Accounting

The measurement of economic activity and encompasses the gathering of information, classifying the data, entering the data into a database (most often an accounting software), generating reports for management and finally interpreting the outputs.

Bookkeeping – Controls in Accounting (Lesson 95)

The President of the Ontario Center for Advanced Manufacturing stated that back in the early 80’s IBM Canada Ltd. ordered parts from a new supplier based out of Japan.   The order allowed an acceptable tolerance of 1.5 percent (%) defective parts.  The Japanese supplier sent the order in two separate packages.  The second package had …

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Bookkeeping – Employer Provided Vehicle (Lesson 94)

With small business it is very common to provide a vehicle to the owner and key employees.  It is often done in the construction industry and transportation sector.   The idea is to provide transportation for not only the convenience of the employer but as retention tool for employees.  In general, the total costs to operate …

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Bookkeeping – Other Employer Provided Benefits (Lesson 93)

Other employer-provided benefits are composed of three groupings of benefits: Welfare Other (Life Insurance, Auto & Education) Fringe This lesson explains each group and illustrates how the accountant records the benefit for bookkeeping and payroll tax purposes.  This lesson is a continuation of the benefits series including health, retirement; HSA, HRA and FSA’s; and cafeteria …

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Bookkeeping – Cafeteria Plans (Lesson 92)

Cafeteria plans, a.k.a. Section 125 plans, are employer sponsored benefit packages that allow employees to choose from a menu of options and allocate their allotted share to the items they pick.  With this type of plan the employer agrees to an allowance per employee to contribute to the package.  The employee may either take the allowance …

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Bookkeeping – Employee Health Insurance Mandate (Lesson 89)

After three decades of discussion, in-fighting and wrangling, Congress passed a health insurance mandate along party lines of vote.  This health insurance mandate changed the rules for employers and affects the accounting department and in particular, the proper bookkeeping for the respective amounts paid by both the employer and employee.  To acquire the advanced bookkeeping …

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Bookkeeping – Employee Benefits (Lesson 88)

There are a multitude of employee benefits employers provide to their employees.  This series covers several groups of benefits and explains the legal and accounting issues related to them.  This particular lesson introduces the concepts behind employee benefits and the basic accounting process.   In addition, I’ll explain the tax consequences and the corresponding payroll process …

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Bookkeeping – Estimating Extraordinary Items (Lesson 87)

The final type of estimating relates to unusual and infrequent items.  These are commonly referred to as extraordinary items.  Basically, they rarely occur but do happen once or twice over an economic cycle.  The following are examples: * Accidents * Losses Associated with Natural Disasters * Fires * Work Stoppage (Labor Strike, Civil Unrest, Community …

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Bookkeeping – Estimating Warranties (Lesson 86)

Another estimate requirement for accountants deals with warranties.   Warranties are assurances to customers that the product sold or service rendered will perform as stated or contracted.  Often products or services are defective and therefore require replacement or repair.  To properly match the cost of warranty work against the revenue generated an estimate of costs is …

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