Book-Keeping
Made Simple
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Book-Keeping Made Simple, Revised Edition covers all the basic principles of elementary book-keeping. The book describes the requirements and process of starting a business, including ledger accounts, classifying the assets, the balance sheet, buying assets, and transactions involving liabilities. The text also discusses the double-entry systems; subsidiary books and original documents; the reduction of work-on day book entries; and the three-column cash books. The journal proper, the Imprest system, the trial balance and its limitations, and the bank reconciliation statements are also considered. The book further tackles analytical or columnar day books; the principle and layout of the cash book; the adjustments in final accounts; and partnership accounts. The text also discusses departmental-, manufacturing-, and control accounts and accounts of limited companies; the amalgamation of businesses; the purchase of a business; and the bills for exchange. Students of book-keeping will find the book invaluable.
Table of Contents
Foreword
1 Starting a Business - A Capital Idea
1.1 Starting a Business
1.2 Business Transactions
1.3 Keeping a Record of Transactions - The Ledger Accounts
1.4 The First Transaction - The Contribution of the Assets by the Proprietor
1.5 Classifying the Assets - Current and Fixed
1.6 Opening the Ledger
1.7 The Balance Sheet - and an Oddity of History
1.8 Buying Assets for Use in the Business
1.9 Transactions Involving Liabilities
1.10 Classification of Liabilities - Current Liabilities, Long-Term Liabilities, and Capital
1.11 Buying Assets on Credit and Borrowing Money
1.12 A Page to Test You on Capital, Assets, and Liabilities
1.13 Answers to Exercises in Book-Keeping Made Simple
1.14 Opening Balance Sheets
1.15 Exercises Set 1.1 - Opening Balance Sheets
2 The Ledger - The Main Book of Account
2.1 Introduction
2.2 Use of the Accounts
2.3 The Three Types of Account
2.4 How to Keep a Ledger Account
2.5 Personal Accounts - Debtors
2.6 Exercises Set 2.1 - Simple Debtors' Accounts
2.7 Personal Accounts - Creditors
2.8 Exercises Set 2.2 - Simple Creditors' Accounts
2.9 Real Accounts - Accounts That Record Assets
2.10 Folio Numbers
2.11 The Busiest Real Accounts - The Cash Account and the Bank Account
2.12 Double Entry Book-Keeping
2.13 Folio Numbers and Double Entry Book-Keeping
2.14 Exercises Set 2.3 - Simple Cash Accounts
2.15 The Bank Account
2.16 Exercises Set 2.4-Simple Bank Accounts
2.17 Nominal Accounts - Accounts That Record Losses and Profits
2.18 'Continuous Balance'Ledger Accounts
2.19 Exercises Set 2.5-Continuous Balance Accounts
2.20 A Page to Test You on the Ledger
3 How Double Entry Book-Keeping Works
3.1 The Double Entry System
3.2 The Original Documents (1)
3.3 The Books of Original Entry (2)
3.4 Posting the Day Books to the Ledger (3)
3.5 The Trial Balance (4)
3.6 Final Accounts - The Trading Account (5a)
3.7 Final Accounts - The Profit and Loss Account (5b)
3.8 The Balance Sheet (5c)
3.9 Computerization of Book-Keeping
4 Subsidiary Books and Original Documents
4.1 Introduction
4.2 The Pattern of Business in an Established Trading Firm
4.3 Documents for Sales and Purchases - The Invoice
4.4 Cash Discounts, Settlement Discounts and Trade Discounts
4.5 The Debit Note - A Document Very Like an Invoice
4.6 Value Added Tax and Invoices
4.7 The Purchases Day Book
4.8 Posting the Purchases Day Book to the Ledger
4.9 Exercises Set 4.1 - The Purchases Day Book
4.10 Invoices for Services - The Expenses Journal or Expenses Day Book
4.11 The Sales Day Book
4.12 Posting the Sales Day Book into the Ledger
4.13 How to 'Carry Forward' from One Page to the Next
4.14 Exercises Set 4.2 - The Sales Day Book
4.15 Documents for Returns - The Credit Note
4.16 The Purchases Returns Book
4.17 Posting the Purchases Returns Book into the Ledger
4.18 Exercises Set 4.3 - The Purchases Returns Book
4.19 The Sales Returns Book
4.20 Posting the Sales Returns Book into the Ledger
