written by Rustam Fayzullayev
flowchart TD
A["1. Source documents<br>invoices, receipts"] -- "classified and recorded in" --> B["2. Books of original entry<br>day books"]
B -- "posted to" --> C["3. Ledgers<br>debits and credits"]
C -- "checked by" --> D["4. Trial balance<br>checks the arithmetic"]
D --> E["5. Profit and loss account<br>performance"]
D --> F["6. Balance sheet<br>financial position"]
<aside> 💡
The accounting cycle is the whole process, from source documents to the preparation of the financial statements.
</aside>
Rus: Учётный цикл – весь процесс от первичных документов до составления финансовой отчётности.
<aside> 💡
The objectivity concept requires every transaction to be recorded using verifiable, unbiased evidence, not personal opinions or estimates.
</aside>
Rus: Принцип объективности – операции записываются на основе проверяемых доказательств, а не личного мнения.
That evidence comes from source documents.
flowchart LR
B["BUYER"] -- "1. Purchase order" --> S["SELLER"]
S -- "2. Delivery note + goods" --> B
B -. "3. Goods received note (kept)" .-> B
S -- "4. Invoice" --> B
B -- "5. Debit note (goods returned)" --> S
S -- "6. Credit note" --> B
S -- "7. Statement" --> B
B -- "8. Remittance advice + payment" --> S
S -- "9. Receipt" --> B
<aside> 💡
Source documents provide the evidence and details of business transactions.
</aside>
Rus: Первичные документы – доказательства хозяйственных операций (счёт-фактура, квитанция, кредит-нота и др.).
| Document | Issued by | Purpose |
|---|---|---|
| Purchase order | Buyer | A request to the supplier for goods, with quantity, price and terms |
| Sales order | Seller | Records the customer's order; checked against their purchase order and sent to the warehouse |
| Delivery (dispatch) note | Seller | Goes with the goods; the customer uses it as a checklist |
| Goods received note (GRN) | Buyer | Proof the goods arrived; matched with the delivery note and purchase order |
| Invoice | Seller | A request for payment. A sales invoice for the seller, a purchase invoice for the buyer |
| Debit note | Buyer | Details of goods the buyer is returning |
| Credit note | Seller | Confirms the returned goods and reduces what the buyer owes |
| Statement | Seller | A summary of invoices, payments, refunds and the amount still owing |
| Remittance advice | Buyer | Tells the seller that an invoice has been paid |
| Cheque | Buyer | Authorises the bank to pay funds from the buyer's account |
| Receipt | Seller | Confirms that payment has been received |