I n t e r a c t I v e t e X t foundations in Accountancy/ acca financial accounting (ffa/FA) bpp learning Media is an acca approved Content Provider

PART B: THE QUALITATIVE CHARACTERISTICS OF FINANCIAL INFORMATION 

 

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The use of double-entry and 

accounting systems

part

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PART C: THE USE OF DOUBLE-ENTRY AND ACCOUNTING SYSTEMS 

 

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C H A P T E R 

 

 

TOPIC LIST 

SYLLABUS 

REFERENCE 

1  The role of source documents 

C1(a),(b),(f)

2  The need for books of prime entry 

C2(a)

3  Sales and purchase day books 

C2(a), D1(b)

4 Cash 

book 

C2(a)

5 Petty 

cash 

D2(b)

 

Sources, records and 

books of prime entry

From your studies of the first three chapters you should have grasped 

some important points about the nature and purpose of accounting.  

 

Most organisations provide products and services in the hope of 

making a profit for their owners, by receiving payment in money 

for those goods and services. 

 

The role of the accounting system is to record these monetary 

effects and create information about them. 

You should also, by now, understand the basic principles underlying the 

statement of financial position and statement of profit or loss. 

We now turn our attention to the process by which a business 

transaction works its way through to the financial statements. 

It is usual to record a business transaction on a document. Such 

documents include invoices, orders, credit notes and goods received 

notes, all of which will be discussed in Section 1 of this chapter. In 

terms of the accounting system these are known as source documents. 

The information on them is processed by the system by, for example, 

aggregating (adding together) or classifying. 

Records of source documents are kept in 'books of prime entry' which, 

as the name suggests, is the first stage at which a business transaction 

enters the accounting system. The various types of books of prime entry 

are discussed in Sections 2 to 4 and petty cash is considered briefly in 

Section 5.  

In the next chapter we consider what happens to transactions after the 

books of prime entry stage. 

 

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