4.21 Exercises Set 4.4 - The Sales Returns Book
4.22 Recapitulation
4.23 A Page to Test You on the Journals
4.24 A Page to Test You on Invoices and Debit Notes
4.25 A Page to Test You on Credit Notes
5 Reducing the Work on Day Book Entries
5.1 Saving Work on the Day Books
5.2 Using the Documents Themselves as Day Books
5.3 Slip Systems of Book-Keeping
5.4 Simultaneous Records
5.5 How Book-Keeping Records are Computerized
5.6 Exercises Set 5.1 - Saving Work on the Day Books
6 The Three-Column Cash Book
6.1 Introduction
6.2 Cashiers, Bound Books, and Fidelity Bonds
6.3 Why Have a Three-Column Cash Book?
6.4 Original Documents for the Three-Column Cash Book
6.5 Explanation of the Three-Column Cash Book - Including Contra Entries
6.6 VAT and the Three-Column Cash Book
6.7 Posting the Three-Column Cash Book to the Ledger
6.8 Why Do the Discount Figures, When They are Posted, Not Cross Over to the Other Side?
6.9 Bank Overdrafts
6.10 Exercises Set 6.1 - The Three-Column Cash Book
6.11 A Page to Test You on the Three-Column Cash Book
6.12 A Page to Test You on Statements and Receipts
6.13 A Page to Test You on Discounts
7 The Journal Proper
7.1 Introduction
7.2 Journal Proper Paper
7.3 Journal Entries No. 1 - The Opening Journal Entry
7.4 Exercises Set 7.1 - Opening Journal Entries
7.5 Journal Entries No. 2 - Closing Entries
7.6 Journal Entries No. 3 - Purchases of Assets
7.7 Exercises Set 7.2 - Purchases of Assets
7.8 Journal Entries No. 4 - Depreciation of Assets
7.9 Exercises Set 7.3 - Depreciation of Assets
7.10 Journal Entries No. 5 - The Sale of Worn-out Assets
7.11 Exercises Set 7.4 - The Sale of Worn-Out Assets
7.12 Journal Entries No. 6 - Simple Bad Debts
7.13 Exercises Set 7.5 - Simple Bad Debts
7.14 Journal Entries No. 7 - The Correction of Errors
7.15 Exercises Set 7.6 - The Correction of Errors
7.16 Journal Entries No. 8 - Dishonored Checks
7.17 Exercises Set 7.7 - Dishonored Checks
7.18 Journal Entries No. 9 - Bank Loans, Interest, and Charges
7.19 Exercises Set 7.8 - Bank Loans, Interest, and Charges
7.20 VAT in Cash Takings
7.21 Exercises Set 7.9 - Exercises on VAT in Cash Takings
8 The Columnar Petty Cash Book - Imprest System
8.1 Introduction
8.2 The Imprest System
8.3 Original Documents - The Petty Cash Voucher
8.4 The Columnar Petty Cash Book
8.5 A Page to Test You on the Petty Cash Book
8.6 Exercises Set 8.1 - The Petty Cash Book
9 Book-Keeping to the Trial Balance
9.1 Introduction
9.2 What is Involved in Book-Keeping to the Trial Balance?
9.3 Tidying up the Ledger Accounts and Extracting a Trial Balance
9.4 How to Keep a Sole Trader's Books for One Month and Check for Accuracy
9.5 What to Do if a Trial Balance Does Not Agree
9.6 A Specimen Exercise to the Trial Balance
9.7 Exercises Set 9.1 - Book-Keeping to the Trial Balance
10 Limitations of the Trial Balance: Suspense Accounts and the Correction of Errors
10.1 Introduction
10.2 Errors That the Trial Balance Does Not Disclose
10.3 Suspense Accounts and the Correction of Errors
10.4 A Page to Test You on the Trial Balance
10.5 Exercises Set 10.1. Trial Balances and Suspense Accounts
11 Bank Reconciliation Statements
11.1 Introduction - The Meaning of Reconciliation
11.2 Why Do the Cash Book Figure and the Bank's Figure Disagree?
11.3 How to Draw up a Bank Reconciliation Statement
11.4 Exercises Set 11.1-Bank Reconciliation Statements
12 Analytical or Columnar Day Books
12.1 Introduction
12.2 Columnar Sales and Purchases Rulings
12.3 Posting the Totals of an Analysis Book
12.4 Computerized Analysis of Retail Trade
12.5 Exercises Set 12.1 - Analysis Day Books
13 The Bank Cash Book
13.1 Introduction
13.2 The Principle of the Bank Cash Book
13.3 Layout of the Bank Cash Book
13.4 The Cash Book as a Book of Original Entry
13.5 Exercises Set 13.1 - The Bank Cash Book
14 More about Depreciation
14.1 A 'True and Fair View' of the Assets
14.2 The Equal Installment, or Straight Line, Method
14.3 The Diminishing Balance Method
14.4 The Revaluation Method
14.5 Providing for the Replacement of an Asset
