book keeping senior one

Chapter one Intruduction of Bookkeeping

A. Objective of Bookkeeping

1. To keep the records of a business operation .

2. To ascertain the profit or loss of a business for a particular period.

3. To show thw financial position of a business at a particular date to find out what is owns and owes.

4. To provide useful accounting information for decision making of a business.

B. Difference of Bookkeeper and an Accountant

1

Bookkeeper Accountanta. Keeps the source documents that flow into the business.

b. Makes entries in the books for the transactions of the business.

c. Organise the record data .

d. Prepares reports at the end of a period.

a. Rewiews the detailed bookkeeping transactions and summaries to detect errors or omissions .

b. Presents the interprets the summarized financial information to the management.

c. Explains the difference between the actual performance and the forecast result of the business.

d. Forecast the future growth of the business.

e. Sets up te internal control system to assist daily operation of the business and to prevent fraud .

Chapter 2 Rules od Debit and Credit and General Ledger

A. General ledger Dr. Title of account Cr.

2

Date Particulars Folio Amount

Date Particulars Folio Amount

B. Accounting Elements

a. Assets Motor vehiclesfixture and fitting office equipmentInventory ,Accounts ReceivableBank , Cash ,

b. Liabilities Accounts PayableBank overdraft, Bank laon

c. Equity / Owner’s equity Capital(capital + net profit –Drawings )

d. Income Sales

interest receivedCommission received

e. Expenses Purchases

wages and salaries , rentinsurance

C. Important Notes

DR.. CR.

Assets 资产Expenses 费用

Liabilities 负债Income 收入

3

D. The Relationship between the Dr and Cr.

1. Assets --- increased Liabilities ----- increased

2. Assets ---- decreased Liabilities ----- decreased

3. Both Assets -------- one increased , one decreased

4. Both Liabilities ----- one increased , one decreased

E. Example

Transaction Accountsto be debited

ReasonsAccountsto be credited

Reasons

a)

Goods were sold for cash.

Cash Assets Sales Income

b)

Goods sold to Amin on credit .

Amin Assets Sales Income

4

c) Goods were purchased for cash

Purchases

Expenses Cash Assets

d)

Additional capital was introduced into the business in cash .

Cash Assets Capital Equity

e)

Received cheque from Amin for full settlement.

Bank Assets Amin Assets

f) Cash was drawn from bank .

Cash Assets Bank Assets

g)

Goods purchased from Ng on credit

Purchases

Expenses Ng Liabilities

F. Double Entries

1. Amin started his business on 1 Jan 2015 , his transaction were shown as follows:2015Jan 1 Started business with capital RM 5000 in cash. 9 Purchases 4 tables for cash RM300 each. 11 Sold 2 table foe cash RM400 15 Sold 2 more tables for cash RM 500 each. 16 Bought another table for cash RM500.

5

19 Sold the 2 remaining tables for cash RM600 each. 25 Paid the general expenses for cash RM 400.

You are required to shown the above transaction by using doubli entry in Amin ‘s General Ledger and balance off all the accounts .

In the book of Amin :

Capital

2015 RM 2015 RMJan 31 Balance c/d 5000 Jan 1 Cash 5000 Feb 1 balance b/d 5000

Cash

2015 RM 2015 RM

6

Jan 1 Capital 5000 Jan 1 Cash 5000 11 Sales 800 9 Purchases 1200 15 Sales 1000 16 Purchases 500 19 Sales 1200 25 General Exp 400 31 Balance c/d 900 8000 80002015Feb 1 Balance b/d 900

