SYLLABUS AND REVISION GUIDANCE

SYLLABUS CONTENT
A TYPES OF BUSINESS TRANSACTION AND DOCUMENTATION

1 Types of business transaction

(a) Understand a range of business transactions including:

(i) sales
(ii) purchases
(iii) receipts
(iv) payments
(v) petty cash
(vi) payroll
(b) Understand the various types of discount including where applicable the effect that
trade discounts have on sales tax.
(c) Describe the processing and security procedures relating to the use of:
(i) cash
(ii) cheques
(iii) credit and debit cards
(iv) debit cards for receipts and payments and electronic payment methods.

2 Types of business documentation

(a) Outline the content of a range of business documents to include but not limited to:
(i) invoice
(ii) credit note
(iii) remittance advice
(b) Prepare the financial documents to be sent to credit customers including:
(i) sales invoices
(ii) credit notes
(iii) statements of account.
(c) Prepare remittance advices to accompany payments to suppliers.
(d) Prepare a petty cash voucher including the sales tax element of an expense when
presented with an inclusive amount.

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3 Process of recording business transactions within the accounting system

(a) Identify the characteristics of accounting data and the sources of accounting data
records, showing understanding of how the accounting data and records meet the
business’ requirements.
(b) Understand how users can locate, display and check accounting data records to meet
user requirements and understand how data entry errors are dealt with.
(c) Outline the tools and techniques used to process accounting transactions and period‐
end routines and consider how errors are identified and dealt with.
(d) Consider the risks to data security, data protection procedures and the storage of
data.
(e) Understand the principles of coding in entering accounting transactions including:
(i) describing the need for a coding system for financial transactions within a
double entry bookkeeping system
(ii) describing the use of a coding system within a filing system.
(f) Code sales invoices, supplier invoices and credit notes ready for entry into the books
of prime entry.
(g) Describe the accounting documents and management reports produced by
computerised accounting systems and understand the link between the accounting
system and other systems in the business.

B DUALITY OF TRANSACTIONS AND THE DOUBLE ENTRY SYSTEM

1 Books of prime entry

(a) Outline the purpose and content of the books of prime entry including their format.
(b) Explain how transactions are entered in the books of prime entry.
(c) Outline how the books of prime entry integrate with the double entry bookkeeping
system.
(d) Enter transactions including the sales tax effect where applicable into the books of
prime entry.

2 Double entry system

(a) Define the accounting equation.

(b) Understand and apply the accounting equation.
(c) Understand how the accounting equation relates to the double entry bookkeeping
system.
(d) Process financial transactions from the books of prime entry into the double entry
bookkeeping system.

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3 The journal

(a) Understand the use of the journal including the reasons for, content and format of
the journal.
(b) Prepare journal entries directly from transactions, books of prime entry as applicable
or to correct errors.

4 Elements of the financial statements

(a) Define and distinguish between the elements of the financial statements.
(b) Identify the content of a statement of financial position and statement of
comprehensive income.

C BANK SYSTEM AND TRANSACTIONS

1 The banking process

(a) Explain the differences between the services offered by banks and banking
institutions.
(b) Describe how the banking clearing system works.
(c) Identify and compare different forms of payment.
(d) Outline the processing and security procedures relating to the use of cash, cheques,
credit cards, debit cards for receipts and payments and electronic payment methods.

2 Documentation

(a) Explain why it is important for an organisation to have a formal document retention
policy.
(b) Identify the different categories of documents that may be stored as part of a
document retention policy.

D PAYROLL

1 Process payroll transactions within the accounting system

(a) Prepare and enter the journal entries in the general ledger to process payroll
transactions including:
(i) calculation of gross wages for employees paid by the hour, paid by output and
salaried workers
(ii) accounting for payroll costs and deductions
(iii) the employer's responsibilities for taxes, state benefit contributions and other
deductions.
(b) Identify the different payment methods in a payroll system, e.g. cash, cheques,
automated payment.
(c) Explain why authorisation of payroll transactions and security of payroll information
is important in an organisation.

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E LEDGER ACCOUNTS

1 Prepare ledger accounts

(a) Enter transactions from the books of prime entry into the ledgers.
(b) Record journal entries in the ledger accounts.
(c) Balance and close off ledger accounts.

F CASH AND BANK

1 Maintaining a cash book

(a) Record transactions within the cashbook, including any sales tax effect where
applicable.
(b) Prepare the total, balance and cross cast cash book columns.
(c) Identify and deal with discrepancies.

2 Maintaining a petty cash book

(a) Enter and analyse petty cash transactions in the petty cash book including any sales
tax effect where applicable.
(b) Balance off the petty cash book using imprest and non imprest systems.
(c) Reconcile the petty cash book with cash in hand.
(d) Prepare and account for petty cash reimbursement.

G SALES AND CREDIT TRANSACTIONS

1 Recording sales

(a) Record sales transactions taking into account:

(i) various types of discount
(ii) sales tax
(iii) the impact of the sales tax ledger account where applicable
(b) Prepare the financial documents to be sent to credit customers.

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2 Customer account balances and control accounts

(a) Understand the purpose of an aged receivable analysis.

(b) Produce statements of account to be sent to credit customers.
(c) Explain the need to deal with discrepancies quickly and professionally.
(d) Prepare the receivables control account or receivables ledgers by accounting for:
(i) sales
(ii) sales returns
(iii) payments from customers including checking the accuracy and validity of
receipts against relevant supporting information
(iv) discounts
(v) irrecoverable debt and allowances for irrecoverable debts including any effect
of sales tax where applicable.

H PURCHASES AND CREDIT TRANSACTIONS

1 Recording purchases

(a) Record purchase transactions taking into account:

(i) various types of discount
(ii) sales tax effect
(iii) the impact of the sales tax ledger account where applicable
(b) Enter supplier invoices and credit notes into the appropriate book of prime entry.

2 Supplier balances and reconciliations

(a) Prepare the payables control account or payables ledgers by accounting for:
(i) purchases
(ii) purchase returns
(iii) payments to suppliers including checking the accuracy and validity of the
payment against relevant supporting information
(iv) discounts

I RECONCILIATION

1 Purpose of control accounts and reconciliation

(a) Describe the purpose of control accounts as a checking devise to aid management
and help identify bookkeeping errors.
(b) Explain why it is important to reconcile control accounts regularly and deal with
discrepancies quickly and professionally.

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