Sales Ledger

Hello, we will cover the importance of having a sales ledger in this article, so that you arm yourself with the necessary knowledge that an entrepreneur needs to know.

This is a type of ledger which records the sales made on credit to the customers. This is very important because as the business expands, it will require that some goods be sold on credit terms.

1. When there are many sales transactions on credit basis, then it will be very difficult to master all sales transactions hence the need for a sales ledger in accounts which is used to record the details of various customers who have been given credit on goods. For example; If you are dealing with the sales of women's shoes and you buy them in large quantities, then you go ahead and sell the large quantities to your customers on credit basis. E.g. Customer x purchases women's shoes worth 200,000$ on credit. You will need to open for customer x an account under the sales ledger account and record the amount on the debit side of customer X's account. When customer X pays partially for the women's shoes, then you will post that amount on the credit side of X's account thus reducing what that customer owes you.

2. Figures that are posted on the debit side of various customers are used to determine sales on credit for a given period of time. This is used to determine the total sales of that financial period when you combine it or add it to the cash sales of the same financial period.

3. This account is also used to reconcile debtor's control account, which produces the total debtors account receivable for a given period of time.

4. A sales ledger can also be used by the accounts auditors to detect teaming and lading.
I hope the above information was of help to you.

ACCOUNTING

Accounting is vital for organistaions that need to know when they are making growth or just losses. Its vital to know how far the company can go and its growth potential. Therefore its vital for everybody to atleast know a little bit of accounting..

ACCOUNTING

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

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.

How to get Your Mortgage Loan Approved

Our home is the single most expensive thing that most of us will own during our lifetime; and getting approved for a mortgage loan can be stressful, complicated and time consuming. And unfortunately, obtaining a loan is even more difficult today than it has been in the past, due to declining house prices in many parts of the country and the reluctance of some lenders to lend money to buyers.

There is a difference between being pre-approved for a mortgage and pre-qualifying for a mortgage. Being pre-qualified simply means that you have a statement from your lender verifying that, based on a preliminary credit check, you should be able to qualify for a mortgage loan. Being pre-approved means that your information has actually been verified and that you have an underwritten approval for the loan that you are requesting. This is an important difference, as some sellers won’t accept an offer from a buyer who has not been pre-approved; some realtors will not work with a buyer who has not been pre-approved.

Being pre-approved for a mortgage loan also gives most borrowers a fairly accurate idea of now much they can afford to borrow – and how much house they can afford. A pre-approved mortgage should also have a guaranteed interest rate. Despite the obvious advantages of being pre-approved, in some areas of the country, only around 10% of potential buyers are pre-approved and many buyers start the pre-approval process while looking for a home. This strategy can delay you; even prevent you from buying the home of your dreams.

Be prepared to get lots of paperwork together in order to apply for and be approved for a mortgage loan. Typically, your lender will expect to see your last few pay stubs, or a profit and loss statement if you are self-employed; as well as your tax returns from the last two years. You may also need bank statements and your lender will pull a copy of your credit report. It may take up to a few weeks to be approved – or otherwise – for a mortgage loan.

You don’t necessarily need to have excellent credit to be approved for a mortgage, but a good credit score means that lenders will probably offer you better terms and lower rates. Your credit score can make a huge financial difference - a poor credit score that is below 630 can mean that your monthly mortgage payments will be anywhere between $50 and $250 higher. If practical, consider trying to improve your credit score and even waiting a year or two before you buy.

In addition to a good credit score, lenders typically look for a stable work history – ideally at least 6 months continuous employment with the same employer. A lender will also look at your income to debt ratio, to make sure you can actually afford to pay the monthly amount. Of course, at this point you should have a fairly good idea of what you can afford anyway. Any large outstanding debt that can be paid off will give you a better income to debt ratio; and if possible, try not to make a big purchase such as a new car just before applying for a loan, as it will lower your credit score

Finding the right lender is an important part of the approval process. It’s a good idea to compare not only the fees that you will incur with your application, but the overall service provided as well. Try to find out whether the lender is experienced and efficient, how long they have been in business and whether they are conveniently located – you will probably be visiting their office several times during the approval process. One of the most effective ways to find the right lender is simply to ask friends, family and co-workers for their recommendations.