Purchases

2015 RM 2015 RMJan 9 Cash 1200 Jan 31 Balance c/d 1700 16 Cash 500 1700 1700

Sales

7

2015 RM 2015 RMJan 31 Balance c/d 3000 Jan 13 Cash 800 15 Cash 1000 19 Cash 1200 3000 3000

General Expenses

2015 RM 2015 RMJan 31 Cash 400 Jan 1 Balance c/d 400 Feb 1 balance b/d 400

G. Trial Balance

8

Chapter 3 Income statement

Company 's NameIncome statement

For the year ended 31 December 2015RM RM RM RM

Opening Inventory xx Sales xxPurchases xx Less : Returns Inwards (xx)Less: Returns outwards (xx) Discount Allowed (xx) Discount Received (xx) Net Sales xxxNet Purchases xxAdd : Carriage Inwards xx Wages on Packing xx Duty Import xxCost of Purchases xxCost of goods available for sale xxLess : Closing Inventory (xx)Cost Of Sales xx xGross Profit / Gross Loss xx

xxx xxx

Carriage Outwards xx Gross Profit xxWages and Salaries xx Commission xxBad Debts xx Rental Income xx Insurance xxRent xxInterest on loan xxGeneral Expenses xxMotor Vehicle Expenses xxNet Profit / Net Loss xx

xxx xxx

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Chapter 4 Statement Of Financial Position

Company ' s NameStatement Of Financial PositionAs at 31 December 2015RM RM RM RM

Non-Current Assets Owner's EquityOffice Equipment xx Opening Capital xxFurniture And Fitting xx

Add : Net Profit \Less: Net Loss xx

Lands And Building xx xx xx

Less: Drawings (xx)Current Assets Closing Capital xxInventory xxAccount Receivable xx Non-Current LiabilitiesCash At Bank xx Mortgage Loan xxCash At Hand xx xx Bank Loan xx xx

Current LiabilitiesAccount Payable xxBank Overdraft xx xx

xxx xxx

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Chapter 5 Documents Used In Bussiness Transaction

A. Source of documents

1. Letter of Inquiry2. Quotation3. Purchases Order4. Advice Note5. Delivery Note6. Invoice ( purchase Invoice )7. Debit Note8. Credit Note9. Official Receipt10. Statement Of Account 11. Bank-in Slip12. Cash bill13. Invoice (Sales Invoice)14. Payment Voucher

B. Record of the documents

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6 to 14 need to record in book…

i) Original ------- Invoice --- Purchases Debit Note --- Purchases ( under charges ) Credit Note -- Purchases Returns Official Receipt ---- Pay $$ ii) Duplicate ------ Invoice --- Sales Debit Note --- Sales ( under charges ) Credit Note -- Sales Returns Official Receipt ---- Receive $$

iii) Bank-in Slip ----- Put $$ in bank

iv ) Payment Voucher --- pay $$

Chapter 6 Journals

A. Types of Journals

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1. Purchases Journal2. Sales Journal3. Purchases Returns Journal ( Returns Outwards )4. Sales Return Journal ( Returns Inwards )5. Cash Book 6. General Journal

B. General Journal

Date Particulars Folio

Debit Credit

2015Jan 1 Cash

Capital( Being cash invested

GL2GL1

RM5000

RM

5000

20

to start the business )

2 Motor Vehicle Cash( Being purchase of a Motor Van by cash )

GL3GL2

40004000

General Ledger

Capital

2015 F RMJan 1 Cash GJ1 5000

Cash

2015 RM 2015 F RM

Jan 1 Capital 5000 Jan 2 Motor Vehicle GJ1 4000

C. Purchases Journal

Purchases Journal Date Inv. No Particulars Folio Details Amount2015Jan 3

Jan 4

187

186

ShantiLess : 10% Trade Discount

Benny

PL 1

RM500

( 50 )

200

450

21

Jan 6

31

200

Less : 10% Trade Discount

ShantiLess : !0 % Trade Discount

Transferred to Purchases Account

PL2

PL1

GL1

(20)

800( 80)

180

720

1350

Purchases LedgerShanti

2015 Folio RM

Jan-03 Purchases PJ1 450

6 Purchases PJ1 720

Benny

2015 RMJan-01 Jan-04 Purchases PJ1 180

22

General Ledger Purchases

2015 RMJan-31

Total for the Month 1350

所有欠他$$ 的，要进他们名字的 ---- credit side 一年的买货总结要进 Purchases Account -- debit side

D. Sales Journal

Date Inv. No

Particulars Folio Details Amount

2015Feb 2

4

6

265

285

395

KassimLess : 10% Trade Discount

Kassim

MichealLess : !5 % Trade Discount

SL 1

SL1

SL2

RM600

( 60 )

