Essay About  Payroll Recording And Source Documents

Assignment on Business Management
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SYNOPSIS
Accounting-Knowledge Level
Prepared by Mohammad Shahidul Islam MBA, ACA
KNOWLEDGE LEVEL, ACCOUNTING
LECTURE-3 & 4, AUGUST 10, 2012
SOURCE DOCUMENTS & BOOKS OF ORIGINAL ENTRIES [CHAPTER-3]
PREPARING BASIC FINANCIAL STATEMENTS [CHAPTER-5]
After studying these Chapters, you shall be
able to understand:
Chapter-3:
 Source documents
 Books of original entries
 Cash book and imprest cash book [MATH]
 Payroll recording [MATH]
Chapter-5:
 Errors in trial balance
 Definition of extended trial balance
 Preparation of extended trial balance [MATH]
LEARNING OBJECTIVES
Previously, several questions came from these
two Chapters.
For exam point of view, from Chapter 3 most
important part is payroll calculation. In
November-December 2011 session a math on
Payroll accounting was set for 9 marks. Short
theory may also come from petty cash book
under imprest system.
From Chapter 5 one most important theory is
errors in trial balance. This theoretical
question has already been set in the
November-December 2011 session.
Preparation of work sheet i.e. Extended Trial
Balance is also important for mathematical
type question.
SYNOPSIS
Accounting-Knowledge Level
Prepared by Mohammad Shahidul Islam MBA, ACA
SOURCE DOCUMENTS & BOOKS OF ORIGINAL ENTRIES
[CHAPTER-3]
Source Documents
Theory [Tricky question]
Source Documents are documents from which first transaction is recorded in the books of accounts of a
Company. Examples of source documents are as under:
 Purchase invoice
 Sales invoice
 Credit note
How these are source documents? To answer this question it requires understanding of purchase / sales
process.
Purchase process/ Sales process:
In the above process only invoices (Purchsase/sales) and credit notes are called source documents,
because, from these documents financial transactions are recorded in the books of original entries.
Suggested Questions:
1. What is source document? Give example of some source document?
2. Why credit note is source document, debit note is not?
3. What information is included in a standard Invoice?
4. What is debit note and credit note? Who prepare these two documents and on whom?
Answer: Credit note: a document issued to a customer relating to returned goods or refunds when a
customer has been overcharged for whatever reason.
Debit note
PO is placed
to the best
bidder
Quotation requested
Purchaser asks for
quotation from vendors
with his specification
Comparative analysis
After receiving
quotations, comparative
analysis is made and
Purchase
order
PO is placed
to the best
Goods Received
Note
GRN is prepared
while receiving
Invoice
After receiving of
GRN, purchaser
receives invoice
Debit note
Goods
returned, If
not as per
Remittance advice
Receiving of payment
advice from supplier
Payment
Settlement after
payment
SYNOPSIS
Accounting-Knowledge Level
Prepared by Mohammad Shahidul Islam MBA, ACA
INVOICE as source document:
[1] Invoice
[2] Preparer: ABC Company Ltd.
63 Dilkusha C/A
Dhaka-1000
[3] Invoice no. 750 [4] Date: 10 June 2012
[5] Receiver: Rahman Ship Breakers
5 Station Road. Comilla
[6] Condition: