Retail Accounting and Financial Transactions
What the domain covers
This domain tests basic retail bookkeeping: cash book, petty cash, invoices, credit sales, receivables, daily sales summaries, reconciliation, gross profit and markdowns.
Core rules and concepts
- Cash book: records cash receipts and payments; keep business cash separate from personal money.
- Petty cash: small expenses such as cleaning or local transport, supported by vouchers.
- Credit sale: goods supplied now, payment later; record the customer, amount and due date.
- Daily sales summary: total sales by payment mode, discounts, returns and expenses.
- Reconciliation: opening cash + cash sales − cash expenses − bank deposits = expected closing cash.
- Gross profit: sales revenue − cost of goods sold. Markdown reduces selling price and can reduce margin.
Worked example
Opening cash is ₹2,000. Cash sales are ₹8,500. Cash expenses are ₹500. The owner deposits ₹7,000 in the bank. Expected closing cash = 2,000 + 8,500 − 500 − 7,000 = ₹3,000. Actual cash counted is ₹2,900. There is a ₹100 shortage. Check vouchers, change given, returns and any unrecorded expense before treating it as theft or error.
Traps that cost marks
Mixing personal and shop cash; recording credit sales as immediate cash; ignoring petty cash vouchers; treating turnover as profit; failing to reconcile daily; forgetting returns and markdowns in the sales summary.