200

400(60 )

540

200

340

23

31 Transferred to Sales Account GL2 1060

Sales Ledger

Kassim

2015 Folio RM Feb 2 Sales SJ1 540

4 Sales SJ 1 200

Michael

2015 Folio RM Feb 6 Sales SJ1 340

General Ledger

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Sales

2015 RM

Feb-28 Total for the mth 1060

所有欠我$$ 的，要进他们名字的 ---- debit side 一年的卖货总结要进 Sales Account -- Credit side

E. Purchases Returns Journal

Purchase Returns JournalDate Inv. No Particulars Folio Details Amount2015Jan 23

30

31

86

23

ShantiLess : 10% Trade Discount

BennyLess : 10% Trade Discount

Transferred toPurchase returns Account

PL 1

PL2

GL3

RM50

( 5 )

20(2)

45

18

63

25

Purchases Ledger

Shanti

2015 Folio RM 2015 Folio RM

Jan 23

Purchases PRJ 1 45 Jan-

03 Purchases PJ1 450

Returns 6 Purchases PJ1 720

Benny

2015 RM Jan 30

Purchases PRJ 1 18 Jan-

04 Purchases PJ1 180

Returns

General Ledger

Purchases Returns

2015 Folio RMJan- Total for the mth PRJ1 63

26

31

有买货或才会有退货，同一个人的户口 ---- debit side一年的买或退货总结要进 Purchases Returns Account -- Credit sideF. Sales Returns Journal

Sales Returns JouanalDate Inv. No Particulars Folio Details Amount2015Feb 23

26

31

45

85

Kassim

MichaelLess : 10% Trade Discount

Transferred toSales returns Account

SL 1

SL2

GL4

RM

50(5 )

60

45

105

27

Sales LedgerKassim

2015 Folio RM 2015 Folio RM Feb 2 Sales SJ1 540 Feb-

23 Sales Returns SRJ1 60

4 Sales SJ 1 200

Michael

2015 Folio RM 2015 Folio RM Feb 6 Sales SJ1 340 Feb-

26 Sales Returns SRJ1 45

General Ledger

Sales Returns

2015 Folio RM

Feb28 Total for the mth SRJ 1 105

28

有买货或才会有退货，同一个人的户口 ---- credit side一年的卖货退货总结要进 Sales Returns Account --Debit sideG. Document and the Journal

1. Purchase Invoice ---- Purchases Journal

2. Sales Invoice --- Sales Journal

3. Credit Note Received ---- Purchases Returns Journal

4. Cerdit Note to the customer -- Sales Returns Journal

5. Cash Bill / Official Receipts / payment voucher ----- Cash Book 6. Petty Cash Voucher ---- Petty Cash Book

7. Journal Voucher --- General Journal

29

欠$买货

欠$卖货

收到退货单

发出退货单

Chapter 7 Cash Book

A. Cash Book

从银行拿钱出来 Dr. Cash Cr Bank 属于 contra ( c) Cash ‘ Particulars -- Bank Bank ‘s Particulars -- Cash

把钱存进银行　 Dr. Bank Cr Cash 属于 contra ( c) Bank ‘ Particulars – Cash Cash ‘s Particulars -- Bank

B. Transfer To the Ledger

30

所有 Dr. Cash / Bank ------- 　Cr. General Ledger 所有 Cr. Cash / Bank -------- Dr. Generl Ledger

Dr. 　　　 Cr.

