Every bookkeeper needs to understand how to process a payroll. This is one of the many regular tasks in the bookkeeping cycle. In this lesson I’m going to illustrate a payroll structure as it pertains to the chart of accounts.
Small business books and manuals explain the formula used to determine whether additional debt increases the return for investors commonly known as return on investment (ROI). I find this laughable in our modern economic times given the low cost of financing.
Job descriptions act as the framework for the relationship between the employer and employee. It is the starting point for the human resources officer in addressing proper matching of needs and resources. If properly written the description acts as reference material for recruiting the best candidate, gauges job performance, identifies the career path and reduces risk of discrimination and unfair labor practices.
The bookkeeping cycle is like a huge giant clock with several dozen gears from a multiple cog gear rotating the most frequently turning cog cascading into the one large gear that once turned changes the timer one year forward. The bookkeeper’s job is to make all the gears click and keep the system lubricated. At the end of the year, hopefully the final gear moves one click on time and the process starts all over.
There really is no undergraduate degree program for bookkeeping. So nobody has a college diploma from an accredited institution for bookkeeping; accounting yes, bookkeeping no. There are some programs in community colleges. They teach basic accounting principles, dual entry, payroll and lightly touch on the chart of accounts.
There are multiple positive benefits of QuickBooks for the business and directly for the bookkeeper too. In addition many of the various issues covered in Lessons One through Twenty-Five are distinguishable in the features offered in QuickBooks.
In the previous 25 lessons I covered a lot of different terms and this lesson is merely a summary of the various terms a bookkeeper encounters.
Generally Accepted Accounting Principles (GAAP) advocates using the accrual basis of accounting over cash basis. The difference between the two methods is important to understand as a bookkeeper.
The accounting equation is a simple formula used frequently in business. The formula is: Assets = Liabilities plus Equity OR Equity = Assets minus Liabilities.
In accounting there are books (journals) and ledgers for source entry of information. A trial balance is used to monitor the types of accounts. With the use of parent-child accounts and control accounts bookkeepers can generate a wide array of reports. Unfortunately this still lacks the breath of supporting information needed. So the profession uses schedules to augment the reports.
