Bookkeeping - Applications

A useful advanced book keeping course for small businesses and trading firms. 

A course for people who know the basics and have a fundamental understanding of bookkeeping, and are seeking to  learn more.

Comment from one of our students

"I was very satisfied with the service I received from ACS when I did my Bookkeeping Course. I emailed my assignments using my login at the ACS site and received them back, marked within a week. The comments of the tutor were comprehensive and helpful. The administrative staff also were very quick to reply to any of my emailed questions "
- Barbara Kale

Lesson Structure

There are 10 lessons in this course:

1. Introduction - Review of Accounting Foundations (add business types)
2. Decision Making - How to Manage Your Bookkeeping
3. Managing Cash Flow, Obtaining Finance and Managing Bad Debts
4. Managing the Inventory Part 1
5. Managing the Inventory Part 2
6. Profit and Loss
7. Establishing and Managing Control Accounts
8. Budgeting Part 1
9. Budgeting Part 2
10. Financial Statement Analysis

Each lesson culminates in an assignment which is submitted to the school, marked by the school's tutors and returned to you with any relevant suggestions, comments, and if necessary, extra reading.

Aims

• Describe the nature of trading businesses, and the differences between recording and reporting for trading businesses and service businesses.
• Describe the nature of stock and the physical system of recording inventory.
• Explain the perpetual or continuous system of recording for inventory, the use of stock cards and methods of stock valuation.
• Distinguish between the main methods for valuing merchandise on hand and the procedures that need to be set up in order to maintain the different systems.
• Distinguish between bad debts and doubtful debts
• Explain how to prepare the journal entries and understand the effect of bad debts on final accounting reports.
• Extend your knowledge of the classification in accounting reports and how it is applied to trading firms.
• Acquire an understanding of control accounts and their uses.
• Explain of the use of budgets and to apply the skills learned.
• Explain the use and role played by statements of cash flows.
• Explain the different accounting alternatives available to business and the advantages and disadvantages of the various alternatives.
• Describe the tools used to measure the key areas of performance and financial position of a business and how they can aid in decision making.
• Describe the different sources of finance available to businesses, other methods of expanding a business and the impact of different equity structures on the accounting and decision making processes.

What You Will Do

• Describe the flow of financial information through a trading firm by preparing a flow chart.
• What are the four general objectives of accounting?
• Explain how a physical item may be classified as inventory for one business but as a non-current asset for another.
• Outline the two ways the value determined by a physical stocktake affects the final accounting report.
• What are the two processes involved in completing a physical stocktake?
• Write a brief description of what is involved in the perpetual inventory system.
• State and describe four advantages and four disadvantages of the perpetual inventory system.
• List the three special journals which need to be modified if a business changes from the physical method to the perpetual method or recording inventory.
• Explain the role of bar codes in recording inventory transactions.
• List four items of financial information that can be generated on a daily basis if a computerised bar coding system is used.
• Explain the relationship between the doctrine of conservatism and the lower of cost and NRV rule
• Distinguish between the terms doubtful debts and bad debts.
• Explain how the allowance for doubtful debts can incorporate both bad and doubtful debts for a period.
• Describe two different ways of estimating the value of an allowance for doubtful debts.
• List the benefits of classification to management.
• Describe the benefits of departmental reporting.
• State and describe the advantages and disadvantages of control accounts.
• Explain the importance of cash budgeting when accounting for a trading firm.
• Explain the purpose of a budget performance report.
• Prepare estimates of the future cash inflows for a business
• Prepare a table showing the breakdown between credit and cash sales for the six months July-Dec.
• Explain the role of the doctrine of disclosure when management decides to change depreciation methods.
• Explain why some accountants criticise the historical cost accounting system
• Distinguish between analysis and interpretation
• How is it possible for a business to show an increase in their gross profit
  • ratio but a decrease in their net profit ratio
• What does an asset turnover ratio tell a business owner?
• List five aspects of the profit report which are likely to be considered by the lender.
• What are the benefits of preparing a well researched finance application?

Do You Like Working with Money?

Bookkeepers live in a world of finance. People working in the world of finance should understand terminology used by the bookkeeper, but sometimes others who you work for might not understand or appreciate the significance of the work a bookkeeper does.

Bookkeepers need to communicate with both:

1. People in the world of finance such as bankers, taxation officers, financial advisors; and
2. People who are not in the world of finance, such as people who create and or provide goods and services to and from the enterprise they work for.
   
   

A good bookkeeper needs to cultivate communication skills and be able to accurately interact with everyone they work with, in order to properly and accurately gather the information needed to do a good job.

Understanding the Language

Although accounting standards (and therefore terminology) may change from time to time, the concepts and language of bookkeeping has rigid consistency. It was formulated from a long history of accounting standards, set down by various bodies over many years - both as national and increasingly as international standards.  Bookkeepers know the importance of learning the correct terms whilst also keeping pace with new standards as they are introduced.  This is important knowledge that bookkeepers must learn and use to communicate with people in the world of bookkeeping and accounting.  

Here are some of the more important things you will learn to better understand through this course:

Accounts receivable/debtors: the money owed to a business by a customer, after they have been sent an invoice, for the products or services they were supplied on credit.

Accounts payable/creditors: the money owed by the company for good or services supplied to them.

Accruals: bringing forward the cost of goods or services or the receipt of monies owed against an invoice into a current accounting period, even though you may not have paid for the goods/services received or received payment for goods/services you supplied.

Cash accounting: accounting systems that do not recognise accruals – in other words they only recognise the debts and credits for a specified accounting period.

Assets:  items of value to a person or a business that can be easily transferred to cash.

• Current assets: Cash and other resources that a company expects to either use up or to turn into cash within the following year of the date on the balance sheet.  
• Fixed assets: an asset that is not sold off (or consumed) during the normal course of trading within a business.
• Liabilities: the obligation of a business to transfer an item of value to another company or person.  This can include accruals on a balance sheet.
• Current liabilities: amounts due to be paid to creditors, within a twelve month period from the date on the balance sheet.

Capital: the assets and cash owned by a business.

• Equity: the total value of assets within a business that have been contributed by the owner
• Net profit: income generated before taxes.

Chart of accounts: a list of numbered and named ledger accounts.

• Credit: a facility extended by a company or person to enable payment of goods after they are received.
• Debits: an entry recorded on the left hand side of an account that shows an amount owed
• Income accounts: the books in which all the income that is received by the business is recorded.
• Journal: details all the financial transactions of a business and in which accounts these transactions belong.
• General ledger: a book that specifies a summary of all the transactions held within the accounts of a business.
• Trial Balance: a report that lists all the accounts of a ledger and the total (end amount for a given period) of the transactions for each account – both credits and debits.

Depreciation: due to wear and tear an asset is reduced in (book) value over a period of time.

Double entry bookkeeping: amounts are debited in one account and credited in another.

Financial Statements:

• Income statement: A financial statement that shows the results of all income received and expenditure by a business within a certain period.
• Balance sheet: states the liability and assets held by a company at a particular date.
• Profit and Loss Statement: a standard financial document for a specified period (e.g. monthly, 3 monthly or yearly) that summarizes a company's income and expenses.
• Inventory: a list of stock (i.e. all items including raw materials and finished products etc.) held by a company.

HOW CAN THIS COURSE HELP YOU?

If you want or need sound knowledge of accounting, bookkeeping and business finance - the basis of all successful business management - this course is for you and also if you:

Do you have any questions at all? 

Please click here to contact our

Book Keeping tutors.