Accounting

1. Rreconciling the bank statement:

A company's general ledger account Cash contains a record of the transactions (checks written, receipts from customers, etc.) that involve its checking account. he !ank also creates a record of the company's checking account when it processes the company's checks, deposits, service charges, and other items. "oon after each month ends the !ank usually mails a bank statement to the company. he !ank statement lists the activity in the !ank account during the recent month as well as the !alance in the !ank account. #hen the company receives its !ank statement, the company should verify that the amounts on the !ank statement are consistent or compati!le with the amounts in the company's Cash account in its general ledger and vice versa. his process of confirming the amounts is referred to as reconciling the bank statement, bank statement reconciliation, bank reconciliation, or doing a "bank rec." he !enefit of reconciling the !ank statement is knowing that the amount of Cash reported !y the company (company's !ooks) is consistent with the amount of cash shown in the !ank's records. $ecause most companies write hundreds of checks each month and make many deposits, reconciling the amounts on the company's !ooks with the amounts on the !ank statement can !e time consuming. he process is complicated !ecause some items appear in the company's Cash account in one month, !ut appear on the !ank statement in a different month. %or e&ample, checks written near the end of August are deducted immediately on the company's !ooks, !ut those checks will likely clear the !ank account in early "eptem!er. "ometimes the !ank decreases the company's !ank account without informing the company of the amount. %or e&ample, a !ank service charge might !e deducted on the !ank statement on August '1, !ut the company will not learn of the amount until the company receives the !ank statement in early "eptem!er. %rom these two e&amples, you can understand why there will likely !e a difference in the balance on the bank statement vs. the balance in the Cash account on the company's books. (t is also possi!le (perhaps likely) that neither !alance is the true !alance. $oth !alances may need ad)ustment in order to report the true amount of cash. After you ad)ust the balance per bank to !e the true !alance and after you ad)ust the balance per books to also !e the same true !alance, you have reconciled the !ank statement. *ost accountants would simply say that you have done the !ank reconciliation or the !ank rec. Asset - +,-./0123, 43567, 891+27 Owe : ;71< 63=>57, Liabilities : 63=?+, 6/5/>57/ 3;@A81/=<0128, A863=>/55301< Vendor B CD3682/E Compile B (kempail) 03;+D81<, 5898C=+281< (mplementation : 27C3=5/5+/, +0C3=5/5+/, 30-./012=/5+/, D/8=+A8E+@ F. Accounts Payable B 58G+0=/5+@ (63=?) Accounts paya!le are de!ts that must !e paid off within a given period of time in order to avoid default. (t is a file or account that contains money that a person or company owes to suppliers, !ut has not paid yet (a form of de!t), sometimes referred as trade paya!le. #hen an invoice is received, it is added to the file, and then removed when it is paid. hus, the A/P is a form of credit that suppliers offer to their purchasers !y allowing them to pay for a product or service after it has already !een received. '. Accounts Receivable B C=81/>, 3C=818 (CD+;7=<) *oney owed !y customers (individuals or corporations) to another entity in e&change for goods or services that have !een delivered or used, !ut not yet paid for. Heceiva!les usually come in the form of operating lines of credit and are usually due within a relatively short time period, ranging from a few days to a year.

