but also we have a discount for them.
Price 40
Discount 35 because I need cash

Perform invoice: is an invoice which will send before goods received.


And usually used in overseen trade that we bring goods from other
country.

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E- Commerce: purchasing or trading through internet is called E
commerce.
Sales tax: is a tax which is imposed to the sales of price at the time of
purchase.
Taxation
Taxation: which is imposed at the incoming of individual organization.
Tax: to generate the income of government.

Taxation

Directly Indirectly

Income tax Property tax Custom tax Sales tax

Moveable Output tax

Non moveable Input tax

Income tax: is a tax which is imposed to the income of individual


organization.
Property tax: is a tax which is imposed to property of individual
organization. Like tax of house, apartment, and car.
Custom tax: is a tax which is imposed to importation and exportation of
individual organization. To import or export goods we give tax of that.
Sales tax: is a tax which is imposed to the sales price at the time of
purchase.
Moveable: is like car bicycle etc.
Non moveable: is like house and apartment and etc.
Output tax: is a sales tax which shopkeeper gives to government.
Input tax: is a sales tax which customer pay.
Purchase= $1000
Sales tax= $10%
Output tax=
Output – input tax equal should be given to government as a tax.

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Contract law
Is a law like legal agreement at the time of sales and purchase? In each
transaction there must be a contract law.

Contract law
1. Offer.
2. Acceptance just shows agreement between seller
and purchaser.
3. Consideration. Is a mount of money in exchange of goods or visa
versa of this.

Implied contract: this kind of contract is base on our behavior. That


with out anything we take the goods. In shop.

Strong of data
1. Recording the past and present transaction(financial)
We record the past and present transaction as a proof fro our company.

2. Information about past and current operation.


Simply means planning how? That fro example in winter my company
is not working well than summer. So now I should make plan to
decrease the staff or shop some machines.

3. Routine transaction: is managing the current operation that


how much machines need fro this production.

4. Performance information: this kind of information is used for


motivation of staffs and it’s in two ways.

1. Financial: that we give bonus fro staff.

2. Non financial: that we give lunch or vocation for staffs.

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Those parties who are in trusted as follow

If the business is success full well.

External Internal

Owner = the title of company is belongs to owner. Manager

Employer
Investor= who pay money and share the profit with owner.

Creditors= who pay or give money and from money they take in test

Government = to take the tax very well.

Customer = to use from which famous company.

(Memo) or Note
Manager: Authorized and responsible person for operation of
organization is called manager.

Manager: is a conceptual worker.

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Sales of good Act (law)
1. Must be in existence: it must be physically existing when we
sale anything.

2. Market price: if the cast is not determine (cost price) at the


beginning. So we should go to market price.

3. Performance: when the days are determine that whiten 3 days you
pay the money you should pay it.

Data Relention policy


It means that how long we keep the data whether we keep it for one year,
one week or one month.
We can keep data in two ways

1. Permanent data: which keep for ever? Which are necessary?


2. Temporary data: which deep fro a while.

USE OF DATA
In two way
1. Active file: those files which uses every day.
2. Non Active file: those file which uses very less ( once in a
year, twice in year)
Active file and permanent data: are keep for ever.
But non active file and temporary data are keeping for a while for a
short time.

(( data protection policy))


Each organization has date so it should be kept protect from each use.

1. Data collector: the person who collect the data is called


(D.C)
2. Data controller: to control and protect the data is called
data controller.

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3. Sensitive information: is formation is regarding Race,
Religion, Gender, Nationality of data.
Bussness
Business invests money in resource in order to make even more
money fro its owner.
Business has made of 3 things

Business

Assets Liabilities Capital

Tangible Un-tangible Internal-liabilities One person

Non-current
Two Gays
Eternal-liabilities More than two
persons
Current Assets Current-
liabilities

Non-current liabilities

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.
Assets: it means what the business own or has.
Liabilities: it means what the business owes or barrow.
Capital: it means the invested a mount.
Sensitive file: are those files which should be not tell to anyone.
Internal liabilities: it means what the owner of company owed to company.
External liabilities: what the bank owed to company is external liabilities.
Current liabilities: that is pay in short time.
Non-current assets: that is not pay in short time it’s paid in long time.
Fixed or non-current assets: the things which are not for sale they keep whit
us for long terms. Like marchers building.
Current assets: the thing that we sale it in a short time. Like, disk, company,
shoes, and pen.
Capital: the real investment of invest at beginning is called capital.
1. if the investment is down by one person is called (sale proprietor )
2. If the investment is down by two person that is partner investment.
3. It the investment is down by more than two persons is called share holder.

A/C receivable: it means that fro example I give money for Ahmad, so
Ahmad write this money is A/C payable
A/C payable: it is for me that I write the money that I gave to Ahmad in
my A/C payable.
Note receivable: this similar to A/C receivable but not in short time for
long time. More than 6 years.
Not payable: same as to A/C payable but in long term. Not soon.

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