Learn Accounting through Video Lessons

Hello Friends

I have launched a video lesson channel on youtube. Join my channel to learn accounting concepts in concise way.

https://www.youtube.com/channel/UCIhrJpkIczw3TSc2krV60gw

https://www.youtube.com/channel/UCIhrJpkIczw3TSc2krV60gw

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Learn the concepts of Basic Accounting (Video)

Learn Basic Accounting Concepts

1. What is Chart of Accounts
2. Elements of Accounting
3. Rules of Debits & Credits
4. Double Entry Accounting System

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Accounting roles in an organization

Accounting is a field of opportunities. Accounting jobs can be categorized into four different categories

1. Bookkeeper
2.Accounting Clerk
3.Accountant
4.Certified professional Accountant/ Qualified Accountant

1. Bookkeeper

Bookkeeper handles day to day routine activities, just like recording of payments, collections, payroll processing, expenses claims and other journal entry recording.

2. Accounting Clerk

Role of accounting clerk is more narrow focused than the bookkeeper. A bookkeeper handles financial activities of different nature, but accounting clerk is hired for a particular area like accounts payable, accounts receivable, expenses claims etc

3. Accountant

Accountant is a key person in an organization who prepares financial statements and manage the team of accounting clerks and bookkeepers. He is expected to perform a lot of functions along with daily routine financial activities. He should have knowledge of other organizational functions such as marketing, production, operations and admin to interlink the reasonableness of numbers coming from commercial operations.

4. Certified Public Accountant/ Qualified Accountant

CPA sit for the exam based on International Accounting Standards. His role is bigger than the normal accountant in terms of responsibility and designation. He is required to view the things from global perspective besides having grip over the numbers. With increasing international level complexities in businesses, qualified accountant brings the knowledge of standards followed by the majority of accountants in world.

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Accounting Software for Small Trading Businesses

Business Manager  www.manager.io

Business Manager is one of the best accounting softwares for small businesses and traders. Its an online web based system with facility to create unlimited businesses and users. Subscription cost per month is only USD 19 without any additional charges. The desktop version of the software is totally free.

How to Setup the Business in this software:

1. Create business entity

2. Fill all the particulars like address, phone number and email addresses

3. Upload logo (it will be showed on all invoices and reports)

4. Setup chart of accounts according to your business

5. Setup Bank accounts and other petty cash accounts

6. Start recording transactions

7 Extract reports from the reports Tab

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Double Entry in T Accounts by Debits and Credit Rules

basic rules of DEBITS and CREDITS

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Accounting Course: Lesson 1 - Understanding Chart of Accounts

A chart of accounts is the listing of all accounts, a company needs to use for recording of transactions. Chart of accounts is designed by keeping in view the needs of the company.

Accounts are usually listed in chart of accounts as below;

Balance Sheet

1. Assets
2. Liabilities
3. Equity/ Capital

 

Income Statement

 

1. Revenues
2. Expenses
3. Non Operating Revenues
4. Non Operating Expenses

 

Expenses are usually breakdown into further categories;

 

Production expenses

Selling Expenses

Marketing expenses

Human Resource Expenses

 

Sample Chart Of Accounts :

 

Current Assets: (Account numbers : 0001-0100)

 

0001 Raw Material 1

0002 Raw Material 2

0003 Raw Material 3

0004 Work in Progress 1

0005 Work In progress 2

0006 Cash

0007 Trade receivables

Sub Ledgers: 0007-001 ABC debtor

                      0007-002 CDE debtor & so on

 

Property Plant & Equipment : (Account numbers : 0101-0200)

 

0101 Vehicles

0102 Furniture

0103 Plant

0104 Land & so on

 

Current Liabilities :( Account numbers : 0201 -0300)

 

0201 Bank Loan

0202 Notes

0203 Suppliers

        Sub ledger : 0203 -001 ABC Supplier

 

Long Term Liabilities : (Account numbers 0301-0400)

 

0301 Bank Loan

0302 Lease Liability

 

Equity : (Account numbers 0401-0500)

 

0401 Paid up Share Capital

0402 Retained Earnings

0403 Treasury Stock

 

Income statement accounts shall be explained in detail in Lesson 2. Keep visiting us for a 1 month Accounting course.

 

 

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Why Pay for Learning Accounting? Tutor Accounts is ready for you!

We have designed a course for accounting learners. It will be very helpful for basic and midway learners for their education and career. Why pay for Hefty Tuition Fees, when Tutor Accounts is ready to teach you!

Keep visiting us !

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Learn Accounting by DEBITS & CREDITS - No mistake in double entry

It is often said that if you have learnt the basic rules of DEBITS and CREDITS, accounting is no more difficult. I am writing this to make the most confusing topic easy for you.

Remember there are 5 elements of Financial Statements, these are;

1. Assets
2. Liabilities
3. Capital
4. Expenses
5. Income

Remember these rules and you will be the Winner!

Asset :  Increase in  Asset >>> Debit
            Decrease in Asset >>> Credit

If you have purchased a property by paying cash of $100,000, then it means You have in fact made an increase in your asset by corresponding decrease in asset i.e cash.

Entry would be:
   Property Dr
   Cash       Cr

Liabilities:   Opposite of Assets

    Increase >>>>Cr
    Decrease>>>>Dr

If you have taken a loan of $100,000 for paying to supplier. Means you have increased your bank liability for decreasing liability towards supplier

Entry would be:
   
     Supplier Account >>>> Dr
     Bank Loan>>>>>>>>> Cr

Capital:   Same as Liabilities


Expenses:   Same as Assets

Income:    Same as Liabilities/ Capital

Conclusion: Just remember two scenarios

1) Assets & Expenses >>>>>>>>>>Same Treatment
2) Liability, Capital and Income >>>Same Treatment



Be confident! you will never make an error in double entry. Best of Luck!