费用收入

Chapter 8 Petty Cash Book

31

A. Transfer to the General Ledger ( Reimbursement at the beginning of the month )

B. Reimbursement at the end of the month

32

Chapter9 Bad Debts & Allowance for the Doubtful Debts A. Bad Debts On January 2015 , goods of RM200 were sold to Wee. He paid RM150 by cheque on 5 March 2015. He was unable to settle the remaining balance at the end of the accounting year ended 31 December 2015.You are required :a) Weeb) Bad Debtsc) Income Statement

Wee 2015 RM 2015 RM

Jan-01 Sales 200 Mar 5 Bank 150

Dec 31Bad Debts 50

200 200

Bad Debts

2015 RM 2015 RM

Dec 31 Wee 50 Dec 31Profit and Loss 50

50 50

Income StatementFor The Year ended 31 December

RMBad Debts 50

B. Bad Debts Recover

34

发生在同一年On 1 May 2015 , Ali paid RM200 for a debt which had already written off as bad on 8 March 2015.You are required to prepare all the relevant accounts for the year ended 31 December 2015

Ali

2015 RM

2015 RM

Jan-01 Balance 200 Mar 8Bad Debts 200

May 1 Bad Debts 200 May 1 Cash 200

Cash201

5 RMMay 1 Ali 200

Bad Debts

2015 RM

2015 RM

Mar 8 Ali 200 May 1 Ali 200

发生在不同年35

A debts RM 500 of Tan Company had been written off as bad in year 2014 , and it was subsequently recoverd at the end of year 2015.You are required to prepare all the relevant accounts for the year ended 31 December 2014 and year 2015

Tan Company2014 RM 2014 RMJan-01 Balance b/d 500 Dec 31 Bad Debts 500

2015 2015Dec 31 Bad Debts Recover 500 Dec 31 Cash 500

Cash2015 RM

Dec 31Tan Company 500

Bad Debts2015 RM 2015 RM

Dec 31 Tan Company 500 Dec 31

Profit and Loss 500

Bad Debts Recover

2015 RM 2015 RM

Dec 31 Profit and Loss 500 Dec 31 Tan Company 500

Income StatementFor the year ended of 31 December 2015

RM RMBad Debts 500 Bad Debts Recover 500

C. Allowance For Doubtful Debts

36

( Account Receivable - Bad Debts ) x %

算好的 Allowannce for Doubtful Debts 要减去年带下的。 i）如果是正值---就是 Increased ，就是 Expences ii）如果是负值---就是 decreased ，就是 Income

每一年计算出的，要放进 Statement Of Financial Position被 Account Receivable 扣除

第一年准备的 Allowance For Doubtful Debts

Account Receivable RM 50,000

37

The management of the company decided to charge 5% of the total accounts receivable . The accounting year is on 31 December

Allowance for Doubtful Debts2014 RM 2014 RM

Jan-01 Balance c/d250

0 Dec 31 Profit and Loss250

02015

Jan-01 Balance b/d250

0

Income StatementFor the year ended of 31 December 2015RM

Allowance for Doubtful Debts250

0

Statement Of Financial Position As at 31 December 2014

Current Assets RMAccount Receivable 50000Allowancw for Doubtful debts (2500)

47500 Working : RM 50,000 x 5% = RM2500

Increased of Allowance For Doubtful Debts


38

Allowance for Doubtful debts RM 700The management of the company decided to charge 3% of the total accounts receivable . The accounting year is on 31 December

Allowance for Doubtful Debts2014 RM 2014 RM

Jan-01 Balance c /d 1500 Jan 1 Balance b/d 700Dec 31 Profit and Loss 800

1500 15002015

Jan-01 Balance b/d 1500

Income StatementFor the year ended of 31 December 2015RM

Allowance for Doubtful Debts 1500


Current Assets RMAccount Receivable 50000Allowancw for Doubtful debts (1500 )

48500

Working : RM 50,000 x 3% RM1500- RM700 = RM 1500 = RM 800 ( Increased)

Decreased of Allowance For Doubtful Debts


39

Allowance of Doubtful debts RM 900The management of the company decided to charge 3% of the total accounts receivable . The accounting year is on 31 December

Allowance for Doubtful Debts201

4 RM201

4 RMJan-01 300 Jan 1 Balance b/d 900

Dec 31 Balance c /d 600

900 9002015



RM Allowance for Doubtful Debts 600


Current Assets RMAccount Receivable 20000Allowancw for Doubtful debts (600)

19400

Working : RM 20,000 x 3% RM 600 – RM 900 = RM600 = - RM 300 (decreased)

