Accounting 0452Chapter 2 of 7

Sources and recording of data

Cambridge IGCSE Accounting 0452 Chapter 2 revision notes covering syllabus topic 2, Sources and recording of data, for the 2027, 2028 and 2029 examinations. The chapter teaches section 2.1, the double entry system of book-keeping: why every transaction is recorded twice, the DEAD CLIC rule that fixes the side of each entry, how to prepare a ledger account with date, details and amount columns, how to post transactions to the ledger, how to balance an account using balance carried down and balance brought down, how to present the same account in three-column running balance format with Dr or Cr stated against every balance, how to interpret a debit or a credit balance on a customer account, a supplier account, the bank account, an asset, an expense, an income account and the capital account, how income and expense balances are transferred to the statement of profit or loss at the year end while asset, liability and capital balances are carried down to the statement of financial position, how the ledger is divided into the sales ledger, the purchases ledger and the nominal or general ledger, and how ledger accounts are kept digitally with their benefits and limitations. Section 2.2 covers the eight business documents: the invoice, debit note, credit note, statement of account, cheque counterfoil, paying-in slip, receipt and bank statement, naming who issues each document, who receives it, what it contains, what it is used for and which book of prime entry it feeds, including the direction rule that the buyer sends a debit note and the seller issues the credit note, and the rule that a statement of account is never a source of new entries. Section 2.3 covers the seven books of prime entry and the posting of individual entries and periodic totals, the treatment of trade discount which is never recorded and cash discount which is recorded as discount allowed or discount received, a fully worked three-column cash book with discount, cash and bank columns on both sides, contra entries, the memorandum nature of the discount columns, the dual function of the cash book as both a book of prime entry and the ledger account for cash and bank, the correct column for cash, cheque, debit card, credit card, online and bank transfer payments, the petty cash book with analysis columns and the imprest system worked in two variants, the benefits and limitations of keeping cash at the business property, and the benefits and limitations of manual and digital methods of original entry. Includes a twelve-transaction debit and credit decision drill, a document matching clinic, two fully prepared cash books with every posting listed, an imprest drill, a mistake clinic, multiple-choice retrieval practice with reasons, a Paper 2 style prepare-and-post challenge with a model answer, a mastery checklist and a day 1, day 7, day 30 spaced review plan.Show more

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Revision notes

Interactive notes with exam tips and worked examples.

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Study path

Chapter overview

A summary of this Accounting chapter — open a section to read it. The full notes, worked examples and practice questions are in the study modules above.

Key ideas to remember

Memory anchor. Document → book of prime entry → ledger → balance. Four words, in that order, and every question in topic 2 is asking you where on that line you are standing.

What you need to be able to do

Explain the double entry system and state why total debits always equal total credits.
State the side that increases each of the six account types, using DEAD CLIC.
Prepare a ledger account with date, details and amount columns on both sides.
Post a set of transactions to the correct ledger accounts.
Calculate a ledger account balance: total the larger side, enter balance c/d, rule off, bring the balance down.
Present the same account in three-column running balance format, stating Dr or Cr against every balance.
Interpret a debit or a credit balance on a customer, supplier, bank, asset, expense, income or capital account.
Transfer income and expense balances to the statement of profit or loss, carry asset, liability and capital balances down, and transfer drawings to capital.
Describe the division of the ledger into the sales ledger, the purchases ledger and the nominal (general) ledger, and say what each contains.
Explain how ledger accounts can be kept digitally, with benefits and limitations.
Name the eight business documents and, for each, state who issues it and who receives it.
State what each document contains and how it is used as a source of information.
Explain why a debit note is sent by the buyer and a credit note is issued by the seller.
Explain why the statement of account is never a source of new entries.
Explain that documents may be produced and recorded either manually or digitally.
Name the seven books of prime entry, their source documents, and the individual and total postings from each.
Write up a day book — sales, purchases, sales returns or purchases returns journal — from its source documents, total it, and post the individual entries and the total.
Prepare a general journal entry with a narrative for a non-current asset bought on credit.
Distinguish trade discount, which is never recorded, from cash discount, which is recorded as discount allowed or discount received.
Calculate an invoice total after trade discount and the amount paid after cash discount.
Explain the dual function of the cash book.
Complete a three-column cash book, balance it, identify contra entries and list every posting.
State the correct column for cash, cheque, debit card, credit card, online and bank transfer payments.
Explain the purpose of the imprest system and calculate a reimbursement, including when a refund has been received.
State benefits and limitations of keeping cash at the business property.
State benefits and limitations of manual and of digital methods of original entry.

Common mistakes to avoid

“Trade discount is discount received, so I credit discount received.” Fix Trade discount is deducted on the face of the invoice and is never entered in any account. Only cash discount is recorded. Record the sale and the purchase at the net figure and move on.
“We bought the van on credit, so it goes in the purchases journal.” Fix The purchases journal takes only goods for resale bought on credit. A non-current asset bought on credit is written in the general journal, with a narrative.
“The customer sends the credit note to ask for money back.” Fix The buyer sends a debit note requesting a reduction. The seller issues the credit note, and only that credit note is entered in the returns journals. A debit note on its own changes no account.
“A customer paid by card, so I put it in the cash column.” Fix Only notes and coins go through the cash column. Cheques, debit cards, credit cards, online payments, direct debits, standing orders and bank transfers all pass through the bank column.
“The details column names the account I am writing in.” Fix The details column names the other account in the double entry. “Bank” on the credit side of Uma’s account means Uma paid money into the bank — it does not mean you are in the bank account.
“The statement of account arrived, so I post it to the ledger.” Fix A statement of account is a summary and a reminder. Every item on it has already been recorded from the invoices, credit notes and receipts behind it. It generates no double entry; it is used to check the supplier’s account in the purchases ledger.
“The petty cashier is reimbursed with the imprest amount each period.” Fix The reimbursement is the amount needed to restore the float to the imprest. With no other movements that equals the amount spent — but if cash has been paid in or refunded, it does not. Work from cash in hand, never from habit.
“The cash book is a book of prime entry, so cash and bank accounts are in the nominal ledger too.” Fix The cash book has a dual function: it is a book of prime entry and it is the ledger account for cash and for bank. No separate cash or bank account exists, and the cash book balances go straight to the trial balance.

How Sources and recording of data is examined

Both papers examine all seven topics, every question is compulsory, and all candidates take both papers. There is no tiered entry in this subject and no separate route: the whole syllabus is examined for everybody, and every candidate is eligible for the full range of grades from A* to G. Across the whole qualification the assessment objectives weigh AO1 66%, AO2 24% and AO3 10%, so accurate knowledge and accurate procedure carry two-thirds of the marks available.
Multiple-choice items on this topic are single-step and decisive. Typical demands:
name the account to be debited and the account to be credited for one stated transaction;
identify the document a party issues or receives, or the book of prime entry it feeds;
calculate a net invoice amount after trade discount, or the amount received after cash discount;
calculate a petty cash reimbursement or the cash in hand under an imprest system;

Syllabus reference and sources

Written against: Cambridge IGCSE Accounting (0452). Syllabus for 2027, 2028 and 2029 (version 1). Chapter 02: Sources and recording of data.

Written by: Academiq Edu Instructor Panel

Source documents

Cambridge IGCSE Accounting (0452), Syllabus for 2027, 2028 and 2029 (version 1)

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