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Basics of Accounting for All

http://www.youtube.com/watch?v=dMhwnzWKsDQ

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Financial Statement Analysis - Introduction

The way of understanding the risks and profitability of the company/ firm through reported figures in financial statements is Financial Statements Analysis. Various types of analysis may be conducted but the most commonly uses is 'Financial Statements Ratio Analysis'. Two types of ratios are calculated that are Profitability ratios & Risk ratios.

Profitability Ratios:

Profitability ratios calculates the utilization of capital invested to generate profits. 

1) ROE ' Return on Equity':      Earnings
                                          Average Equity
Equity means the total capital invested plus retained profits.

2) Gross Margin ratio

3) Net profit margin Ratio

Net Profit/ Sales

4) Gross Profit margin ratio

Gross profit/ Sales

Apart from the above mentioned there are various profitability ratios.

Credit Risk Ratios:

These ratios calculates underlying credit risk of the company. Liquidity analysis and solvency analysis. Liquidity analysis returns the efficiency of working capital cycle.

Working Capital:

Working capital represents the net current assets. Net current asset means the current assets less current liabilities.




 

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Excel Tips n Tricks - Conditional Formatting

Conditional Formatting in Excel 2007 is one of the most powerful data validation tool.

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Understand Inventory Accounting

There are three types of inventory/ stock in an organization.

Raw Material Inventory
Finished goods
Consumables

Raw material inventory is used to manufacture finished goods.
Finished goods inventory is held for sale.
Work In Process: Semi Finished goods.

lets take a scenario of Potato Chips Factory;

Raw Material : Potatoes, Vegetable Oil
Finished goods: Potato Chips
Work in process: Potato chips peeled and half fried

Accounting Entries:

Purchase of Raw material:

Raw Material Inventory   DR
Bank/ Cash                       CR

Work In Process:

Work In Process             DR
Raw material Inventory CR

Finished Goods

Finished Goods              DR
Work In Process            CR






 

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Rich Dad Poor Dad Author Robert's book has changed my perspective of education. I have made my strategy to come out of RAT RACE and have started working on it. To leave a Monthly fixed pay Check hurts initially, but it gives you the financial freedom.

Robert's new book "Why A students work for C Students" is the must read book for those who like to come out of this RAT RACE !


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Microsoft Excel 2007 Tips and Tricks for accounting Professionals

MS Excel 2007 application is widely being used in the organisations for data processing, financial modelling, data analysis and preparation of complex reports. Excel with its wide range of formula functions, embedded featured and adaptability makes the life of the accountant/ auditor rather simple.
Most commonly used features/ functions for accountants/ auditors.
Pivot Table
Pivot table gives you the option to prepare customized reports from the data range. The only task you have to do is to apply pivot table and rest would be done by the Excel.

• To apply pivot table just arrange the data with the headers.
  Insert pivot table from the 'Insert' tab on the toolbar of the sheet.


• Select the desired range of the data.


• Click 'OK' and you will see the window with all the fields in your data.


• Just select the desired field in order, you want to prepare report and copy it in a separate sheet if you want to create another report from the applied pivot table.

VLOOKUP

V lookup formula in excel is used to compare two separate set of data and retrieve any value on the basis of same control number/ text in both of the sheets. The formula can help you in preparing report from the million of records within few seconds. To apply the wonder, just follow following tips

• Sort the data in either way (ascending/ descending).


• Make sure that there is any common field in both set of data


• Apply V Lookup with the parameters given in guidance of the formula bar.
  

=VLOOKUP ( lookupvalue,table array,column index number, range lookup)

1. Lookup value means the value you want to look in the destination/ source data
   


2. Table array means range from which you want to retrieve value.



3. Column Index number means the number of column in which there is desired value. Count number from the column you select the range. If you are selecting range from column C then Column C will be '1' instead of '3'.

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Microsoft Excel 2007 Tips and Tricks for accounting Professionals

MS Excel 2007 application is widely being used in the organisations for data processing, financial modelling, data analysis,

Read More

Microsoft Excel 2007 Tips and Tricks for accounting Professionals

MS Excel 2007 application is widely being used in the organisations for data processing, financial modelling, analysis

Read More

Microsoft Excel 2007 Tips and Tricks for accounting Professionals

MS Excel 2007 application is widely being used in the organisations for data processing, financial modelling,

Read More

How to prepare Bank Reconciliation?

Bank reconciliation is one of the major accounting technique to reconcile the ledger with the bank's records. You may find it very difficult but the following tips will make your life happier within minutes.

Understand that there are two books in bank reconciliation.

1) Cash Ledger ( Company's record)

2) Bank Statement ( issued by company's bank)

In bank reconciliation, we try to match the amount of bank statement with our ledger or vice versa. The purpose of this is to make sure that all transactions posted or occurred are in the knowledge of the authorized personnel.

Format:

Balance as per Bank Statement ----------------------------xxxxxx

Add:

Deposit in transit xxxxxx

Bank Charges xxxxxx

Less:

Cheques not cleared yet (xxxxx)

Balance as per company's books xxxxxx

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Financial statement analysis is the process of obtaining information and understanding of the entity through its reported financial statements.

Financial statement analysis consists of

• Trend Analysis
• Ratio Analysis

Ratio analysis means computing relevant accounting ratios which may include asset turnover ratio, liquidity ratios and profitability ratios.

Trend analysis means comparing reported financial statements figures of one period with the comparative periods to know the differences. e g drop in sales by 13% due to market slump, increase by 15% in expense due to high inflation rates

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