Bookkeeping - Applications

Course CodeBBS203
Fee CodeS2
Duration (approx)100 hours
QualificationStatement of Attainment

LEARN MORE ABOUT BOOKKEEPING FOR SMALL BUSINESSES 

This course is a natural follow on from our Bookkeeping Foundations course, but can also be studied independently if you already have basic bookkeeping skills. If you're looking to develops or refresh your skills in areas such as:

  • Inventory Management
  • Obtaining Finance
  • Managing Debts
  • Budgeting
  • Financial Statement Analysis

Then this course has been designed to do just that.  

This might be suited to those who are working in the following situations:

  • Bookkeepers looking to upskill in the areas listed above
  • Administrative staff working in a trading business (retail or wholesale)
  • Business owners who need  financial record keeping skills
  • Have a management role in business but lack the basics of accounting procedures and record keeping
  • As part of your job, or for personal interest, you want to be able to create, read and analyse financial reports
  • Those who have completed the Bookkeeping Foundations course and want to progress their skills further

Financial aspects of business can be daunting for some, but we take you through each area step by step so there's no need for concern.


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Lesson Structure

There are 10 lessons in this course:

  1. Introduction to Bookkeeping Applications
    • Stock defines a trading business
    • Bookkeeping requirements for a trading business
    • Steps in processing stock transactions
    • Books required for a trading business
    • Trading businesses and accounting rules
    • Accounting doctrines
    • Accounting standards
  2. Decision Making -How to manage bookkeeping
    • Bookkeepers Terminology
    • Using bookkeeping as a management tool
    • What are business structures
    • Business requirements of companies
    • Financial information, and who uses it
    • Alternative approaches to accounting systems
    • Definitions and bookkeeping processes
    • Double entry bookkeeping
    • Single entry bookkeeping
    • Cash accounting
    • Modified cash accounting
    • Accrual accounting
    • Choosing depreciation methods
    • Depreciation calculation
    • Calculating depreciation with the straight line method
    • What if there is no residual value
    • How to enter depreciation in the books
    • Declining balance method of depreciation
    • Calculating percentage rate of depreciation
    • Units of activity depreciation method
    • Intangible assets
    • Tracking assets and depreciation
    • Closing stock control methods
    • Functional profit and loss in a trading business
    • Informative profit and loss presentation - segmentation, grouping expenses
    • Showing Extraordinary Revenue and Expenses
  3. Managing Cash Flow, Obtaining Finance, Managing Bad Debts and Accounts Payable
    • Definition of cash
    • The cash cycle
    • Cash flow and liquidity
    • Analysing a businesses cash flow
    • Cash flow margin
    • Statements of cash flow
    • Managing costs in a business
    • Financing a business
    • Rules for business funding
    • Business set up costs
    • Thinking outside the box
    • Loss of time and income
    • Managing bad debt
    • Initiating collection
    • Bookkeeping procedures for bad and doubtful debts
    • Accounts payable procedures
    • Accounts payable schedule
    • Ageing report
    • Source Documents -invoice, monthly statement
    • Credit purchasers journal
    • Creditors subsidiary ledger and schedule
    • Cash payments journal and creditors control account
  4. Managing Inventory Part 1
    • Difference between goods and commodities
    • Role of stock in a trading business
    • Purpose of physical stock take
    • Costing goods
    • When an articles cost changes
    • How cost relates to gross profit
    • Difference between cost of goods sold and selling expenses
    • Pricing stock
    • Mark up
    • Margin
    • Stock coding system
    • Stock sheets
    • Journals used in businesses that carry stock
    • Common journals
    • Examples of journal entries
    • Recording purchase returns in the general journal
    • Closing books
    • Closing ledger accounts
    • Preparing for new accounting period
    • Transferring balance day closing entries
    • Profit and loss account
    • Balance sheet
  5. Managing Inventory Part 2
    • Perpetual stock control
    • Stock cards and subsidiary ledger
    • Records on stock cards
    • Stock gains and losses
    • Adjustments