Deciding between a smaller local lender and a larger national mortgage lender can be a difficult decision for many borrowers. In today’s competitive housing market, a smaller lender may be anxious to have your valuable business, may offer more personal service and may be more familiar with the local market. However, a local lender may not be available all the time. A larger national lender may be in a better financial position to lend you money; they may also offer a wider range of products and are often available around the clock.

Once you have been approved for a mortgage loan, the real hard work begins – trying to find the right house!

By Rachel Jackson.

HOW TO IMPRESS BIG-TIME DURING A PRESENTATION

Greetings to you friend. We all have made presentations or are going to make presentations at one stage of our lives or the other. It is important therefore to know how to make a good presentation that will impress those who you are presenting to. You should be;

I. Well groomed; you should be well groomed. You know what they say, first impressions last forever. The ideal focus of a presentation should be on the content but if the presenter is not well dressed and groomed, the panel being human beings may use this against you when presenting.

II. Confident; confidence is another key component for delivering an effective presentation. Even if your content was not good enough, but you showed confidence during the presentation, the board or panel may be compelled to give you a chance since they will see the opportunity of using your passion in another project.

III. Concise and to the point; you should stay away from lengthy presentations that don’t add value to your content and also ‘’bore the panel to death’’. Brief and concise presentations are always effective and will show the panel that you are focused on your work and will get projects finished quicker.

IV Efficient; By being efficient I mean covering the most relevant content in the presentation within the shortest time possible. Remember that the panel are people with a lot in their respective schedules thus if you are efficient in your presentation, it will earn you more marks on their side.

That’s it for now! I hope that helped you in becoming abetter accountant of your online business or money. If you have a question or need information, don’t hesitate to write to me at cashincomes3@gmail.com.

HOW TO FOLLOW ACCOUNTING PRINCIPLES

 Hello friend. I hope you are doing well and enjoying this voyage in the world of accounting. In whatever profession you engage in, there must be a set of rules or principles that are required to be followed in order to bring about order in the way of doing things. Accounting is no exception. Therefore as an accountant, you should know these principles and how to keep them. These include;
1. Principle of regularity; this can be simply kept by conforming to the enforced rules and laws of the accounting licensing body in your country.

2. Principle of consistency; this is also kept by you as an accountant by application of the same accounting procedures in the work you do from day to day.

3. Principle of sincerity; reflection of the true reality of a company’s financial status is how you keep the principle of sincerity. There are a lot of people with vested interests in those results. Misrepresentation of such information is what lead to the 2008 economic meltdown that has since ‘’rocked’’ the world, and not the good kind of ‘’rock’’.

4. Principle of the permanence of methods; By comparing financial information published by the company and checking to see if it is coherent with the records is how you follow this principle.

5. Principle of non-compensation; You should be able to show the full financial status of the company you are accounting for and not replacing figures such as debt with an asset.

6. Principle of prudence; this is similar to the principle above, therefore to keep it, you should be able to show the records ‘’as is’’ and not include projected results that have not been realised yet.

7. Principle of continuity; when accounting in a business you assume that a business is never interrupted, then you should keep a provision of assets of the company stating their historical and current value but not future value.

8. Principle of periodicity; this principle is kept when you accurately allocate a transaction through the period for which it has been paid. For example when somebody pays for a subscription of an entertainment magazine for a whole year, you should distribute the payments throughout the year and not as a one time payment on one day.

9. Principle of full disclosure; keeping this principle requires you to show all information and financial records pertaining to the financial position of the company.


That’s it for now! I hope that helped you in becoming abetter accountant of your online business or money. If you have a question or need information, don’t hesitate to write to me at cashincomes3@gmail.com.

LEDGER

Hello friend, today we shall tackle what a ledger is. So what is a ledger? Well a ledger is a book that is required for proper recording of transactions that affect the business e.g. If you want to start selling women’s shoes boots and you have saved up 50,000$ for the online business venture. When you eventually start the online business, you will have to make entries in your books of accounts and hence the book in which you record the capital (money or cash you want to start the business with) is recorded in the ledger account.

