basic bookkeeping terms sbdc
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Basic Bookkeeping Basic Bookkeeping Terms- Module 1Terms- Module 1
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Basic Bookkeeping TermsBasic Bookkeeping Terms
Basic Bookkeeping Basic Bookkeeping Terms- Module 1Terms- Module 1
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Basic Bookkeeping TermsBasic Bookkeeping Terms BASIC BOOKKEEPING TERMSBASIC BOOKKEEPING TERMS
MODULE 1MODULE 1
Mission: The mission of this module is to Mission: The mission of this module is to educate the participant in basic bookkeeping educate the participant in basic bookkeeping terms and to build a chart of accounts while terms and to build a chart of accounts while using any accounting software. using any accounting software.
Basic Bookkeeping Basic Bookkeeping Terms- Module 1Terms- Module 1
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Basic Bookkeeping TermsBasic Bookkeeping Terms Learning ObjectivesLearning Objectives
To understand & apply bookkeeping To understand & apply bookkeeping terms. terms.
To build & use the Chart of AccountsTo build & use the Chart of Accounts
Basic Bookkeeping Basic Bookkeeping Terms- Module 1Terms- Module 1
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Understand & Apply Understand & Apply Bookkeeping TermsBookkeeping Terms
Account Account Accrual basis *Accrual basis * Accounting Equations *Accounting Equations * Adjusting entriesAdjusting entries Account numbers Account numbers Assets *Assets * Accountant *Accountant * Accounting Accounting Accounts payable Accounts payable Accounts receivableAccounts receivable
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Basic Bookkeeping Basic Bookkeeping Terms- Module 1Terms- Module 1
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Accountant VS Accountant VS BookkeeperBookkeeper
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Basic Bookkeeping Basic Bookkeeping Terms- Module 1Terms- Module 1
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Accountant VS Accountant VS BookkeeperBookkeeper
Accountant – A person, whose profession is accounting, that classifies business transactions and interprets business transactions.
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Basic Bookkeeping Basic Bookkeeping Terms- Module 1Terms- Module 1
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Accountant VS Accountant VS BookkeeperBookkeeper
Bookkeeper – A person who earns his or her living by recording financial activities of a business and who is concerned with recording of transactions.
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Basic Bookkeeping Basic Bookkeeping Terms- Module 1Terms- Module 1
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Understand & Apply Understand & Apply Bookkeeping TermsBookkeeping Terms
Balance Sheet* Bank Reconciliation Bookkeeper* Capital* Cash* Cash Disbursement Journal Cash Receipts
Basic Bookkeeping Basic Bookkeeping Terms- Module 1Terms- Module 1
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Accruals VS CashAccruals VS Cash Accrual basis Accrual basis – An accounting system in which – An accounting system in which
revenue is recognized when earned and revenue is recognized when earned and expenses are recognized only when incurred. expenses are recognized only when incurred.
Basic Bookkeeping Basic Bookkeeping Terms- Module 1Terms- Module 1
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Accruals VS CashAccruals VS Cash Cash basis accountingCash basis accounting - An accounting - An accounting
method where receipts are recorded during the method where receipts are recorded during the period they are received, and expenses are period they are received, and expenses are recorded in the period in which they are recorded in the period in which they are actually paid. Cash accounting is one of the actually paid. Cash accounting is one of the two forms of accounting.two forms of accounting.
Basic Bookkeeping Basic Bookkeeping Terms- Module 1Terms- Module 1
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Understand & Apply Understand & Apply Bookkeeping TermsBookkeeping Terms
Charts of Accounts* Check Checking Account Closing Entry Corporations* Cost of Goods Sold
Basic Bookkeeping Basic Bookkeeping Terms- Module 1Terms- Module 1
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Understand & Apply Understand & Apply Bookkeeping TermsBookkeeping Terms
Credit* Creditors Current Assets Debit * Double-entry Accounting* Draw
Basic Bookkeeping Basic Bookkeeping Terms- Module 1Terms- Module 1
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Understand & Apply Understand & Apply Bookkeeping TermsBookkeeping Terms
Expense* Equity* Federal Unemployment Tax FICA Taxes Financial Statement* Fiscal Period Footing
Basic Bookkeeping Basic Bookkeeping Terms- Module 1Terms- Module 1
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Understand & Apply Understand & Apply Bookkeeping TermsBookkeeping Terms
Gross Pay General Journal General Ledgers Income Statement* Interest Journal Journalizing
Basic Bookkeeping Basic Bookkeeping Terms- Module 1Terms- Module 1
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Understand & Apply Understand & Apply Bookkeeping TermsBookkeeping Terms
Ledger Liabilities* Long-term Liabilities Net Income* Net Purchases Net Sales Opening Entry
Basic Bookkeeping Basic Bookkeeping Terms- Module 1Terms- Module 1
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Understand & Apply Understand & Apply Bookkeeping TermsBookkeeping Terms
Outstanding Checks Partnership* Payroll Accounting Payroll Register Payroll Tax Expense Payroll Expense Purchase Journal
Basic Bookkeeping Basic Bookkeeping Terms- Module 1Terms- Module 1
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Understand & Apply Understand & Apply Bookkeeping TermsBookkeeping Terms
Retained Earning Revenue* Salary Sales Discount Sales Journal Schedule of Accounts of Payable Schedule of Accounts of Receivable
Basic Bookkeeping Basic Bookkeeping Terms- Module 1Terms- Module 1
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Understand & Apply Understand & Apply Bookkeeping TermsBookkeeping Terms
Sole Proprietorships* State Unemployment Taxes Subsidiary Ledger “T” Accounts* Trail Balance
Basic Bookkeeping Basic Bookkeeping Terms- Module 1Terms- Module 1
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Build & Use The Chart Of AccountsBuild & Use The Chart Of Accounts
What is Chart of Accounts?What is Chart of Accounts? The Chart of Accounts (COA) is designed to The Chart of Accounts (COA) is designed to
mirror the accounting equation. The COA by mirror the accounting equation. The COA by definition is a list of accounts used by a definition is a list of accounts used by a business to define each class of items of which business to define each class of items of which money or its equivalent that is spent or money or its equivalent that is spent or received. The COA serves as a useful source received. The COA serves as a useful source for locating a given account within the ledger.for locating a given account within the ledger.
