TOPIC 5: DEPRECIATION Depreciation If an asset id used for more than one year, it should be capitalized. Assets accounts names such as Vehicles, Office equipment or Buildings. at the end of each accounting period, depreciation for the period is debited to the depreciation expense. Accumulated Depreciation shows all depreciation that has been taken during the asset’s file. Cost of a Fixed Asset Determine the cost of a fixed asset Depreciation is the systematic reduction in the recorded cost of a fixed asset. Examples of fixed assets that can be depreciated are buildings, furniture, leasehold improvements, and office equipment. The only…
Author: Msomi Bora
TOPIC 4: CAPITAL EXPENDITURE AND REVENUE EXPENDITURE Capital Expenditure and Revenue Expenditure Meaning of Capital Expenditure and Revenue Expenditure Give the meaning of capital expenditure and revenue expenditure In this unit, we are going to explore the meaning of capital expenditures and revenue expenditures. We are going to explore them one by one and to see their differences too. Please use a regular YouTube link. Capital Expenditure Payments made in cash or cash equivalents over a period of more than one year. Capital expenditures are used to acquire assets or improve the useful life of existing assets. An example of…
TOPIC 3: ADJUSTMENTS When a transaction is started in one accounting period and finished in a later period, an adjusting journal entry is required to properly account for the transaction. Adjusting journal entries can also refer to financial reporting that corrects a mistake made previously in the accounting period. Adjustments Adjusting entries are accounting journal entries that convert a company’s accounting records to the accrual basis of accounting. An adjusting journal entry is typically made just prior to issuing a company’s financial statements. The Reasons Why the Life of a Business is divided into Accounting Period Explain why the life of a business is divided into accounting period An accounting…
TOPIC 2: CORRECTION OF ERRORS Errors are made when recording business transaction in the journal. These areas can occur because of the wring account or name. But how can we correct these errors? The process of correcting errors depend on whether or not the journal has been posted to the ledger. Correction of Errors How can we correct those errors? If the error is discovered before the entry is poster to the general ledger, this is simple. Neatly cross out the incorrect item and write the correct data above it. Do not erase the error, this is important to ensure honesty and a clear…
TOPIC 1: GENERAL JOURNAL The purpose of bookkeeping is to record all business transactions, these transactions are very necessary. The general journal act as the ‘diary’ of the business. The process of recording these transactions in general journal is called journalizing. General Journal In this concept, you are going to learn about general journal, the purpose of general journal and the relationship between general journal and genera ledger. The Purpose of General Journal Explain the purpose of the General journal Lets talk about the personal diary first. Your diary is used to record your life events. It include recording when, where, how…
BOOK KEEPING NOTES FOR FORM TWO Click the links below to view the notes: TOPIC 1 – BOOKS OF PRIME ENTRY TOPIC 2 – PETTY CASH AND IMPREST SYSTEM (COLUMNAL PETTY CASH BOOK) TOPIC 3 – BANK RECONCILIATION STATEMENT TOPIC 4 – GOVERNMENT ACCOUNTING TERMINOLOGY TOPIC 5 – SOURCES OF GOVERNMENT FUNDS AND EXPENDITURE ESTIMATES
TOPIC 5: SOURCES OF GOVERNMENT FUNDS AND EXPENDITURE ESTIMATES Sources of Government Funds and Expenditure Estimates Sources of Government Funds and Expenditure Estimates Identify sources of government funds and Expenditure Estimates Government revenue refer to the income generated by the government through various income sources inside and outside the particular government, As to any other person one will be eager to know where government earn money to finance its activity as well as expenditure of the government. The following are the source of revenue of various government including united republic of Tanzania (URT):- Taxation, Like we have discussed in the previous…
TOPIC 4: GOVERNMENT ACCOUNTING TERMINOLOGY Meaning of Government Counting Terminology Meaning of the term Accounting Define the term accounting Accounting is the systematic and comprehensive recording of financial transactions pertaining to a business. Accounting also refers to the process of summarizing, analyzing and reporting these transactions. The financial statements that summarize a large company’s operations, financial position and cash flows over a particular period are a concise summary of hundreds of thousands of financial transactions it may have entered into over this period. Accounting is one of the key functions for almost any business; it may be handled by a…
TOPIC 3: BANK RECONCILIATION STATEMENT Bank Reconciliation Statement Meaning of Bank Reconciliation Statement Define Bank reconciliation Statement Bank reconciliation is the process of matching the balances in an entity’s accounting records for a cash account to the corresponding information on a bank statement. The goal of this process is toascertain the differences between the two, and to book changes to the accounting records as appropriate. The information on the bank statement is the bank’s record of all transactions impacting the entity’s bank account during the past month. A bank reconciliation should be completed at regular intervals for all bank accounts,…
TOPIC 2: PETTY CASH AND IMPREST SYSTEM ( COLUMNAL PETTY CASH BOOK) Petty Cash and Imprest System (Columnal Petty Cash Book) Operation of the Petty Cash Book Determine the operation of the petty cash Book Petty Cash Book: Petty cash book is a kind of cash book which records large number of small payments such as conveyance, cartage, postage, telegrams and other expenses under the imprest system. These expenses are repetitive in nature. The procedure becomes cumbersome if all small and repetitive payments are handled by the main cashier and are recorded in the main cash book. The cash book…
