The bookkeeping cycle: from receipt to trial balance
Every transaction takes the same path: a document, a book of prime entry, the ledger, the balances, then the trial balance.
Task 1Five steps, always in this order2 questions
Every transaction follows the same path through the books. Each step uses the one before it.
- Source document: the invoice, receipt or statement that proves it happened
- Book of prime entry: where it is first written, such as a day book or the cash book
- Ledger accounts: where the double entry is made
- Balancing: each account is added up and its balance found
- Trial balance: every balance listed in two columns
Task 2One week of invoices2 questions
You work out a figure and pick the right answer.
Task 3Why not post straight to the ledger2 questions
You pick the right answer and find the mistake in a table.