Basic Bookkeeping Basic Bookkeeping Terms- Module 1Terms- Module 1
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The Chart Of AccountsThe Chart Of Accounts The Accounting EquationThe Accounting Equation
The accounting equation is Assets = The accounting equation is Assets = Liabilities + Equity. Liabilities + Equity.
Example = $1,000 = $100 + $900Example = $1,000 = $100 + $900
Basic Bookkeeping Basic Bookkeeping Terms- Module 1Terms- Module 1
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The Chart Of AccountsThe Chart Of Accounts“T” Accounts“T” Accounts The Accounting EquationThe Accounting Equation
Basic Bookkeeping Basic Bookkeeping Terms- Module 1Terms- Module 1
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Preparing Chart Of Preparing Chart Of AccountsAccounts
When preparing the COA, the bookkeeper should know When preparing the COA, the bookkeeper should know the following:the following:
The Accounting EquationThe Accounting Equation Accrual or cash accountingAccrual or cash accounting AssetsAssets LiabilitiesLiabilities Equity or Capital Equity or Capital RevenuesRevenues ExpensesExpenses
Type of Company (non-profit, profit, service, retail)Type of Company (non-profit, profit, service, retail) Corporation, Partnership, Sole Owner, LLC, LLPCorporation, Partnership, Sole Owner, LLC, LLP
Basic Bookkeeping Basic Bookkeeping Terms- Module 1Terms- Module 1
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Preparing Chart of Preparing Chart of AccountsAccounts
Determine what basis the client is…Determine what basis the client is… Accrual basis Accrual basis – An accounting system in which – An accounting system in which
revenue is recognized when earned and revenue is recognized when earned and expenses are recognized only when incurred. expenses are recognized only when incurred.
Cash basis accountingCash basis accounting - An accounting method - An accounting method where receipts are recorded during the period where receipts are recorded during the period they are received, and expenses are recorded in they are received, and expenses are recorded in the period in which they are actually paid. Cash the period in which they are actually paid. Cash accounting is one of the two forms of accounting.accounting is one of the two forms of accounting.
Basic Bookkeeping Basic Bookkeeping Terms- Module 1Terms- Module 1
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What is in the Chart of What is in the Chart of AccountsAccounts
Assets – Property owned that hasAssets – Property owned that hasmonetary value. The total resources of a person ormonetary value. The total resources of a person orbusiness. business.
Types of Assets:Types of Assets: Accounts Receivable Accounts Receivable BuildingBuilding CarsCars CheckingChecking Money MarketsMoney Markets PropertyProperty
Basic Bookkeeping Basic Bookkeeping Terms- Module 1Terms- Module 1
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What is in the Chart of What is in the Chart of AccountsAccounts
Liabilities – Monies owed to outsiders Liabilities – Monies owed to outsiders
Types of liabilities:Types of liabilities: Accounts PayableAccounts Payable Loan PayableLoan Payable Note PayableNote Payable
Basic Bookkeeping Basic Bookkeeping Terms- Module 1Terms- Module 1
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What is in the Chart of What is in the Chart of AccountsAccounts
Equity or Capital Equity or Capital
Capital- Capital- InvestmentInvestment Withdrawals Withdrawals
Basic Bookkeeping Basic Bookkeeping Terms- Module 1Terms- Module 1
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Types of Companies that Types of Companies that require Chart of Accountsrequire Chart of Accounts
Type of Company (non-profit, profit, service, Type of Company (non-profit, profit, service, retail)retail)
Corporation, Partnership, Sole Owner, LLC, Corporation, Partnership, Sole Owner, LLC, LLPLLP Partnership – An association of two or more Partnership – An association of two or more
persons to carry on as co-owners of a business persons to carry on as co-owners of a business Sole Proprietorships – A business owned by one Sole Proprietorships – A business owned by one
person that is not incorporated person that is not incorporated
Basic Bookkeeping Basic Bookkeeping Terms- Module 1Terms- Module 1
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Another Component Another Component Needed for Chart of Needed for Chart of
AccountsAccountsRevenueRevenue is income net sales, other income (interest is income net sales, other income (interest income), cost of goods sold, and operating revenue. income), cost of goods sold, and operating revenue. Revenue’s normal balance is found on the credit side Revenue’s normal balance is found on the credit side (right) of the “T” account. (right) of the “T” account.
