A few things confusing me

Soliloquy

Will just post the main ones now, am cramming before an exam, thanks.
I may have found mistakes in the materials.

If our business makes a purchase and then immediately pays by either BACS, CHAPS or FASTER payment, would only the faster payment be entered as a cash payment in the cash book? The same would apply regarding a sale? As far as I know CHAPS goes through on the same day, FASTER takes seconds, BACS takes a few days and they are all protocols that can be used by direct debit, standing orders, debit and credit cards alike.

Secondly, what if a business owing us money ceases training, we know they won't pay us back, but it's only been a couple months that they have owed it to us. As we write their debt off in the RLCA and subsidiary ledgers, do we also record the vat now? Or make a journal entry to do it once we hit the 6 month mark?? I would have no idea in an exam what to do with the VAT..

anony123

I think I may be able to help you on the second part, I am unsure what you want for the first answer. I’m pretty sure my teacher said to write the debt off straight away as they will not be able to repay it.

So you need to DR irrecoverable debt DR VAT and CR SLCA
However, say in the future like a year down they are able to pay it off then DR SLCA CR VAT and CR SLCA, and yes the VAT will need to be included:

anony123

Chaps, debit cards and all of them go straight from the bank. The only delayed ones are a cheque (3-5 days) and credit card. These take longer to clear the bank. The faster payment does still need to be recorded like every other payment as a credit on the cash book. All of the payments need to be recorded in the cash book, as when totalling up the trial balance would need to balance out.

If that hasn’t answered your question please do ask, I assume you are doing bookkeeping transactions if I can remember that long back.

Soliloquy

Chaps is same day, but could take several hours to process, so was unsure if that is considered immediate enough to be considered as a "cash" payment, rather than credit. Bacs can take several days too like a cheque.



Got an exam in a couple hours, I know i'm too late but thought I'd try, as my tutor isnt helping.




We have been taught about the wage control account, but then one of the questions in the practice assessment shows completely different ledger accounts that have seemingly replaced the control account. I have tried to use logic, but can't wrap my head around the answer??

PAYE and NI ledgers seem to have placed the HMRC ledger, so it makes sense that they are credit (liability) entries.

Gross wages and employers NI ledgers seem to have replaced the wages expense ledger, so I understand why they are debits, although they could have just as easily been credit entries and the wage expense account a debit entry that just isnt seen here... although maybe I should assume the whole system of ledgers being used to deal with the payroll must be shown.

What really throws me off though is that the net wages account is a credit entry, I suppose it must be to balance the journal entries, but I could have logically assumed other debit/credits. The net wages should be a credit in the bank ledger... this means the net wages ledger should be a debit entry!? Unless this is a temporary ledger, just to hold the money which we then credit when we want to pay it into the bank account before crediting the bank account again. But why?? It's just confusing.

Thanks!

Also, I just noticed there is no accounting stack exchange.. so strange.

anony123

I remember this, the chaos is immediately you don’t need to know anything else. There are double entries in my book that I got BPP. These are simply memory.

anony123

How was your exam?