Page 8 Chapter 1

CHAPTER 1
Accounting Roles and Transactions

Chapter Summary

 A bookkeeper records the financial transactions of a business in day
books, while an accountant presents and interprets this data.

 A bookkeeper records transactions in day books and a cash book (which
are books of prime entry) from prime documents.

 The data from the books of prime entry is used to produce financial
statements such as a profit and loss statement and a balance sheet.

 There are three main types of business organisation: sole traders,
partnerships and limited companies.

 Businesses have structures according to size and type. The three main
structures are hierarchical, tall and flat. The structure may be organised
according to function, region or product.

 All businesses have to record similar transactions. Businesses will record
sales, purchases and bank transactions.

 It is a legal requirement that documents are retained for specific periods
of time. All businesses should have a policy on document retention.

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