In a pu!lic company's !alance sheet, accounts receiva!le is often recorded as an asset !ecause this represents a legal o!ligation for the customer to remit cash for its short:term de!ts. (f a company has receiva!les, this means it has made a sale !ut has yet to collect the money from the purchaser. J. An invoice or bill is a commercial document issued !y a seller to the !uyer, indicating the products, Kuantities, and agreed prices for products or services the seller has provided the !uyer. An invoice indicates the !uyer must pay the seller, according to the payment terms. he !uyer has a ma&imum amount of days to pay these goods and are sometimes offered a discount if paid !efore. (n the rental industry, an invoice must include a specific reference to the duration of the time !eing !illed, so rather than Kuantity, price and discount the invoicing amount is !ased on Kuantity, price, discount and duration. Lenerally speaking each line of a rental invoice will refer to the actual hours, days, weeks, months etc !eing !illed. %rom the point of view of a seller, an invoice is a sales invoice. %rom the point of view of a !uyer, an invoice is a purchase invoice. he document indicates the !uyer and seller, !ut the term invoice indicates money is owed or owing. (n Mnglish, the conte&t of the term invoice is usually used to clarify its meaning, such as N#e sent them an invoiceN (they owe us money) or N#e received an invoice from themN (we owe them money). O. What Is Post ated !he"ue# (t is a cheKue with a date written on it after the date it was given to you and it cannot !e cashed !efore that date. P. $%& che"ues : A non:negotia!le %und cheKues. A cheKue is considered non:negotia!le for the following reasons( 5/ ,3?-1 ;71< 3;58=+G/57) : Qayment stoppedR : #rong account num!erR : (nconsistency !etween written and figure amountR : "ignature irregularR : Account closedStransferredR :(nsufficient funds. T. "hort '() *+,-.- /*/0)123 or non-payment is theft4 54 A6 here are J designations that are highly sought after !y students and recogniUed !y employers: : CA: Chartered Accountant : CQA: Certified Qu!lic Accountant : CLA: Certified Leneral Accountant : C*A: Certified *anagement Accountants

%tory
They maintain complete sets of financial records, keep track of accounts and verify the accuracy of procedures used for recording financial transactions. As a bookkeeper, you perform a variety of duties. You prepare, control, balance and check various accounts using standard bookkeeping methods. You enter daily financial transactions in a journal either manually or by computer. You maintain general ledgers recording the status of various accounts and make sure that all the accounts balance. You also balance the ledgers and prepare financial statements. To verify the accuracy of computerized and manual accounting and record-keeping systems, you may be asked to perform an audit. You may also prepare statistical, financial, accounting or auditing reports.

M&plain !illing invoices and accounting policies to staff, vendors and clients. hese tasks could include )ournal entries, ledger confirmations and !ank reconciliations.

%kill in6 'at entry3

*aintaining accurate financial records and preparing clear and accurate reports for informational, auditing and operational useR Heconciling accounts, records, reports and )ournalsR Qreparing financial andSor auditor statements, schedules and reportsR (nterpreting, applying and e&plaining comple& laws, codes, regulations and ordinancesR Heviewing and verifying accuracy of dataR *aintaining accounting records for special accounts and pro)ectsR *aking sound, independent )udgments within esta!lished polices and proceduresR IrganiUing own work, setting priorities and meeting critical deadlinesR and Communication to interact effectively with co:workers, managers, su!ordinates and the general pu!lic sufficient to convey information and to receive work direction.

7ake 8ournal 9ntries

Accounting assistants record an organiUation's !usiness activities !y making )ournal entries in su!: or general ledgers. Mntering items in a )ournal means crediting or de!iting an account. here are five types of accounts: e&pense, revenue, asset, lia!ility and shareholders' eKuity. M&penses are charges incurred. Hevenues reflect sales and commissions. Assets indicate what a !usiness entity owns, and lia!ilities, what it owes. "hareholders' eKuity represents amounts invested !y company owners.

Veri:y 8ournal and Ledger ;alances

Vournal and ledgers are accounting records. $ookkeepers enter financial data into )ournals !y making )ournal entries. "uch information is then summariUed in su!: and general ledgers. A su!:ledger is a section of a general ledger. %or e&ample, Client WXY's su!:ledger is part of a !usiness customers' general ledger. Accounting staff verify that !alances are accurate !y checking )ournal entries, vendor !ills and customer invoices.

