ACCOUNTING

I am thinking of writing about a book that focuses on Finance in Accounting!...hmmm...

WHY YOU SHOULD LEARN ABOUT ACCOUNTING....

Hello friend. How are you? I hope all is well with you. Today I decided to take a closer look at accounting. What is its importance? Why need accounting knowledge?

Accounting plays a dynamic role in the success of any business enterprise. A business unit, for example an online women’s store, started by its owners to increase their wealth by making some business transactions. These transactions may be of diversified nature e.g. retail or wholesale trade, import and export of goods, selling of goods and services on the internet. All these transactions involve the process of purchase and sale of goods against any money consideration. There are three main types of business enterprise. These are;

-Sole proprietor

-Partnership

-Limited Liability Company

Every business enterprise is treated as a separate entity from its owners for accounting purposes. Accounting principles are applied by all these business enterprises to achieve their objectives. The main functions of accounting include the following:-

I. Confirmation or Verification of Profit and Loss; the main purpose of any business is to make a profit. Unless you are a weirdo or just doing it for charity; which is very unlikely….i think. Anyway, for this purpose, accurate and complete recording of all business transactions is essential because this information will be helpful to determine whether there was a profit or loss in any trading period. No business can survive in the long period without making considerable profits.

II. Facilitation of credit transactions; Most of the business transactions are made on credit basis. In this case, goods are purchased or sold without cash payment. These transactions are made on the basis of promises to make payments in future. Without credit transactions, business cannot be expanded beyond certain limits. If goods are purchased from a supplier on credit basis then the supplier is known as the creditor. Similarly, if goods are sold to a customer on credit then this customer is known as the debtor. Accounting records facilitate such credit transactions because these records will determine the amounts due to the creditors and due to the debtors.

III. Tax assessment; Taxes are imposed by the government in all countries. These taxes can be classified as income tax, excise tax and custom duty. For the accurate assessment of tax, accounting records must be maintained properly, otherwise, a business enterprise may be required to pay high tax to the government.

IV. Evaluation Of Assets and Liabilities; Every business enterprises has some assets and liabilities. Assets mean the possessions of business and liabilities are those amounts which are due to other persons. A statement of assets and liabilities can be prepared on any particular date which is known as the balance sheet.

If a business enterprise needs some loan from any bank or any other financial institution then this balance sheet is required by the prospective creditors. Similarly, this balance sheet will be required by the prospective investors or buyers on any business enterprise before making any decision.

V. A tool for control; a business enterprise can maximise its profit by increasing the gap between income and expenses. Proper control on unnecessary expenses and misappropriation of funds is essential. A proper and accurate accounting system will be helpful to maintain this control.

VI. A foundation n for further planning; For the further explanation for any business, a business enterprise can formulate its own plans on the basis of present and past achievements. Accounting records can provide sufficient data relating to sales, profit, investments etc for making decisions about the future programmes.

That is all for today friend. See you soon and have a nice day!

WHY YOU SHOULD LEARN ABOUT ACCOUNTIN G....

Hello friend. How are you? I hope all is well with you. Today I decided to take a closer look at accounting. What is its importance? Why need accounting knowledge?

Accounting plays a dynamic role in the success of any business enterprise. A business unit, for example an online women’s store, started by its owners to increase their wealth by making some business transactions. These transactions may be of diversified nature e.g. retail or wholesale trade, import and export of goods, selling of goods and services on the internet. All these transactions involve the process of purchase and sale of goods against any money consideration. There are three main types of business enterprise. These are;

-Sole proprietor

-Partnership

-Limited Liability Company

Every business enterprise is treated as a separate entity from its owners for accounting purposes. Accounting principles are applied by all these business enterprises to achieve their objectives. The main functions of accounting include the following:-

I. Confirmation or Verification of Profit and Loss; the main purpose of any business is to make a profit. Unless you are a weirdo or just doing it for charity; which is very unlikely….i think. Anyway, for this purpose, accurate and complete recording of all business transactions is essential because this information will be helpful to determine whether there was a profit or loss in any trading period. No business can survive in the long period without making considerable profits.

