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Bookkeeping NCIII

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19 views19 pages

Bookkeeping NCIII

For educational purposes only

Uploaded by

janethburac690
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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BOOKKEEPING

WHAT IS BOOKKEEPING?

• It is the process of tracking and recording a


company’s financial transactions into organized
accounts on a daily basis.
• These business activities are recorded based on
company’s accounting principles and
supporting documents.
EXAMPLE OF THESE DOCUMENTS INCLUDE:
BILLS:
WHY IS BOOKKEEPING IMPORTANT?

• Proper bookkeeping helps you maintain accurate financial records, which


businesses are required by law to do for taxation purposes.
- BUDGETING when income and expenses are recorded, it is easier to
review your financial resources.
- ORGANIZED when your records are well organized, it is easier to locate
and provide information when needed. It can be easier to file taxes, and you
can also secured funding.
- ANALYSIS it can be use also analysing your company’s strength and
weaknesses.
CHART OF ACCOUNTS
• Is a list of the accounts names a company
uses to label a transactions and keep tabs on
its finances. You use COA to organize
transactions into groups, which in turn helps
your track money coming in and out of the
company.
HOW DOES A CHART OF ACCOUNTS
WORK?
• In Bookkeeping, each transaction you record is categorized according to
its account and sub-account to help keep your books organized. These
accounts and sub-accounts are located in the COA, along with their
balances.

A typical chart of accounts has five primary types of accounts:


• Assets * Revenue
• Liabilities * expenses
• Equity
ASSETS
- is a resource with a monetary value that a person,
business, or country owns or manages with the
hope that it will bring benefits in the future
TYPES OF ASSETS
CURRENT ASSETS- are short-term economic
resources that are expected to be converted
into cash or consumed within one year.
EXAMPLE OF CURRENT ASSETS

Cash – is a legal tender, currency or coins that can be used to


exchange goods, debt or services.
Accounts Receivable – refer to the money a company’s customers
owe for goods or services they have received but not yet paid for.
Prepaid Expenses – is an expenses that is paid for in advance.
Inventory – includes raw materials and finished goods that can be
sold relatively quickly.
NON- CURRENT ASSET
• Assets that will not be converted to cash within 1 year and that will
generate economic benefit into future periods.
Non- current Assets generally fall intone of two categories, these are:
TANGIBLE ASSETS – are assets with a physical form and that hold value.
It can be seen, felt and destroyed by fire , natural disaster or an accident.
Example:
Land, building, machinery, manufacturing equipment, vehicle, furniture,
securities like stocks, bonds. Etc.
INTANGIBLE ASSETS
• Is a non- monetary asset that cannot be seen or touched.
Example:
Goodwill – when one company acquires another company for price greater
than its net asset value.
Brand names – is the name of the product of services offered by a company.
Franchise – a right to sell the company’s products in a particular area using
the company’s name.
License, trademarks, copyrights, reputation etc.
LIABILITIES
- Is something that a person or company owes, usually a
sum of money. Liabilities are settled over time through the
transfer of economic benefits including money, goods, or
services .
TYPES OF LIABILITIES
CURRENT LIABILITIES – are a company’s short-term
financial obligations that are due within one year or within a
normal operating cycle.
EXAMPLE OF CURRENT LIABILITIES
ACCOUNTS PAYABLE -Is a liability incurred when an organization receives
goods or services from its supplier on credit.
NOTES PAYABLE – represent the written promise that a business promises to
repay the lender with interest.
ACCRUED EXPENSES- expenses that a business incurs, but hasn’t yet paid
yet.
UNEARNED REVENUE – Represents money a business received from
customers before providing them goods & services
Wages, Dividends Payable, Taxes Payable, leases etc.
NON- CURRENT LIABILITIES

• long-term debts, are payments that become


due after 12 months, or a year. They can
come with certain challenges
Example:
Long term loans, pension benefit obligations etc.
OWNERS EQUITY

• Is the owners Investment in an asset after they


deduct any liabilities.
* common stock
* preferred stocks
* retained earnings
* treasury stocks.
EXPENSE
- Defined as an outflow of money or assets to another individual or
company as payment for an item or services.

* rent * maintenance
* utilities * depreciation
* wages * insurance
* salaries * cost of good sold
REVENUE

- Is the amount of money brought into the company,


typically by selling goods, products or services.
* sales Income
* Rental Income
* dividend income
THANK YOU!

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