Chapter 10 Control Accounts

40

A.Important Notes

41

$$ Sales Control Account $$

Balance b/d 1 支票不过账 2 折扣取消 3. 顾客多还（refund）

Balance(minority) b/d 1 还钱 2 Purchases control --Contra

不能进的项目 ---- 1 . Cash Sales 2. Provision for bad debts 3. Bad debts recover （进两边）

$$ Purchases Control Account $$

Balance(minority) b/d 1 还钱 2 Sales control -- contra

Balance b/d 1 买货 2 钱还多了（refund）

不能进的项目 ---- 1 . Cash Purchases

Chapter 11 Non- Current Assets & Depreciation

A. Method42

1. Straight line Method

Depreciation = CostUseful Life or Cost−Scrap valueUseful Life

or Cost x % of depreciation ( Cost – Scrap value ) x % of depreciation

2. Reducing Method / Diminishing Opening Carrying Amount x % of depreciation (Cost – Accumulated depreciation ) x % of depreciation

B. Calculation Aman bought a Van at a cost of RM18000 on 1 Jan 2010. He estimated the scrap value of the van would be RM 2000 after 4 years . You are required to calculate the depreciation for 4 years using : a) straight line method b) reducing bLnce method at 50 % per annum

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End of

Cost Annual Depreciation AccumulatedDepreciation

Carrying Amount

Straightline

Reducingbalance

Straightline

Reducingbalance

Straightline

Reducingbalance

2010

18000

RM4000

RM9000

(18000x50%)

4000 9000 14000 9000

2011

18000

4000 4500(9000x50%

)8000 13500 10000 4500

2012

18000

4000 2250(4500x50%

)12000 15750 6000 2250

2013

18000

4000 1125(2250x50%) 16000 16875 2000 1125

straight line method

Depreciation --- = CostUseful Life

= 18000−20004

= 4000C. Accounting Entries ( Accumulated Depreciation is not opened)

Motor vehicle Account2010 RM 2010 RM

Jan-01 Bank 18000 Dec 31 Depreciation 400031 Balance c/d 14000

18000 180002011 2011

Jan-01 Balance b/d 14000 Dec 31 Depreciation 400031 Balance c/d 10000

14000 14000

44

2012 2012Jan-01 Balance b/d 10000 Dec 31 Depreciation 4000

31 Balance c/d 600010000 10000

2013 2013Jan-01 Balance b/d 6000 Dec 31 Depreciation 4000

31 Balance c/d 20006000 6000

2014Jan-01 Balance b/d 2000

Depreciation Of Motor Vehicles

2010 RM 2010 RM

Dec 31Motor Vehicle 4000 Dec 31 Profit and Loss 4000

2011 2011


2012 2012


2013 2013



RMDepreciation of Motor Vehicle 4000





45



Statement of Financial Position As at 31 December 2010

N0n-Current Assets RM Motor Vehicle 14000







B. Accumulated Depreciation is opened

Motor vehicle Account2010 RM 2010 RM

Jan-01 Bank 18000 Dec 31 Balance c/d 180002011 2011

Jan-01 Balance b/d 18000 Dec 31 Balance c/d 180002012 2012

Jan-01 Balance b/d 18000 Dec 31 Balance c/d 180002013 2013

Jan-01 Balance b/d 18000 Dec 31 Balance c/d 180002014


46

Depreciation Of Motor Vehicles

2010 RM 2010 RMDec 31 Motor Vehicle 4000 Dec 31 Profit and Loss 4000

2011 2011Dec 31 Motor Vehicle 4000 Dec 31 Profit and Loss 4000



Accumulated Depreciation Of Motor Vehicles

2010 RM 2010 RMDec 31 Balance c/d 4000 Dec 31 Depreciation 40002011 2011

Dec 31 Balance c/d 8000 Dec 31 Balance b/d 4000 Dec 31 Depreciation 4000

8000 80002012 2012

Dec 31 Balance c/d 12000 Dec 31 Balance b/d 8000 Dec 31 Depreciation 4000

12000 120002013 2013

Dec 31 Balance c/d 16000 Dec 31 Balance b/d 12000

47

Dec 31 Depreciation 400016000 16000

2014Dec 31 Balance b/d 16000










N0n-Current Assets RM Motor Vehicle 18000Less : Accumulated Depreciation (4000)