II. Facilitation of credit transactions; Most of the business transactions are made on credit basis. In this case, goods are purchased or sold without cash payment. These transactions are made on the basis of promises to make payments in future. Without credit transactions, business cannot be expanded beyond certain limits. If goods are purchased from a supplier on credit basis then the supplier is known as the creditor. Similarly, if goods are sold to a customer on credit then this customer is known as the debtor. Accounting records facilitate such credit transactions because these records will determine the amounts due to the creditors and due to the debtors.

III. Tax assessment; Taxes are imposed by the government in all countries. These taxes can be classified as income tax, excise tax and custom duty. For the accurate assessment of tax, accounting records must be maintained properly, otherwise, a business enterprise may be required to pay high tax to the government.

IV. Evaluation Of Assets and Liabilities; Every business enterprises has some assets and liabilities. Assets mean the possessions of business and liabilities are those amounts which are due to other persons. A statement of assets and liabilities can be prepared on any particular date which is known as the balance sheet.

If a business enterprise needs some loan from any bank or any other financial institution then this balance sheet is required by the prospective creditors. Similarly, this balance sheet will be required by the prospective investors or buyers on any business enterprise before making any decision.

V. A tool for control; a business enterprise can maximise its profit by increasing the gap between income and expenses. Proper control on unnecessary expenses and misappropriation of funds is essential. A proper and accurate accounting system will be helpful to maintain this control.

VI. A foundation n for further planning; For the further explanation for any business, a business enterprise can formulate its own plans on the basis of present and past achievements. Accounting records can provide sufficient data relating to sales, profit, investments etc for making decisions about the future programmes.

That is all for today friend. See you soon and have a nice day!

TEAMING AND LADDING

Hello friend! I hope you are doing well. Today I am going to talk about teaming and lading in accounting. In one of the articles I have previously written, I mentioned these terms. So what is teaming and lading? 

 

I.                   It is a type of fraud. Yes, a type of fraud. Why do I say this? It is because it is usually done by the cashier in an organisation.

II.                It takes place in an organisation with many debtors in its accounts.

III.             So how does this type of fraud take place? I will give you an illustration using an example; If XYZ limited has the following debtors, namely; Wanjiru & Company, Smith & Company and Otieno & Company. When Wanjiru & Company brings in money for clearing a debt it has with or owes the organisation, the cashier will not record that amount as paid in the accounts. She or he will take that amount of money and use it for his or herself. When Smith & Company also comes and brings an amount of money to pay off the debt it has with the same organization, the cashier will take this amount and use it to reduce the amount owed by Wanjiru & Company. When Otieno & Company also comes to pay their debt off in the same organisation, the cashier will use this amount to reduce the debt owed by Smith & Company. Therefore there will always be a gap in the book of accounts because the cashier had misappropriated the funds.

 

That is it for today! I hope you did find this information helpful. Thank you and come again!

USES OF A CREDIT NOTE IN ACCOUNTING

 Hello friend...i hope you are doing well. Today i am going to teach you about the uses of a credit note in accounting. Credit notes are a type of source documents in accounting. I hope it will shed more light on the same. This document is used to reduce overcharge. An overcharge is where the invoice had been overstated either by the creditor or the seller. There are different types of credit notes. These include;

I. Outgoing credit note; this is used to reduce credit sale made to the creditors. It is issued when goods sold on credit to the debtors are returned by them. This implies that the amount owed by the debtors to the organization is reduced. Outgoing credit notes are recorded on sales returned inward book.

II. Incoming credit note; This is issued by the creditors to the business. When you purchase goods on credit from the suppliers then some of the goods are returned by you to the supplier, then the amount that you are supposed to pay the supplier is reduced. This is done by the supplier on issue of a credit note. Lastly, all the incoming credit note is recorded on the purchases return day book.

I hope that information was of use to you...Have a nice day!

