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

2  Ledger accounts, books of prime entry and journals 

 

 

 

(a)  Identify the main types of ledger accounts and books of prime 

entry, and understand their nature and function. 

K 

 

 

D  Recording transactions and events 

 

 

 

1 Sales 

and 

purchases 

 

 

 

(b)  Understand and record sales and purchase returns. 

S 

 

 2 

Cash 

 

 

 

(b)  Understand the need for a record of petty cash transactions. 

K 

 

 

 

 

 

 

1

   The role of source documents 

Business transactions are recorded on source documents. Examples include sales and purchase orders, 

invoices and credit notes.  

1.1 Types of source documents 

Whenever a business transaction takes place, involving sales or purchases, receiving or paying money, 

or owing or being owed money, it is usual for the transaction to be recorded on a document. These 

documents are the source of all the information recorded by a business. 

Documents used to record the business transactions in the 'books of account' of the business include  

the following. 

(a) 

Quotation. A document sent to a customer by a company stating the fixed price that would be 

charged to produce or deliver goods or services. Quotations tend to be used when businesses do 

not have a standard listing of prices for products, for example when the time, materials and skills 

required for each job vary according to the customer's needs. Quotations can't be changed once 

they have been accepted by the customer.  

(b) 

Purchase order. A document of the company that details goods or services which the company 

wishes to purchase from another company. Two copies of a purchase order are often made, one 

is sent to the company from which the goods or services will be purchased, and the other is kept 

internally so the company can keep track of its orders. Purchase orders are often sequentially 

numbered. 

BPP Tutor Toolkit Copy

---

CHAPTER 4  

//

  SOURCES, RECORDS AND BOOKS OF PRIME ENTRY