NASCLA Contractos Guide to Business, Law and Project Management Financial Section

NASCLA
Contractos
Guide
to
Business,
Law
and
Project
Management
Financial
Section
Bookkeeping
-
ANS-Involves
the
accurate
recording
of
all
financial
transactions
that
occur
in
the
business.
Financial
Statements
are
derived
from
this
information
The
Accounting
Cycle
-
ANS-1)
Classifying
and
recording
Transactions.
2)
Posting
transactions.
3)
Preparing
a
trial
balance.
4)
Preparing
an
adjusted
trial
balance.
5)
Preparing
financial
statements.
6)
Analyzing
financial
statements.
Transaction
-
ANS-Is
an
event
that
either
increases
or
decreases
an
account
balance.
Source
Document
-
ANS-Is
the
proof
that
a
transaction
took
place.
Examples
of
Source
Documents
-
ANS-Cash
Receipts,
Credit
card
receipts,
customer
invoices,
purchase
orders,
materials
invoices,
deposit
slips,
time
sheets
Journals
-
ANS-Daily
transactions
are
recorded
in
a
set
of
books
called..
Typical
Journals
that
companies
keep
include
-
ANS-Cash
Receipts
and
Sales
Journal,
Purchases
Journal,
Cash
Disbursements
journal,
Payroll
journal,
General
journal
Cash
Receipts
and
Sales
Journal
-
ANS-is
used
when
cash
comes
in
or
a
sale
is
charged
to
a
customer.
Purchases
Journal
-
ANS-Tracks
all
purchases
made
by
the
company.
Cash
Disbursements
Journal
-
ANS-Is
used
when
cash
is
paid
out,
examples
of
this
would
be
Transactions
such
as
loan
payments,
and
payments
on
vendor
invoices
are
recorded
here Payroll
Journal
-
ANS-Is
used
to
record
a
summary
of
payroll
details
such
as
salaries
and
wages,
deductions,
and
employer
contributions.
General
Journal
-
ANS-Used
for
non
cash
transactions
Posting
-
ANS-Is
the
process
of
transferring
the
transactions
recorded
in
the
journals
to
the
appropriate
accounts.
Account
-
ANS-Is
a
register
of
value
Examples:
Asset,
Liability,
Equity,
Income,
Expense
Most
companies
use
5
Basic
types
of
accounts
which
are..
-
ANS-Asset,
Liability,
Equity,
Income,
and
Expense.
Chart
Of
Accounts
-
ANS-Is
a
NUMBERING
SYSTEM
that
organizes
these
account
types
EXAMPLE:
1000-1999:
Assets
2000-2999:
Liabilities
3000-3999:
Equity
4000-4999:
Revenue
5000-5999:
Cost
Of
Goods
Sold
6000-6999:
Expenses
7000-7999:
Other
Revenue
(i.e.,
interest
income)
8000-8999:
Other
Expenses
(i.e.,
income
taxes)
Side
note*
Theses
accounts
should
be
located
in
the
general
ledger
General
Ledger
-
ANS-Is
where
the
chart
of
Accounts
are
located
Transactions
that
are
posted,
you
are
transferring
them
from
____
___________
to
the
general
ledger
-
ANS-The
Journal
Trial
Balance
looks
like
this
-
ANS-Account
Type
Debits
Credit
Assets
Increases
Decreases
Liabilities
Decreases
Increases
Equity
Decreases
Increases
Income
Decreases
Increases
Expenses
Increases
Decreases