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Employment and Productivity TrainingBookkeeping Basics500Bookkeeping basics, accounting terms, chart of accounts 2016 COPYRIGHT: Steve Slisar owns the copyright for this publication. This publication or parts of it may not be reproduced in any formphysical or digital without the written consent of the copyright owner.EzyLearn Bookkeeping Basics Course Workbook - 2016

EzyLearn Bookkeeping Basics Course Workbook - 2016www.ezylearnonline.com.auPre-requisitesYou should have a certain number of skills already if you are going to progress further with anyword processing program. You should know:a) How to start a program (Beginners 101),b) How to open and save a file (Beginners 102),c) How to move around the text in a document (Beginners 103), andd) How to make changes (edit) to text (Beginners 103).e) How to access and navigate around a website (Internet 105)Websites, Social Media and OnlineDigital Marketing ServiceGet all the tools you need to create, maintain, optimise your contentmarketing strategy for new and existing clients. Includes: Using WordPress to create and maintain landing pages and blogs.Create and manage social media profilesGenerating relevant and interesting contentCreating Pay-per-Click and Pay per impression ad campaignsEnter keywords, page descriptions and page titles to optimise your website for searchengines like Google (SEO)Website analytics to measure where visitors are going, howmany pages they visit and how long they stay at your site.Statistics to show you what your visitors are looking atVisit www.123ezy.com or www.virion.com.au for more information.CloudPBX Telephone SystemsGet all the features of a robust business telephonesystem AND the benefits and cheap calling rates ofVoIP. Includes: Extensions can be in remote (including home office) andstill be part of the system.Calls from extension to extension are free, no matter where they are located.Unlimited Local and National calls included.Hold, music on hold and the ability to transfer all includedVoicemail messages to emailDigital Assistant / Auto Attendant (IVR)Visit www.cloudpbx.com.au for more information. 2016 Steve Slisar1Phone: 1300 888 869

EzyLearn Bookkeeping Basics Course Workbook - 2016www.ezylearnonline.com.auTable of ContentsContentsPRE-REQUISITES. 1WEBSITES, SOCIAL MEDIA AND ONLINE DIGITAL MARKETING SERVICE . 1CLOUDPBX TELEPHONE SYSTEMS . 1BOOKKEEPING BASICS INTRODUCTION . 3DIY ACCOUNTING . 3DIY ACCOUNTING INTRODUCTION. 3Get help if you need it . 4CHARTS OF ACCOUNTS . 4What is the Chart of Accounts? . 4Customising the Chart of Accounts . 4Chart of Accounts & General Ledger? . 4Chart of Accounts & Trial Balance . 5Tax Codes . 5Examples of FRE & N-T: . 5Examples of GST & CAP: . 6Tax On Invoices. 6CASH VS. ACCRUAL ACCOUNTING METHODS . 7What is Cash Accounting? . 7Cash Accounting and the BAS. 7What is Accrual Accounting?. 7DEBITS-CREDITS-INCOME-EXPENSES:. 8Income Accounts . 8Expense Accounts . 8When Do You Use a Sales Invoice? . 9When Do You Use an Enter Purchase? . 9When Do You Use a Journal Entry? . 9DEBIT AND CREDIT . 10INTRO TO CREDIT CONTROL . 11Creditors Report . 12Debtors Report . 12WHAT’S NEXT . 13ARE YOU LOOKING FOR WORK? . 13WANT TO START YOUR OWN BOOKKEEPING BUSINESS?. 13 2016 Steve Slisar2Phone: 1300 888 869

EzyLearn Bookkeeping Basics Course Workbook - 2016www.ezylearnonline.com.auBookkeeping Basics IntroductionDIY AccountingThis section contains some videos thatwill give you a general introduction toAccounting and Bookkeeping. We gothrough things such as the AustralianTax codes and what these may be usedfor, Debit and Credit principals in anaccounting sense and the meaningbehind Cash and Accrual accounting.DIY AccountingIntroductionBookkeeping is something that everybusiness has to do. It doesn’t matterhow large or small your business is andit doesn’t matter where you are based –whether in an office or factory, orworking from home as a remotecontractor.Getting your bookkeeping donepromptly is not only important as partof your compliance requirements forthe Australian Taxation Office, but theinformation you get from thisbookkeeping data entry helps youunderstand how your business isperforming and if there is anything thatyou need to change.The bookkeeping process begins themoment you start out in business andincur expenses and most of the timespent in bookkeeping is involved indata entry and what accountants call“coding” – ie. putting each expense,income, asset and liability in thecorrect “account”. A simple exampleof demonstrating this is that costs forpetrol need to go into the MotorVehicle expenses category in youraccounting software. 2016 Steve Slisar3Phone: 1300 888 869

EzyLearn Bookkeeping Basics Course Workbook - 2016www.ezylearnonline.com.auGet help if you need itIf you get to a point where it is startingto get too complicated for you, youcould get a Bookkeeper that is aregistered BAS agent or yourAccountant to help.Charts of AccountsWhat is the Chart of Accounts?They are a list of accounts created &used by a business which tells themabout what their money was spent onor who they received money from.The Chart of Accounts also helps abusiness to arrange their finances byseparating the expenses, income,assets & liabilities in order to give therelevant people a better understandingof the businesses finances.Customising the Chart ofAccountsThe Chart of Accounts can becustomised to suit any business.The smaller the business, the smallerthe list of accounts is needed.Whereas the larger the business themore accounts are needed for detailedreporting purposes.Chart of Accounts & GeneralLedger?The General Ledger contains all of theaccounts for recording transactionrelating to a company's assets,liabilities, owners equity, income &expenses. 2016 Steve Slisar4Phone: 1300 888 869