14.6 Leases - A Special Case of the Straight-Line Method
14.7 Exercises Set 14.1 - Depreciation
15 The Wages Book and Wages Systems
15.1 Introduction
15.2 Wages Calculations
15.3 Exercises Set 15.1 - Simple Wages Calculations
15.4 The Traditional Wages Book
15.5 Exercises Set 15.2 - Simple Wages Books
15.6 The Kalamazoo Wages System
15.7 Exercises Set 15.3 - The Kalamazoo Wages System
15.8 Wages and the Bank Giro Credit System
16 Book-Keeping to 'Final Accounts' - Part One: The Trial Balance
16.1 Introduction - What are Final Accounts?
16.2 A Closer Look at the Trial Balance
16.3 Causes of Confusion in the Trial Balance
16.4 Exercises Set 16.1 - The Trial Balance
17 Book-Keeping to 'Final Accounts' - Part Two: The Trading Account
17.1 The Profit on a Simple Transaction
17.2 Final Accounts and Closing Journal Entries
17.3 The True Sales Figure
17.4 The True Purchases Figure
17.5 Finding the Cost of the Sales
17.6 Some Definitions Connected with the Trading Account
17.7 Exercises Set 17.1 - Trading Accounts
18 Book-Keeping to 'Final Accounts' - Part Three: The Profit and Loss Account
18.1 A Revised Trial Balance
18.2 Finding the Net Profit - Stage I: Transferring the Losses
18.3 Finding the Net Profit - Stage II: Transferring the Profits
18.4 Closing the Profit and Loss Account and the Drawings Account
18.5 A Trading and Profit and Loss Account
18.6 Exercises Set 18.1 - Profit and Loss Accounts
19 Book-Keeping to 'Final Accounts' - Part Four: The Balance Sheet
19.1 The Residue of the Trial Balance
19.2 History Makes a Mess of Things - The Balance Sheet Reversed
19.3 The Order of Permanence and the Order of Liquidity
19.4 For Which Type of Business is Each Method Suitable?
19.5 Book-Keeping to Final Accounts
19.6 Exercises Set 19.1 - Simple Final Accounts
20 Capital and Revenue Expenditure and Receipts
20.1 Introduction
20.2 Capital and Revenue Expenditure Defined
20.3 Capital and Revenue Receipts
20.4 The Revenue Account
20.5 The Importance of Distinguishing between the Two Types of Expenditure and Receipts
20.6 The Rules with Capital and Revenue Items
20.7 The Capitalization of Revenue Expenditure
20.8 Revenue Expenses That Show up as Reduced Stock
20.9 Exercises Set 20.1 - Capital and Revenue Expenditure
21 The Valuation of Stock
21.1 Introduction - The Importance of Correct Stock Valuation
21.2 The Basis of Stock Valuation
21.3 Stock Records
21.4 Stock-Taking at the End of the Financial Year
21.5 A Stock Valuation Question
21.6 Delays in Stock-Taking
21.7 Burglaries, Floods and Fires
21.8 Exercises Set 2 1.1 - Stock Valuation
22 Adjustments in Final Accounts
22.1 Introduction - Why are Adjustments Necessary?
22.2 Payments in Advance by the Firm
22.3 Payments in Advance to the Firm
22.4 Exercises Set 22.1 - Payments in Advance
22.5 Accrued Expenses Owed by the Firm
22.6 Accrued Receipts Due to the Firm
22.7 Exercises Set 22.2 - Accrued Expenses and Accrued Receipts
22.8 Exercises Set 22.3 - Final Accounts Exercises with Payments in Advance and Accrued Expenses
22.9 Bad Debts
22.10 Provision for Bad Debts
22.11 What Happens to Provision for Bad Debts in the Next Year?
22.12 Exercises Set 22.4 - Bad Debts and Provision for Bad Debts
22.13 Provisions for Discounts
22.14 Depreciation of Assets
22.15 Goodwill, and Depreciation of Goodwill
22.16 Exercises Set 22.5 - Final Accounts with All Types of Adjustment
23 Partnership Accounts
23.1 Introduction - Why Take a Partner?
23.2 The Partnership Act of 1890
23.3 The Partnership Deed
23.4 The Capital of the Partnership
23.5 The Final Accounts of a Partnership Business
23.6 The Appropriation Account of a Partnership
23.7 Exercises Set 23.1 - The Appropriation Account
23.8 The Current Accounts of the Partners
23.9 Exercises Set 23.2 - Current Accounts of Partners
23.10 The Balance Sheet of a Partnership
23.11 Exercises Set 23.3 - The Final Accounts of Partnerships
24 The Accounts of Clubs and Non-Profit-Making Organizations
24.1 Non-Profit-Making Organizations
24.2 The Cash Book of a Club
24.3 The Receipts and Payments Account
