BTEC Level 3 Business Studies. Unit 10: Recording Financial Transactions

Accounting concepts - The accepted norms and expectations in accounting.

Audits - Examinations of financial statements, usually conducted annually.

BACS - Banker's Automated Clearing System Balance brought down - The balance at the beginning of a new period that was carried down from the previous.

Balance carried down - The balance at the end of a period that is the balance brought down in the next.

Bank transactions - Methods of payments when a customer instructs their bank to transfer payment to a recipient.

Bookkeeping - The process of recording the financial transactions of a business Books of original entry - The books or journals in which a company initially records all of its business transactions.

Cash book - Records of all transactions made by a business in cash.

Cash receipt - A printed record of payment for goods and services using cash or equivalent.

Cash transactions - Payments made at the same time as goods are received.

Cheque - A small document that contains a written instruction for a bank to take money out of a person or business' bank account and transfer it to the bank of the person or business the cheque is written to.

Credit cards - Plastic cards issued by banks that customers can use to pay for goods and services. Each payment increases the balance owed and interest is paid.

Credit note - A document used to amend any mistakes made in invoices.

Credit transactions - Purchases when payment is made after the receipt of goods and services.

Credits - Items recorded on the right hand side of the ledger.

Day books - A book where an accountant records all transactions in the order in which they occur.

Debit cards - Plastic cards issued by banks for customers to use to pay for goods and services where the money is taken straight from the account.

Debit note - A document sent from a supplier to a buyer to inform them of their current debt obligations.

Debits - Items recorded on the left hand side of a ledger.

Delivery note - A document that is presented to a buyer when goods are received.

Direct debit - An agreement to allow an individual's or business's bank to make regular payments directly to a business to pay bills.

Double entry bookkeeping - A method of recording financial transactions where each transaction has to be recorded twice.

Financial record keeping - Recording financial transactions of a business.

General journals - They are used to record transactions not recorded in the other daybooks.

General ledger - A log of all financial transactions made by a company over a specified trading period.

Goods received note - A document confirming that the customer has received the goods.

Internet banking - Transactions and banking services that are carried out over the internet.

Invoice - A document presented by a supplier to a customer to request payment.

Legal obligations - Government requirements for businesses to record certain financial data depending on the business type.

Online security implications - The need to protect money and personal data from hackers.

Professional responsibility - A set of duties and moral responsibilities expected to be displayed by people in a profession.

Purchase ledger - A log of all purchases made from a supplier.

Purchase order - A document created by a business when they want to buy goods or services.

Purchase returns day book - It is used to record all returns that a business makes to a supplier that has been bought on credit.

Purchases day book - It is used to record all purchases made throughout the day in the operations of a business.

Remittance advice - A short letter from the customer to the supplier to confirm that payment has been made

Reputation - The image of a business that can be caused by exposure of financial inaccuracies.

Risk of fraud - The chance of people misusing financial information for their own benefit.

Sales day book - A manual ledger used to record credit sales to customers.

Sales ledger - A log of all sales made by a business.

Sales returns day book - A recording of any details of good returned or orders cancelled by customers.

Security implications - Actions a business needs to take to protect data collected in the process of making and receiving payments.

Source documents - Original documents that contain the details of business transactions.

Stakeholder confidence - The level of certainty that stakeholders have in the financial security of a business.

Statement of account - A document issued by a supplier which details all transactions with a customer in a specified time period.

T account - An informal term for financial records that employ double-entry accounting.

Tax liability - The responsibility of businesses to make payments to the governments based on accurate calculations of their profits.

The trial balance - A report that records all of the closing balances of the general ledger accounts of a business at a point in time.

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