EzyLearn Bookkeeping Basics Course Workbook - 2016www.ezylearnonline.com.auThe General Ledger report shows thetransaction applied to any or all of theaccounts within the Chart Of Accounts.The General Ledger is the number 1report in any accounting system, whichholds financial & non financial data foran entity.Chart of Accounts & TrialBalanceThe Trial Balance shows the balancesin each respective accounts in theChart Of Accounts list.The Trial Balance shows a list of allthe Active General Ledger accounts with a debit or credit balance.Active means accounts with anybalance whether they are positive ornegative.Tax CodesTax Codes are codified system thatdesignates and defines governmentlevies on transactions, also known asTaxes.What are the main Tax Codes? GST - 10% GST is applicableto a particular item and 10% ofthe amount should be allocatedto the GST Account.FRE - 0% GST is NOTapplicable to a purchase.N-T - 0% GST is NOTreportable on a purchase.Examples of FRE & N-T: 2016 Steve Slisar5Phone: 1300 888 869

EzyLearn Bookkeeping Basics Course Workbook - 2016www.ezylearnonline.com.auExamples of GST & CAP:Essentially the difference is based onwhether your payment is an expenseor an asset purchase. Unless thereare special exemptions to stimulatethe economy assets much bedepreciated over time whereasexpenses can be claimed at the timethey are incurred to reduce yourtaxable income.Tax On Invoices.If you are registered for GST yourinvoices should include the following: 2016 Steve Slisar6Phone: 1300 888 869

EzyLearn Bookkeeping Basics Course Workbook - 2016www.ezylearnonline.com.auCash Vs. Accrual Accounting MethodsWhat is Cash Accounting?The Cash Accounting Method recordsincome when it is actually received. Italso records outgoing payments andexpenses when they have actuallybeen paid.Cash Accounting and the BAS.If you are registered for GST you willhave to lodge a BAS Statementusually quarterly but it can also belodged monthly if you have organisedthis with the Tax Office.Let’s say as an example we invoice acustomer on the 15th December butthey don’t actually pay until 5thJanuary. We would need to put the payment transaction on the third quarter BAS which is 1stJanuary to 31st March as the payment was made on the 5th January.What is Accrual Accounting?Accrual Accounting records incomewhen it is actually earnt & recordsoutgoing payments when it is incurredregardless of any pay dates.Let’s say as an example again, weinvoice a customer on the 15thDecember but they don’t actually payuntil 5th January. With the AccrualAccounting Method we would need toput the invoice transaction on thesecond BAS which is 1st October to31st December as the invoice wasdated 15th December. 2016 Steve Slisar7Phone: 1300 888 869

EzyLearn Bookkeeping Basics Course Workbook - -Expenses:Income AccountsTypes of Income you would need toreport to the Tax Office include sale ofgoods or income from providing services,rental income and investment returns(from things like shares)Expense AccountsExpenses that you can declare to reducethe tax you pay on your income includethe Cost of Goods Sold (COGS),operating costs like rent, power, petrol etcand the costs associated with hiring andmanaging staff. 2016 Steve Slisar8Phone: 1300 888 869

EzyLearn Bookkeeping Basics Course Workbook - 2016www.ezylearnonline.com.auWhen Do You Use a Sales Invoice?You would use a Sales Invoice whengoods are sold or a service is provided toa customer.When Do You Use an EnterPurchase?You would use a Purchase when youreceive a bill or invoice for a purchase i.e.purchases for some stationary fromofficeworks, an invoice you have receivedfor electricity. These would then beentered in as a purchase.When Do You Use a Journal Entry?A Journal Entry is used for example: torecord an Owner’s Capital into a business,for a BAS transaction, for year endingadjustments.A sample of a Journal Entry (as shown onthe right) using the Double Entry System,you would Debit the Bank Account withthe 50,000 and Credit the Owner A Equity with the 50,000.Double Entry bookkeeping uses a formulafor debits & credits. When you debit aBank account you are increasing thatbank account & therefore adding funds toit. 2016 Steve Slisar9Phone: 1300 888 869

EzyLearn Bookkeeping Basics Course Workbook - 2016www.ezylearnonline.com.auDebit and CreditDebit & Credit are 2 critical terms used inbusiness transactions. Every Debittransaction needs a Credit transaction andvice versa.Debits & Credits are frequent terms usedin Bookkeeping and Accounting. Itcontrols and establishes how to recordany financial transactions.You will often see the Debit term shownas DR and the Credit term shown as CRin Bookkeeping and Accounting.The screenshot to the right is the formulafor Debits & Credits in the accountingsense.The above accounts are an example ofhow you enter the transactions in aJournal Entry as to whether you wouldDebit or Credit the transaction. It alsoshown you weather it would Increase orDecrease the account you have allocatedit to. 2016 Steve Slisar10Phone: 1300 888 869

EzyLearn Bookkeeping Basics Course Workbook - 2016www.ezylearnonline.com.auIntro to Credit ControlA Creditor is your Supplier for expensetype transactions.A Debtor is a Client or Customer revenueor income type transaction. 2016 Steve Slisar11Phone: 1300 888 869

EzyLearn Bookkeeping Basics Course Workbook - 2016www.ezylearnonline.com.auCreditors ReportA Creditors Report is an AccountsPayable Report that tells you how muchmoney you owe to your Suppliers. It letsyou know the number of days payment isoutstanding, any overdue balance and thetotal balance owed to each supplier. Thisis recorded as an expense transactiontype.Debtors ReportA Debtors Report is an AccountsReceivable Report that tells you howmuch money your clients and customersowe you. It lets you know the number ofdays payment is outstanding, any overduebalance and the total balances you areowed. This is recorded as an income orrevenue transaction type. 2016 Steve Slisar12Phone: 1300 888 869