14000



10000


48


6000



2000

C. Depreciation Is not OpenedMotor vehicle Account

2010 RM 2010 RMJan-01 Bank 18000 31 Balance c/d 18000

2011 2011Jan-01 Balance b/d 18000 Dec 31 Balance c/d 18000




Accumulate

49

d Depreciation Of Motor Vehicles

2010 RM 2010 RMDec 31 Balance c/d 4000 Dec 31 Profit and Loss 4000

2011 2011Dec 31 Balance c/d 8000 Dec 31 Balance b/d 4000

Dec 31 Profit and Loss 40008000 8000





2014Dec 31 Balance b/d 16000


RMAccumulated Depreciation 4000





50





14000



10000



51

Less : Accumulated Depreciation (12000)6000



2000

Chapter 12 End-of-period Adjustment

A. Income and Expenses

Income Expenses1. Rent Received2. Commission Received3. Interest on Fixed Deposit4. Dividend

1. Insurance2. Rental3. Salaries4. Electricity

Expenses -- 应付未付--- Current Liabilities

52

未到先付--- Current Assets

Income --- 应收未收 --- Current Assets 未到先收---- Current Liabilities

年终调整 --- 所有 Accrued / In Arrear 到期了，未付或未收要加上 --- 所有 Prepaid / In Advance 未到期，先付或先收要减掉B. Accounting Entries

Car Expenses1985 RM 1985 RM

53

Dec 31 Cash(1250 x 3/4) 938 Jan-01 Balance b/d 10431 Balance c/d 68 Dec 31 Profit and Loss 912

1016 10161986


Rent Receivable

1985 RM 1985 RMDec 31 Profit and Loss 6000 Jan-01 Balance b/d 500

31 Balance c/d 1000 Dec 31 Cash 65007000 7000


Rent Payable1987 RM 1987 RM

Jan-02 Cheque 750 Sept-30 Profit and Loss 3000

54

Mar 28 Cheque 750Jun-30 Cheque 750Sept-30 Balance c/d 750

3000 30001988Oct 1 Balance b/d 750

Rent Receivable

1987 RM 1987 RMSept-30 Profit and Loss 500 May 2 Cheque 300

(1200 x 5/120 Aug 1 Cheque 300Sept-30 Balance c/d 100

600 6001988Oct 1 Balance b/d 100

Chapter 13 Manufacturing Acoount

(Work- in - progress at PRIME COST )Company'sname

Manufacturing Accountfor the year ended 31 December 2015

RM RMRaw MeterialOpening Stock xxPurchases xxLess: Return Outwards (xx)

xxAdd: Carriage Inwards xx xx

xxLess : Closing Stock (xx)

xxLess : Scrap Sales (xx)Raw Material Consumed xxx

55

Direct LabourDirect wages / manufacturing wages xx

Direct ExpensesRoyalties xx

Work-in progress (at Prime Cost )Opening stock xxLess : closing stock (xx) xxPrime Cost xxx

Factory OverheadIndirect wages xxFactory expenses xxElectricity xxWater xxFactory power xxDepreciation of machinery xxLoose Tools (opening stock + purchases - closing stock) xx xxFactory Cost of Production xxFactory Profit ( transfer to profit and loss Account ) xxStandard Cost of Production xx

56

Raw MeterialOpening StockPurchasesLess: Return Outwards

Add: Carriage Inwards

Less : Closing Stock

Less : Scrap SalesRaw Material Consumed

Direct LabourDirect wages / manufacturing wages

Direct ExpensesRoyaltiesPrime Cost

57

Factory OverheadIndirect wagesFactory expensesElectricityWaterFactory powerDepreciation of machineryLoose Tools (opening stock + purchases - closing stock)

Work-in - progress ( at Faoctory cost )Opening StockLess: Closing StockFactory Cost of ProductionFactory Profit ( transfer to profit and loss Account )Standard Cost of Production

58

Example :

61

Solution :

62