    • Errors in stock taking
    • Bar codes
    • Costing sales
    • Inventory turnover ratio
    • Modified general journals for perpetual stock control
    • Valuing stock methods -FIFO, LIFO, Identified cost method, weighted average, etc.
    • Terminology
  6. Establishing and Managing Control Accounts
    • Introduction
    • Grouping accounts
    • Advantages of control accounts
    • Debtors control accounts
    • Debtors subsidiary ledger and control account
    • Cash receipts journal and debtors control account
    • Credit purchasers journal
    • Creditors subsidiary ledger and control account
    • Cash payments journal and creditors control account
    • Control accounts relationship to non current assets
    • What happens at the end of assets useful life
    • Assets register
    • Disposal of non current assets
    • Creditors control accounts relationship to subsidiary accounts
    • Control accounts and expenses
    • Control accounts and inventory
  7. Budgeting Part 1
    • Introduction
    • Budget types
    • Cash budget
    • Capital budget
    • Sales budget
    • Marketing budget
    • Production budget
    • Expense budget
    • Project budget
    • Master budget
    • Inter-relationships between budgets
    • The cash budget
    • Preparing a cash budget
    • Factoring in safety margins
    • Variable Costs
    • Using net profit to evaluate business performaNCE
    • What is profitability?
    • What is gross profit?
    • What is net profit?
    • Cash flow margin
    • Return on assets margin
    • Gearing ratio
    • Owners equity margin
    • Budgeted profit and loss statements
    • Budgeted balance sheets
    • Variances in budgets
    • Budget reviews and performance reports
  8. Budgeting Part 2
    • A problem based learning project (ie. PBL) where you will prepare budgeting for a retail business.
    • PBL project is carefully designed by experts to expose you to the information and skills that we want you to learn.
    • In undertaking the project, you are given: A statement of the problem, Questions for solving the problem, Time and effort you should spend on a project.
  9. Payroll, PAYG Taxation, Taxation for Trading Businesses
    • How to set up a payroll system
    • Types of payments made for work done
    • Employee records to be kept
    • Other records
    • Fringe benefits and taxation
    • Recording wage payments
    • Employee payment summary
    • PAYG Taxation
    • Using time sheets
    • Superannuation or pension funds
    • Taxation law terminology
    • Tax related expenses
  10. Financial Statement Analysis
    • Analysis and interpretation
    • Why do we analyze financial data
    • Using net profit figures to evaluate business performance
    • Analyzing cost centres in business
    • Functional classification on P & L Statement
    • Difference between analysis and interpretation
    • Ratio analysis
    • Trend analysis Vertical analysis
    • Horizontal analysis
    • When should financial data be analyzed
    • Calculating investment returns
    • Return on assets margin, equity margin
    • Cash flow ratio operation
    • Accounts receivable turnover ration
    • Evaluating business performance using net profit ratio
    • Profitability

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.

WHY STUDY WITH ACS?

There are many reasons for studying this course with us, here are a few of them:

  • Developing knowledge and skills within this course with not only provide you with the information you need, but the confidence to be able to use it
  • Showing employers that you're completing a qualification shows commitment and may open up more opportunities
  • As a manager, even if you're not using the skills daily, it's good to understand the processes that one of your team members is using
  • During the course you will be asked to complete tasks including a project, where you can apply your learning to specific scenarios 
  • Throughout the course you will be supported by a subject specialist tutor, who is there to provide guidance and answer any questions you may have
  • All of our courses are designed to be studied flexibly, meaning you can continue with other commitments whilst developing your education

TAKE THE NEXT STEP AND ENROL NOW!

You can enrol on the course now, but if you have any questions about the content of the course or studying with ACS, then please get in touch with us today - use our FREE COURSE COUNSELLING SERVICE to get in touch with our expert tutors. They will be pleased to help you!

 

 

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