Заказ 3552 (80 грн.)

bookkeeping:

Bookkeeping is an essential accounting tool. A small business or company may employ only one bookkeeper, who records all of (he ІшипсІлІ data by hand; large organizations may employ many bookkeepers, who use electronic and mechanical equipment tor a large part of their work. Each organization has Us own bookkeeping requirements, but all systems operate on the same the basic principles. The bookkeepers themselves must be accurate, good in math and meticulous, that is, they must be very careful to record each detail in its proper place.

About 3.000 B.C., the Sumerians. the Egyptians, and other peoples of the Middle East developed the first known business records. The results of lax collections, farming harvests, and the transactions of merchants were recorded by means of written numbers. The Romans, too, were prolific keepers of records. Indeed, Roman numerals were used in many parts of Europe until the fifteenth century A.P. The stimulus for modern bookkeeping came with the introduction of Arabic, or Hindu-Arabic, numerals and the decimal system in the twelfth century A.D. Most people today use Arabic numerals.

The two basic systems of bookkeeping arc double-entry and single entry. The double-entry method was perfected by the merchants of Venice during the fifteenth century and is still used today. The basic principle of double entry bookkeeping is that every transaction has a twofold effect. In other words, a value is received and a value is yielded or parted with. Both effects, which are equal in amount, тим be entered completely in the bookkeeping records.

An account is a record of the financial that concern one them or a group of similar items. The broad areas of interest can be labeled assets, liabilities, and net worth. Income and expense accounts are totaled at regular intervals, and the resulting profit or loss is posted to a capital account.

QUESTIONS

1. Is the bookkeeping an essential accounting tool?
2. What do the bookkeepers of large organizations use for their work?
3. What features must bookkeepers have?
4. When did the first known business records develop?
5.  When did the stimulus for modern bookkeeping come?
6. What are the two basic systems of bookkeeping?
7. What is the basic principle of double entry bookkeeping?
8. What is an account?

ACCOUNTING

Anything of value that a business or organization owns is commonly known as an asset, Asset accounts include cash, which is the money on hand or in the bank: furniture and fixtures; accounts receivable, the claims against customers that owe moneys stock or inventory, office supplies; and many others that show what the organization owns.

Debts owed in creditors are known as liabilities. If money is owed in an organization or person for things or services purchased on credit, this liability is called an account payable. Oilier liabilities include wages or salaries that are owed to employees, or taxes that have not yet been paid.

The value of the business to the owner or owners is known as capital, Other terms used In designate capital arc proprietorship, owners equity (usually abbreviated OK), ownership, or net worth.

Journals, or books of original entry, are designed to record information about different transactions, including sales, purchases, cash receipts, cash disbursements, and many others, Journals have two or more columns to record increases or decreases in the accounts affected by the transaction, and they often have space for a dale and an explanation of the transaction.

All transactions affect at least two accounts. Each transaction must he analyzed to determine which accounts are affected, and whether (hey should be increased or decreased. An entry made on the left-hand side or column of an account is culled a debit, while an entry made on the right-hand side or column is a credit. Debit, usually abbreviated DR. at one lime meant value received, or literally he owes. Credit, usually abbreviated CR, meant value parted with, or literally he trusts-, In modern bookkeeping, debit refers only (n the left-hand side of an account, whereas credit refers to the right-hand side Some bookkeepers use a far right-hand column to keep an up-to-date balance of the account.

SPECIAL TERMS

Inability: An obligation that is owed by an organization: debts to other organizations tor merchandise or .services: wages owed lo employees; accrued (owed but not yet paid) lanes; and payments due on loans or mortgages.

Capital: The investment in an organization or business by its owner or owners. Other terms often used instead of capital are owners' equity, often abbreviated OH, and proprietorship.

Account: A record of the changes and balances in the value of an individual them listed in the ledger (see next page) of an organization- An example of ;in asset account is the company's furniture and fixtures, usually listed as one them since it would be impractical to list every desk and chair. Bach account, usually abbreviated а/с, frequently has its own page in the organization’s  ledger.

Double-entry: A method of bookkeeping in which the twofold effect of every entry is recorded, thus requiring two entries to record each transaction. By recording both effects of each transaction, this system offer і protection against error.

Single-entry: Any bookkeeping system that does not include the complete results of each transaction. It Іь usually used by small companies nr to keep truck of specific accounts: for example, a checkbook which only keeps a record of the cash balance.

Debit: An amount епіегсчі on the left-hand side of an account. Asset and expense accounts are increased by debiting, that is, by entering amounts in the left-hand column. Debit is usually abbreviated DR.

Credit: ati amount entered mi the right-hand side of an account. Liability, capital, and income accounts arc increased by crediting, that is, by entering amounts in the right hand column. Credit is usually abbreviated CR.

Journal: A book in which transactions are recorded. In double-entry side — are entered in the journal.

Ledger: A listing of detailed accounts, such as n record comprising the accounts receivable of each customer. The general ledger is the hook used lo list all the accounts of an organization. Entries from ail the journals arc transferred to the ledger at regular intervals, usually monthly. This process is called posting. The lender then serves as a summary of all the fiscal activity for that period.

To Foot: To add or total amounts in a column.

Trial Balance: When all the transactions for a certain period have been posted and footed, the debits should equal the credits. The test to see  if this is so is called a trial balance.

AUDITING

Auditing is an accounting function that involves the review and evaluation of financial records. If is done by someone other than the person who entered the transactions  in the records. Not so many years ago, the presence of an auditor suggested that a company was having financial difficulties or that irregularities had been discovered in the records. Currently, however, outside audits are a normal and regular part of business practice. In addition, many corporations, especially the larger ones with complex operations maintain continuous internal audit by their own accounting departments.

Even those companies that do no! conduct an іиіегплі audit need кі гшіпіаіп a system of internal control.  Most good systems  will provide accounting controls against emirs, as well as a division of duties to reduce the possibility of misappropriations. An example of a business paper used in an internal   control   system   is   the   petty   cash   voucher.   Vouchers   indicate receipt of payment. In the case of petty cash vouchers, they are a  record of payment from the small cash fund that most companies keep for minor transactions for which cash is needed. Another example is the expense account voucher that is required by many organizations before payment can be made to reimburse an employee for money spent for business І ravel and entertaining.

Ideally, a business should use as many internal controls as are consistent with efficient operation. In practice, the cost of installing and maintaining control systems forces management to decide which control devices lo use. If there are too many controls, a lime may come when the company's employees   arc   spending   more   time   filling   out   forms   than   performing productive work.

CURRENT TRADING AND FUTURE PROSPECTS

The key objectives of the Board and management are ю maintain the existing core businesses and lo be in a position to take advantage of suitable development opportunities as they arise. In 1994 all trading operations will sec continuing investment to upgrade stores and improve production and distribution and distribution facilities. The major project of the current year will be the completion of the new superstore ill Peak i he Park in Derby, scheduled for September Also in 1994 the Society will .seek to build on the partnerships launched successfully in 1993.

1994 is an important anniversary for the Co operative Movement and we share the hope of our neighbouring societies that this year will at last sec an upturn in economic prospects, leading to improved trading conditions.