Uses Of Source Documents In Accounting

Hello friend, today we are going to learn all about source documents. I hope this article will be of help to you. What are source documents? Source documents are the documents which provide accounting information. Some of the examples of source documents are;

1. Invoice; an invoice is a document which gives the quarterly, quality unit price and amount of the items dispatched or received. It also gives the discount allowed and transport charges.

There are different kinds of invoices. These include;

I. Incoming invoices; these are invoices that are received from creditors. That is when goods are purchased on credit; they must be issued by the supplier.

II. Outgoing invoices; these are invoices that are sent to the debtor for example if the organisation has sold their goods on a credit basis.

What are the importances of invoices? You may ask.

I. Outgoing invoices help the customers check if the goods delivered to him/her are the ones indicated in the invoice.

II. It helps when writing a sales daybook.

III. In case of conflict between the debtor and the organisation, it can be used to resolve such since the carbon copy is sent to the debtor.

Incoming invoices on the other hand help in writing a purchase day book. It also helps to check if goods received are the ones in the invoice. What is a purchase day book? You may ask. This is where purchases made on credit during a particular day are recorded. On the other hand, a sales book is where credit sales made during a particular day are recorded.

2. The second type of source document is called a cash sale.

-It is a document issued by the seller to the buyer.

-It gives the description of goods bought, their prices and total amount paid.

- It also contains the name and address of the seller. These cash sales are also known as cash receipts.

There are two kinds of cash receipts;

I. Incoming cash receipts- These are received from the seller or creditor.

II. Outgoing cash receipts- These are used and given to the customers or purchases of goods.

That’s it for today. I hope the article was of help. Have a nice day!

10 Things to Make your Meetings Exciting

The boss walks in your office and casually asks you to increase sales by 20% and he has given you three days to complete the task. You are a little surprised by the request but you gladly accept the assignment. Before he leaves your office he asks you to cut the cost of doing business by 30%. He has kindly given you five days to complete the task. Some may be horrified by the assignments but you smile and tell your boss you will give it your best effort. Later in the day, he walks back in your office and says something that's frightening. You begin to sweat. He has asked you to do something that's almost impossible. He has asked you to make the next company meeting exciting. He can hear you gasping. You want to scream 'Please give this assignment to someone else. You want to shout That's an out of this world task. You calm down, find some courage and boldly take the assignment. You can't think small. Handing out hats won't be sufficient. Telling a cute story won't be enough. Here are 10 things you can do to keep a meeting exciting:

1.  Announce to the group that during the meeting you will be mentioning three things that are not true. Inform the attendees the untrue remarks might be personal or about business. The people who come up with the three incorrect comments partake in a raffle and the winner receives a free dinner for two at a posh restaurant or perhaps they get Friday off with pay. People will be intently listening and it will add some fun to the meeting.

2.  Have the CEO of the company enter the meeting and gladly refill coffee cups and water glasses. Perhaps he's wearing a tuxedo. He offers people a pillow for their chairs. The CEO provides tasty snack to the attendees. He passes out teddy bears to everyone. The CEO enters the meeting several times and doesn't say a word. This will create anticipation and smiles. 

3.  Hire a temporary employee to bring in numerous boxes, one at a time and stack them in a corner. If someone gets curious and asks you whats in the boxes tell him you can't talk about it until the meeting is over. Have the temporary employee shake his head as he leaves the room and ask you Are you sure you want these boxes in here? Contemplate for a little bit and say I think so. For added excitement have an alarm go off in one of the boxes. Get up, grab the alarm clock and without people noticing, set it ring in 10 minutes. Repeat the process several times. At the end of the meeting open the boxes and pull out some tasty snacks or gift certificates for the attendees.

4.  Have an employee occasionally enter the meeting room and ask you . Have you told them yet? Answer .No I have not. This will make the employees curious and alert. Each time he walks in the room he wears a different color tie. At the end of the meeting ask the employees to write down the colors of ties he wore. The people who correctly write down the colors of ties win a prize. 

