Скачать или смотреть Part 1.2 - Ledger and Accounts

Free introduction course for beginners in bookkeeping.
Learn the most important terminology, processes and tasks done by bookkeepers.

Terminology used:

The bookkeeping entries are grouped into Accounts (personal, real or nominal), forming an accounting ledger called a Book of Accounts. The bookkeeper’s responsibility is to enter the transactions accurately by using the correct accounts.

Personal, real and nominal accounts
Personal accounts relate to individuals or companies (customer or supplier accounts, bank accounts). For personal account double-entry: debit receiver, credit giver. Real accounts are those that relate to tangible and intangible assets of the business. For real account double-entry: debit what comes in and credit what goes out. Nominal accounts are those that relate to the income, expenses, gains, and losses (salary, sales, purchases, rent, telephone). For a nominal account, double-entry: debit expenses and losses, and credit income and gains.

Tangible assets are then classified into two groups: current and non-current (or fixed assets. Current assets are liquid and readily available for business needs, and non-current assets are long-term held assets, typically over 12 months. Examples are: Current assets: cash, inventory (or goods for sale), monies due from clients (receivables), prepayments (in advance).

Income is an increase in economic benefits, which can be regular business income (sale of goods) or irregular income (sale of machinery for extra cash). You will find income in the Profit and Loss report (also known as the Income statement). Gross income is sales less direct costs to produce goods or services.

Expenses are amounts that are spent to run your business, for example, for rent, software, accountants, legal, travel and telephone.

Gain – an additional income received, that is other than a regular business income, for example, the sale of a non-current asset above book value.

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