So what kinds of ledger are there? There are 2 main types of ledger available out there.

1. General or Nominal ledger; this ledger records information relating to the proprietor, purchases, sales and expenses. Who is a proprietor? A proprietor is you or the owner of the women’s shoes boots business. The money or cash which you shall have saved for a planned business venture, in this case, a women’s shoes boots business, or you would have borrowed from the bank, is recorded in the general ledger as Capital.

What is a purchase? Well, if you want to deal with women’s boots, you will purchase or buy women’s boots from the manufacturer. Therefore the women’s shoes boots bought are known as purchases and it is recorded in the general ledger; For example if you buy women’s boots worth 200,000$ , the figure will be posted to the purchases account. This will help you in determining which profit you have made after selling the women’s boots.

The sales part is when after purchasing or buying the women’s shoes, you will sell them to your customer. These sales you make will be posted to the sales account which is under the general ledger.

Expenses are amounts of cash or money spent in the course of doing the business. For example if you are dealing with women’s shoes or even women’s handbags, you will have to bring in the shoes or handbags from the factory to where you want to sell them. This is factoring in transport. The transport cost you incur is an expense which should be recorded in the transport expenses account.

2. Purchases ledger or Creditors ledger; this is the second type of ledger

There exists. This type of ledger account is used to record details of various creditors. For example; when you are dealing with women’s shoes or women’s handbags from different suppliers on credit, then the suppliers are referred to as your creditors. You may not be able to master or remember all this information when the numbers of your creditors increase. This will prompt you to record the details under the ledger known as the creditor’s ledger. Therefore when they supply you on credit, then you should enter such information in their respective accounts. For example; if x y z supplies you with women’s shoes or women’s handbags worth 200,000$ on credit, then you will be owing them 200,000$. In this event, you have to keep track of this credit from x y z under the purchase ledger account.

I hope that did help you, for more information you can email me at cashincomes3@gmail.com. Have a nice day!

4 STEPS TO SUCCESFULLY START YOUR OWN INTERNET BUSINESS

1. You should be focused; what do i mean by this? Focus is a very integral part of starting your own internet business. By focus, i mean a lot of us usually get excited by the idea of starting a business on the internet because of the revenue that other people are making from it. However, very few of us actually take action and start. They just get excited about the idea and then get sucked into other things forgetting what they had set out to do. Therefore if you are focused, words such as ''sometime'' and ''someday'', should not be part of your vocabulary. You should start it NOW! There are a lot of fat rewards that are waiting for you on the internet, but first, you should resolve to take action immediately.

2. You should set a time limit; This is very important. If you are a goal oriented person, you should set a time limit for yourself to start the business. It sounds so simple to do and yet most of us actually fail to do it. As a common phrase that goes ''failing to plan is planning to fail'', we often find ourselves in this dilemma due to lack of planning. However, if you set a time limit for yourself, you will be set to accomplish what you set out to do and be well on track to be a successful internet entrepreneur.

3. Find your passion; What is your passion? Yes, a business on the internet is a business like any other. The same passion that you need to start a business offline, is the same kind of passion that is needed to start a business online. What are your hobbies? what do you like writing about? what is your favorite product? Whatever it is, write it down. in fact, write a list of 5 things that interest you or you are fascinated about. be it electronics,games,dolls,e.t.c. After listing them down, do a little research about the areas you have listed. You can use the Google search engine for starters.

4. Prepare your tools; Preparation is the next step in the process. As i have said above that an online business is jut like a business offline. Therefore the same tools you need offline are still the same you need online. In the previous step i had asked you to do a little research on the five areas you have listed down on the internet. I hope you did it because in this step, you should select the one thing from the five that has little competition on the internet or that you think you can offer a better service than those that are currently available. After selecting one, select a domain name for it. What is a domain name? It is like a license plate for your car, it is a unique address that you use on the internet that directs people to your website or blog. You should also get a host for your website or blog. This is the place that holds your website or blog on the internet. I also advice you to get a valid business name and register it physically in your country. as i said above that this is a business like any other, therefore you should also be legally registered in order to avoid hitches in the future. This is an online business with the potential to generate six or even seven figure digit revenues, so you better be prepared well. So, select a business name, select and buy a domain name and hosting account for your business. There are various companies that offer domain name registration and hosting accounts.
If you need help in this area you can email me at cashincomes3@gmail.com.