Reconcile ;ank %tatements

Accounting clerks also perform !ank reconciliation duties. A !usiness entity may have several accounts with a variety of institutions. Heconciling !ank statements ensures that clerks can verify an organiUation's cash !alance, and that such !alance agrees to internal cash ledgers. hese employees perform reconciliations on a monthly !asis, and follow up on differences with !ank staff.

%upport 7onthly !lose

Accounting assistants work under the guidance of senior professionals to perform month:end procedures. "uch procedures could include reconciling !ank statement !alances to cash ledgers, making )ournal entries to ad)ust unpaid !ills or correcting prepaid e&pense amounts. Qrepaid e&penses are those that an organiUation pays prior to receiving goods or services. M&amples of such e&penses are annual insurance premiums or semi:annual rents. Znpaid !ills could !e salaries due at month:end !ut paya!le five days into the following month.

%upport Audit Procedures

Accounting clerks also may assist internal and e&ternal auditors !y providing reKuired data and confirming ledger !alances. hey work under the leadership of senior staff to ensure that internal policies, guidelines and procedures in )ournal entry, warehouse, inventory shipment and receiving departments are adeKuate and operating effectively. hese employees may also perform administrative duties for internal or e&ternal auditors. Compute a&es Accounting clerks also could compute a !usiness entity's ta& lia!ilities. hey may work in the ta& department or in the finance department under the guidance of professionals. hey also could evaluate and analyUe sales ta&es collected from customers, and ensure that such ta&es are transferred to state and local revenue services.

Assistant Accountants assist in the day:to:day running of the Accounts Iffice. hey help the [ey Assistant Accountant and Qroduction Accountant to maintain records of invoices and creditors' payments. hey keep records of all transactions, and are usually responsi!le for the preparation of accounts paya!le, invoices and purchase orders, and petty cash and payroll calculation. Assistant Accountants also process cheKues, maintain filing and invoice monitoring systems, and audit petty cash envelopes : as well as carrying out other duties assigned !y the Qroduction Accountant. In larger productions the Qroduction Accountant may hire additional Assistant Accountants and Accounts rainees, who are responsi!le for data entry, processing cheKues, filing, and auditing petty cash envelopes. \ifferent Assistants are assigned to each of these tasks, e.g., one Assistant Accountant may carry out the duties of the central cashier, while another Assistant Accountant may !e responsi!le for all the accounts paya!le.

!ontractor Accounting6 <ypes o: Accounts

#hen you're organiUing all your company transactions (deposits, payments, accounts receiva!les), you want to create accounts which go !eyond )ust recording de!its and credits. here are = types o: accounts (and these can !e e&panded into su!:accounts to provide you with more information.) here are Asset accounts, Liability, 9"uity, Revenue, and 9>penses. Asset (43567, 891+27) Accounts are what you own. ]ia!ility accounts are amounts you owe. MKuity accounts (03;012/557/ 0D/60128) are what you own after lia!ilities are removed. Hevenue accounts (63^36) include money !rought into your !usiness. And M&penses accounts are what you spent to generate revenue. *any use num!ers to associate with an account to help keep track of any su!:accounts that are added. he industry standard to use num!ers starting with 1 for Asset accounts, F for ]ia!ilities, ' for MKuity, and so on. %or e&ample, entries in an Asset might include: 1___ Qetty Cash 11__ Checking Account 1F__ `ehicles 1'__ ools a MKuipment And entries in a ]ia!ility account would look like this: F___ Accounts Qaya!le F1__ Qayroll a& Qaya!le FF__ bealth (nsurance Qaya!le F'__ Ither Current ]ia!ilities bere is an e&ample of how each of your accounts is affected. "ay you make a purchase of a new drill press. (t would add cFO_ to your ools a MKuipment account as a \e!it. And there would !e a Credit to your Checking Account of cFO_. A \e!it is listed in the left hand column of any account when it comes in to the account. A Credit is listed in the right hand column whenever it leaves an account. cFO_ came in to ools account. cFO_ went out of the Checking Account.