 5.  Throughout the meeting ask everyone to perform an outrageous task that must be completed by the next meeting. For example, ask the manager of the advertising department to obtain free advertising for the company on national television. If they respond in disbelief simply say . You heard me. Everyone will wonder what outrageous assignment will be tossed their way during the meeting and the anticipation will add some excitement to the meeting. 

6.  Hire a comedian to sit in the meeting and take notes. Frequently ask him to repeat comments that the attendees have made. Have him intentionally misquote them. The incorrect quotes cause the attendees to seem arrogant, rude, silly, selfish etc. For example, My intelligence is simply astonishing. Have the comedian misquote a response a timid employee made to one of your comments, Boss, that's outrageous and I simply won't allow it. Smile and the group will laugh.

7.  Hire a singer to attend the meeting. Inform the group the new employee was highly recommended by an employment agency and will be a great asset to the company. Whenever you ask him questions he responds by singing answers in different music styles; perhaps with a country music slant or hip hop. Simply shake your head after he sings.

8.  Have an artist sit in the room and make caricature portraits of attendees of the meeting. Keeping the portraits a mystery until the end of the meeting will add some excitement. Let the employees place their portrait in their office or take it home to show their family and friends.

9.  Inform the attendees there will be a quiz on the content of the meeting. The person who has the most correct answers wins a desirable prize. The employees will be paying more attention during the meeting.

10.  Without informing the attendees of the upcoming quiz, sprinkle famous quotes from movies into the meeting. Place the quotes in awkward situations in order to make the employees curious about the use of the movie quotes. Whoever writes down the most quotes that are accompanied by the correct movie wins a prize.

 Don't just have a goal to make the meeting interesting or appealing; make the meeting exciting. The employees will appreciate your effort and it will create a wonderful rapport with the employees. Be innovative once in awhile and you will have a happier office. Even as an accountant.

How To Establish Influence.

Hey people, sorry for taking so long before posting an article. I had taken a short break to travel back upcountry to see my parents. Anyway, i am back now! On to serious business now. I found this really interesting article on how to establish influence, that i think is essential to know, even for an accountant!

Pre-Meeting Interaction
Your ability to influnece others is directly tied to what they think of you. The bottom line is this: if people like you, you will be able to change minds; if people do not like you, you will not be able to influence them. What are some ways to get people to like you?

• Don't complain about anything or criticize anyone. The easiest way to help people get comfortable with you is to have a pleasant attitude and only speak well of the people you know.
• Verbally recognize other people's contributions. Simply praising someone's accomplishments and/or effort without seeking anything in return makes people feel good.
• Show a genuine interest in other people's lives. Nearly everyone's favorite topic of discussion is the topic they know most about: themselves. Ask good questions and genuinely listen to the answers others give. If you are one of the few people who actually remember things about people's lives, you cannot help but make others want to be around you more.

You earn the right to influence others by doing these three simple things. Think about the people you are seeking to influence. What is their assessment of you? You may have some work to do before you sit down with them.

Persuasion
When the time comes to make your presentation, some practices are better than others. One of the keys to influence is understanding that you will get opposition to your views. Here are a few suggestions when you meet resistance to your ideas.

• Begin the meeting with a smile and immediately seek to find common ground on the subject.
• Ask questions that get the other person talking about the situation. Listen closely to their point of view. You may be surprised at how often people talk themselves into your way of thinking when you simply listen to them.
• Verbally acknowledge the merit of the other person's ideas, even if they are contrary to yours.
• When resistance to your ideas arises, don't resort to arguing. Your chances of winning someone over to your way of thinking are diminished if you become an adversary. Even if they do follow through with your suggestions, they may not want to work with you on future projects because you had a disagreeable personality.

Take Action
Begin building rapport with people today. The work you do to develop relationships now will pay off when you seek to influence them tomorrow.

Be ready for people to turn your ideas down. Prepare yourself by focusing on the common ground and resisting the urge to argue.