TOPIC 1: BOOKS OF PRIME ENTRY Books of Prime Entry The Meaning of Books of Original Entry or Subsidiary Books Give the meaning of books of original entry or subsidiary books The ledger accounts of a business are the main source of information used to prepare the financial statements. However, if a business were to update their ledger books each time a transaction occurred, the ledger accounts would quickly become cluttered and errors might be made. This would also be a very time consuming process. To avoid this complication, all transactions are initially recorded in a book of prime entry.…
Author: Msomi Bora
BOOK KEEPING NOTES FOR FORM ONE Click the links below to view the notes: TOPIC 1 – SUBJECT MATTER OF BOOK KEEPING TOPIC 2 – PRINCIPLES OF DOUBLE ENTRY SYSTEM TOPIC 3 – CLASSIFICATION OF ACCOUNTS TOPIC 4 – TRIAL BALANCE TOPIC 5 – STOCK TOPIC 6 – ELEMENTARY TRADING PROFIT AND LOSS ACCOUNTS TOPIC 7 – ELEMENTARY BALANCE SHEET
TOPIC 7: ELEMENTARY BALANCE SHEET Elementary Balance Sheet The Balance Sheet Define the balance sheet The balance sheet, also called the statement of financial position, is the third general purpose financial statement prepared during the accounting cycle. It reports a company’s assets, liabilities, and equity at a single moment in time. You can think of it like a snapshot of what the business looked like on that day in time. Unlike the income statement, the balance sheet does not report activities over a period of time. The balance sheet is essentially a picture a company’s recourses, debts, and ownership on…
TOPIC 6: ELEMENTARY TRADING PROFIT AND LOSS ACCOUNTS Elementary Trading Profit and Loss Accounts Final accounts give a concise idea about the profitability and financial position of a business to its management, owners, and other interested parties. All business transactions are first recorded in a journal. They are then transferred to a ledger and balanced. These final tallies are prepared for a specific period. The final accounts consist of trading account, profit and loss account, and balance sheet. Trading, Profit and Loss Account Describe what a Trading, profit and Loss account is Trading account are those accounts prepared at the end of accounting…
TOPIC 5: STOCK Stock Difference between Stock at Start and Stock at Close Distinguish between stock at start and stock at close Stock is the value of the goods that you have on hand to sell to your customers. If you sell services rather than goods, you won’t have any stock. Stock might include raw materials that you buy to make your goods, half-finished goods (known as ‘work in progress’), and finished goods. You must include the value of stock in your accounts at ‘the lower of cost and net realizable value’. That means that if you’re going to sell…
TOPIC 4: TRIAL BALANCE Trial Balance You learn about general journals and general ledger on the first topic. In this topic we’re going to explore the next process of an accounting cycle which is trial balance. You are going to explore what it is and understand how to prepare it.Lets remind ourselves of an accounting cycle before we start to explore about trial balance. Meaning of Trial Balance Define the Trial Balance Trial Balance is a list of closing balances of ledger accounts on…
TOPIC 3: CLASSIFICATION OF ACCOUNTS Classification of Accounts It is necessary to know the classification of accounts and their treatment in double entry system of accounts. Broadly, the accounts are classified into three categories: Personal accounts Impersonal Real accounts Tangible accounts Intangible accounts Let us go through them each of them one by one. Difference between Personal and Impersonal Account Differentiate between personal and impersonal accounts The differences between personal and impersonal accounts can be seen from what is debited and what is credited. In this concept you are going to learn those differences and investigate how they differ. There…
TOPIC 2: PRINCIPLES OF DOUBLE ENTRY SYSTEM Principles of Double Entry System In these concept, you are going to explore more about business transactions. It is very important that, you understand about the basic principles of double entry system. Please watch the following video and remember to share your ideas on the discussion forum. Please use a regular YouTube link. Description of a Business Transaction Describe what a business transaction is Exercise 1 Do you know what steps to take when recording any business transaction? Here is the summarized accounting cycle An accounting transaction is a business event having a monetary…
TOPIC 1: SUBJECT MATTER OF BOOK KEEPING Subject Matter of Book Keeping The Meaning of Book Keeping Define book keeping Book-keeping is an art of recording financial business transaction in a set of books in terms of money or money worth. Bookkeeping involves the recording, storing and retrieving of financial transactions for a company, nonprofit organization and individuals.Prior to computers and software, the bookkeeping for small businesses usually began by writing entries into journals. Journals were defined as the books of original entry. In order to reduce the amount of writing in a general journal, special journals or day books were…
COMMERCE NOTES FOR SECONDARY SCHOOLS Click the links below to view the notes: FORM ONE FORM TWO FORM THREE FORM FOUR DEFINITIONSOF COMMERCECommerce is the exchange of goods and services between businesses.Commerce is the trade of goods, services, or other things of value betweencompanies or organizations. In a broad sense, governments try to manage tradeto make their people happier and healthier by creating jobs and making usefulgoods and services.Commerceis the conduction of trade of goods and services. This can occur on multiplescales. Nations can trade goods and services to one another, businesses canpurchase goods to move them down the supply chain, and goods can be sold…