Types of Revenue:Types of Revenue: Rent ExpenseRent Expense InterestInterest Income Income Limousine RentalLimousine Rental Insurance Income Insurance Income Consulting FeesConsulting Fees
Basic Bookkeeping Basic Bookkeeping Terms- Module 1Terms- Module 1
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Components Needed for Components Needed for Chart of AccountsChart of Accounts
Expense: Expense: The expenses are classified as all the The expenses are classified as all the expenses that are ordinary and necessary for the expenses that are ordinary and necessary for the business. The normal balance for the expenses is business. The normal balance for the expenses is found on the debit side (left) of the “T” account. found on the debit side (left) of the “T” account.
Types of Expenses:Types of Expenses: Telephone ExpenseTelephone Expense Rent ExpenseRent Expense Interest ExpenseInterest Expense Insurance ExpenseInsurance Expense
Basic Bookkeeping Basic Bookkeeping Terms- Module 1Terms- Module 1
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Activity for Chart of Activity for Chart of AccountsAccounts
Prepare a Chart of Accounts for an Prepare a Chart of Accounts for an Accounting Consulting Corporation/Accrual Accounting Consulting Corporation/Accrual
Accounting Accounting Bank of America/Checking AccountsBank of America/Checking Accounts No Employees No Employees Line of CreditLine of Credit 2 Buildings2 Buildings 1 Company Car1 Company Car Revenue Taxes Revenue Taxes Consulting FeesConsulting Fees
Basic Bookkeeping Basic Bookkeeping Terms- Module 1Terms- Module 1
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Activity for Chart of Activity for Chart of AccountsAccounts
AssetsAssets Current AssetsCurrent Assets Bank of America/Checking AccountsBank of America/Checking Accounts Accounts Receivables Accounts Receivables Company CarCompany Car Long-Term AssetsLong-Term Assets
Building #1Building #1 Building #2Building #2
Basic Bookkeeping Basic Bookkeeping Terms- Module 1Terms- Module 1
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Activity for Chart of Activity for Chart of AccountsAccounts
Liability Liability Current LiabilityCurrent Liability Line of CreditLine of Credit Accounts PayableAccounts Payable
Capital Capital InvestmentsInvestments Retained Earnings Retained Earnings
Basic Bookkeeping Basic Bookkeeping Terms- Module 1Terms- Module 1
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Activity for Chart of Activity for Chart of AccountsAccounts
RevenueRevenue Tax Preparation Tax Preparation Consulting Consulting
ExpensesExpenses TelephoneTelephone Interest ExpenseInterest Expense Office Supplies Office Supplies Meals ExpensesMeals Expenses Insurance Insurance
Basic Bookkeeping Basic Bookkeeping Terms- Module 1Terms- Module 1
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Activity for Chart of Activity for Chart of AccountsAccounts
Basic Bookkeeping Basic Bookkeeping Terms- Module 1Terms- Module 1
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Fill in the BlankFill in the Blank
Assets are found on the Assets are found on the ________ Financial Statement.________ Financial Statement.
Debits are usually on the _____ Debits are usually on the _____ side of the “T” account.side of the “T” account.
Basic Bookkeeping Basic Bookkeeping Terms- Module 1Terms- Module 1
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Fill in the BlankFill in the Blank Credits are found on the ______ side of Credits are found on the ______ side of
the “T” accounts.the “T” accounts.
Basic Bookkeeping Basic Bookkeeping Terms- Module 1Terms- Module 1
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Fill in the BlankFill in the Blank
Define the accounting equation:Define the accounting equation:
Describe chart of accounts:Describe chart of accounts:
Basic Bookkeeping Basic Bookkeeping Terms- Module 1Terms- Module 1
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Basic Bookkeeping Basic Bookkeeping Answers Answers
Slide 17-Balance SheetSlide 17-Balance Sheet -Left Side-Left SideSlide 18-Rigth SideSlide 18-Rigth SideAssets=liabilities + OEAssets=liabilities + OEChart of AccountsChart of Accounts
Basic Bookkeeping Basic Bookkeeping Terms- Module 1Terms- Module 1
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Basic Bookkeeping TermsBasic Bookkeeping Terms
Summary Summary
Questions?????????????Questions?????????????
Basic Bookkeeping Basic Bookkeeping Terms- Module 1Terms- Module 1
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Basic Bookkeeping TermsBasic Bookkeeping Terms
Basic Bookkeeping Basic Bookkeeping Terms- Module 1Terms- Module 1
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Basic Bookkeeping TermsBasic Bookkeeping Terms
Anita R Johnson, Financial Psychologist Anita R Johnson, Financial Psychologist