USES OF CASH BOOKS IN ACCOUNTING

So what are cashbooks used for? Cash books in accounting are used to record both cash transactions received by the business and cash paid out by the business.A cash book has two sides; The debit side and the credit side. Each side of the cash book in accounting has columns for; -Date
-Particular; where you record the products.
-Bank; This is where you record payments made by cheques and receipt of cheques.
-Cash; This is the column where you should record cash received and cash paid out.

Debit side; This is used to record any cash received after which it is posted in the cash column in the cash book. For example if you made sales on a cash basis of goods worth 80,000$, then this will be recorded on the debit side on the cash book. The debit side is also used to record cheques received by the business i.e if a customer pays for goods by cheque worth 120,000$, then this is
recorded on the debit side on the bank column.

Credit side; The credit side is used to record cash and cheques paid for by the business. For example if your fuel costs about 100$ and is used up in a day, then it will be credited or written on the credit side of the cash book.However if the supplies are paid for using a cheque worth 200,000$ then it is recorded on the Bank column of the credit side of the cash book. So what is the importance of a cashbook in accounting anyway? You may ask. Well, a cash book;
1. A cash book helps the business in capturing all the payment and receipt for a particular month or duration.
2. A cash book is used to reconcile Bank statements.
3. A cash book can be used as a reference in accounting during auditing hence it gives evidence that goes a long way in directing the auditors while they are going through your books of account.

I hope this information was helpful. You can always comment below the post if you have any questions.

ACCOUNTING AND ITS RELEVANCE TO YOU AS AN ENTREPRENEUR

Welcome to this new chapter that I will use to take you through the basics of accounting and its importance to your business. Whether you are just deciding on becoming an entrepreneur or you are just starting your business and have no idea of what to do about your accounts. This is for you!! To start off, I will cover the following topics; • Why should you keep books of accounts? • Which books are you supposed to have in place as an entrepreneur? • What are so special about these books?

Perhaps you may not know that you engage in accounting activities during your daily routine. Why do I say this? We all use accounting methods when we plan on what to do with the money we earn. For example if your monthly salary is 1000 us $, you must have a plan of how much you are going to spend and on what you are going to spend it on. Of course most of us stray away from the plan and give way to a habit known as impulsive buying that is driven by what we see rather than what we planned. You should write it down on a piece of paper and carry it with you on your way to the mall. A simple paper that contains a list of what you want to buy marks the beginning of the process of accounting.Why would you want to keep books of accounts as an entrepreneur/ businessman or woman?

I. To determine whether your business is making a profit or a loss. For example if you are dealing in an online shoe shop and you purchased your stock of shoes at 50,000 $ and other expenses incurred while making the purchases amounted to 10,000 $. If your total sales of your shoes amounted to 80,000 $, then you are then able to calculate and see whether you made a profit or a loss. In this case it would be a profit of 20,000 $. This is very important to determine because it will help you decide whether you want to continue with the business or not.

II. Evaluation of assets and liabilities; All businesses must have assets and liabilities. What are Assets? Assets simply mean the possessions of the business, while liabilities mean those amounts which are due or borrowed from other persons. e.g.; a loan from a bank. These assets and liabilities are used to prepare a statement of financial position or in other words a balance sheet. A balance sheet or a financial position is always required by banks and other financial institutions before they approve your loan application. The government also uses it for tax assessment. If you also wish to sell your business, then the prospective buyers also request for this document.

III. A tool of control; it enables you to control various expenses. You can analyze the books of accounts and eliminate unnecessary expenses hence your profit is maximize.

IV. To facilitate the credit transactions; as the business grows, you will see such a rapid increase in transactions such that you cannot master them all in your mind hence the need for accountancy.