Accounting Bookkeeping Presentation ppt Final

Taxation

and

Financial Services

www.avconsultantshyd.com

Accounting

&

Bookkeeping Services


ACCOUNTING AND BOOKKEEPING

I. Introduction

II.

III.

IV.

Definition of Accounting and Bookkeeping

Importance Accounting and Bookkeeping

Users of Financial Statements

Basic Accounting Concepts and Principles

Accounting Equation and the Rules of Debit and Credit,

and the Double Entry Bookkeeping System

Accounting Cycle

V. Chart of Accounts

VI.

VII.

VIII.

Books of Accounts

Basic Financial Statements

Workshop


Definition…

Accounting is an art of recording,

classifying, summarizing in a

significant manner and in terms of

money, transaction and events which

are in part, at least, of a financial

character and interpreting the

results thereof.

Bookkeeping is the systematic

recording of financial transactions

and events in a chronological order.


Recording-this

function deals with

the writing on the

books or records of

the business

transactions or

events. This is

technically

referred to as

bookkeeping.

Classifying-is the

recording and

summarizing

functions, similar

items are grouped

or sorted under

the same names

Summarizing-it is

the grouping or

incorporating the

details of the data

in the accounting

records.



Importance

1. To have a complete records of day to day

transactions and events that have

transpired within the organization for

future reference;

2. To serve as guide in the formulation of

policies and activities;

3. Bookkeeping records serve as source of

information necessary for the directors to

properly manage the cooperative;

4. Records are the basis of reports to

members; and

5. The government requires the periodic

submission of financial statements.



Basic Accounting Principles and

Concepts

1. Business Entity

A business is considered a separate entity from the owner(s) and

should be treated separately. Any personal transactions of its

owner should not be recorded in the business accounting

book unless the owner’s personal transaction involves adding

and/or withdrawing resources from the business.

2. Going Concern

It assumes that an entity will continue to operate indefinitely. In

this basis, generally, assets are recorded based on their original

cost and not on market value. Assets are assumed to be heldand

used for an indefinite period of time or during its estimated

useful life. And that assets are not intended to be sold

immediately or liquidated.


3. Monetary Unit

The business financial transactions recorded and

reported should be in monetary unit, such as US Dollar,

Canadian Dollar, Euro, etc. Thus, any non-financial or

non-monetary information that cannot be measured in

a monetary unit are not recorded in the accounting

books, but instead, a memorandum will be used.

4. Historical Cost

All business resources acquired should be valued and

recorded based on the actual cash equivalent or

original cost of acquisition, not the prevailing market

value or future value. Exception to the rule is when

the business is in the process of closure and

liquidation.

5. Matching

This principle requires that revenue recorded, in a

given accounting period, should have an equivalent

expense recorded, in order to show the true profit of

the business.


6. Accounting Period

This principle entails a business to complete the whole

accounting process over a specific operating time period.

Accounting period may be monthly, quarterly or annually.

For annual accounting period, it may follow a Calendar or

Fiscal Year.

7. Conservatism

This principle states that given two options in the amount

of business transactions, the amount recorded should be

the lower rather than the higher value.

8. Consistency

This principle ensures similar and consistent accounting

procedures is used by the business, year after year, unless

change is necessary.

Consistency allows reliable comparison of the financial

information between two accounting periods.


9. Materiality

Business transactions that will affect the decision of a user are

considered important or material, thus, must be reported

properly. This principle states that errors or mistakes

in accounting procedures, that which involves immaterial

or small amount, may not need attention or correction.

10. Objectivity

This principle states that the recorded amount should have some

form of impartial supporting evidence or documentation. It also

states that recording should be performed with independence,

that’s free from bias and prejudice.

11. Accrual

This principle requires that revenue should be recorded in the

period it is earned, regardless of the time the cash is received.

The same is true for expense. Expense should be recognized and

recorded at the time it is incurred, regardless of the time that

cash is paid. This is to show the true picture of the business

financial performance.


Accounting Equation

ASSETS=LIABILITIES+RESERVES+EQUITY

Assets

•Assets are things or value owned or possessed.

Liabilities

•Liabilities are debts; they are amounts owed to

creditors.

Reserves

•Reserves are amounts to be established as mandated

by RA 9520 (Philippine Cooperative Code of 2008) for

specific purposes.

•Equity is the excess of assets over liabilities and

Equity reserves.


Rules of Debit and Credit

Transaction is the exchange of goods or

services at a certain sum of money.

It is an exchange of monetary

values. In every transaction, there

For every value

received, there is

an equal value

parted with. It is

obvious therefore

that a transaction

has a double effect,

receiving of value

and giving of value.

is value received and value parted with. Value is

anything susceptible of pecuniary estimation. It may

represent money itself, property other than money,

services, or rights. Every transaction should be

authenticated by a genuine business

form.





The accounting cycle is the step

by step procedures necessary to

come out with the end results

of accounting and which serves

as a communication tool of

cooperative to various

interested parties, the Financial

Statements.


1. Analysis of

business

transactions

All transactions

must be supported

with necessary

business

documents (official

receipts, vouchers,

checks, invoices).

2. Journalizing

The chronological

recording of

transactions in the

books of accounts

following the

principles of Debit-

Credit and the

generally accepted

accounting

principles.


3. Posting

The transferring of journal entries

from various books of accounts to the

General Ledger.

The General Ledger is the book where

we classify or group similar items

using different accounts. Also known

as a group of accounts and the book

of final entry.


4. Preparation of Trial Balance

It is a list of accounts with balances (open

accounts) found in the general ledger.

It checks the equality of Value

Received/Debit and Value Parted

With/Credit of the journal entries.

Find the total debits and total credits and

the corresponding balance of each

account.


5. Make Adjusting

Entries



6. Preparation of Adjusted Trial

Balance

An adjusted trial balance is a testing of

all company accounts that will appear on

the financial statements after year-end

adjusting journal entries have been

made.



7. Preparation of Financial

Statements

Financial Statements are prepared by

transferring the account balances on the

adjusted trial balance to a set of financial

statement templates.


8. Make Closing Entries

The books of accounts are closed at the

end of the accounting period. Nominal

Accounts (the accounts found in the

Statement of Operations) are closed

while Real Accounts (the accounts found

in the Statement of Financial Condition)

are carried forward to the next business

operation.


9. Post Closing Trial Balance

10. Reversing Journal Entries



Books of Accounts

1. Cash Receipts Book/Journal

All cash received are recorded in this book.

2. Cash Disbursement Book/Journal

Used to record all payments of cash made.

3. Purchase Book/Journal

Goods bought and are intended for sale are recorded

in this book.

4. Sales Book/Journal

Used to record the sales of goods.

5. General Journal

Non-cash miscellaneous transactions are recorded in

this book.

6. General Ledger

7. Subsidiary Ledger


Basic Financial Statements

1. Statement of Financial Condition

2. Statement of Operation

3. Statement of Changes in Equity

4. Statement of Cash Flow


CONTACT DETAILS

AJAY KUMAR VHAVLE

040-40060025 / 8074716673

AVCONSULTANTSHYD@GMAIL.COM

WWW.AVCONSULTANTSHYD.COM

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