24.4 Exercises Set 24.1 - Receipts and Payments Accounts
24.5 Limitations of the Receipts and Payments Account
24.6 The Accumulated Fund of a Club
24.7 Trading Accounts of Clubs
24.8 The Income and Expenditure Account
24.9 Exercises Set 24.2 - Club Final Accounts
25 The Increased Net-Worth Method of Finding Profits: Single Entry or Incomplete Records
25.1 Introduction
25.2 Profit as an Increase in Net Worth
25.3 Calculating the Profits by the Increased Net-Worth Method
25.4 Adjustments with the Increased Net-Worth Method
25.5 Exercises Set 25.1 - Finding Profits by the Increased Net-Worth Method
25.6 Unsatisfactory aspects of the Increased Net-Worth Method
25.7 Producing a Full Set of Final Accounts from Incomplete Records
25.8 Exercises Set 25.2 - Producing a Full Set of Final Accounts from Incomplete Records
26 Departmental Accounts
26.1 Introduction
26.2 Departmental Accounts - The Basic Figures
26.3 A Set of Departmental Final Accounts
26.4 Exercises Set 26.1 - Departmental Accounts
27 Manufacturing Accounts
27.1 Introduction
27.2 The Vocabulary of Manufacturing Accounts
27.3 The Preparation of Manufacturing Accounts
27.4 Taking Manufacturing Profit into Account
27.5 Break-Even Analysis
27.6 Exercises Set 27.1 - Manufacturing Accounts
28 The Accounts of Limited Companies
28.1 Introduction - What is a Limited Company?
28.2 Special Features of Company Accounts
28.3 The Appropriation Account of a Limited Company
28.4 The Balance Sheet of a Limited Company
28.5 Exercises Set 28.1 - Limited Company Accounts
29 The Interpretation of Final Accounts: Statistical Control Figures
29.1 Introduction - Controlling a Business
29.2 The Gross Profit Percentage
29.3 Gross Profit Percentage on Cost
29.4 Absolute and Relative Changes
29.5 Exercises Set 29.1 - Gross Profit Percentage
29.6 The Net Profit Percentage
29.7 Exercises Set 29.2 - Gross and Net Profit Percentages
29.8 Turnover and Rate of Turnover, or Rate of Stock Turnover
29.9 Exercises Set 29.3 - Rate of Stock Turnover
29.10 Terminology Used in the Interpretation of the Balance Sheet
29.11 Appraising a Balance Sheet
29.12 Cashflow
29.13 Exercises Set 29.4-Balance Sheet Interpretation, and General Questions on the Interpretation of Final Accounts
30 Control Accounts
30.1 Introduction
30.2 The Sub-Division of the Ledger
30.3 Control Accounts - The Basic Idea
30.4 Where Do We Get the Total Figures Tor the Control Accounts?
30.5 A Simple Control Account
30.6 The Accountant Who is Wrong
30.7 Exercises Set 30.1 - Simple Control Accounts
30.8 Contra Entries in Control Accounts
30.9 Exercises Set 30.2 - More Difficult Control Accounts
31 The Amalgamation of Businesses
31.1 Introduction
31.2 Drawing up the Statements of Affairs on Amalgamation
31.3 Amalgamating the Two Businesses
31.4 Exercises Set 31.1 - Amalgamations
32 The Purchase of a Business
32.1 Introduction
32.2 The Purchase Price and the Goodwill Figure
32.3 Opening the Accounts of the New Business
32.4 Exercises Set 32.1 - Purchase of a Business
33 Accounting for Bills of Exchange
33.1 What is a Bill of Exchange?
33.2 The Use of Bills of Exchange
33.3 Recording Bills of Exchange 1 - Recording Bills Payable
33.4 Recording Bills of Exchange 2 - Recording Bills Receivable
33.5 More about Bills Receivable
33.6 Dishonored Bills
33.7 Exercises Set 33.1 - Accounting for Bills of Exchange
34 The Concepts and Principles of Accounting
34.1 The Philosophy of Accounting
34.2 The Concept of Business Entity
34.3 The 'Going Concern' Concept
34.4 The Duality Concept
34.5 Substance and Materiality
34.6 The Objectivity Concept
34.7 The Consistency Concept
34.8 The Prudence Concept in Accounting
34.9 The Accruals Concept
34.10 The Stable-Money Concept
34.11 The Distinction between Capital and Revenue Expenditure
34.12 Exercises Set 34.1 - The Concepts and Principles of Accounting
34.13 Conclusion about Double-Entry Book-Keeping
Answer Section
Index
Product details
- No. of pages: 558
- Language: English
- Copyright: © Made Simple 1987
- Published: July 6, 1987
- Imprint: Made Simple
- eBook ISBN: 9781483105802