Bookkeeping and Payroll

• Bookkeeping is recording all the transactions arising from your business activities which can be expressed in money. This will allow you to determine how much money you have earned and spent.
• Three kinds of records

  1. Journal
  2. Ledger
  3. Subsidiary
• The Journal is commonly known as "book of original entry" because it is used to initially record business transactions and events.
• The Ledger or commonly known as the "book of final entry" is used to record the entries recorded in the journal.
• This subsidiary book records the cash and credit sales of the company.

  Sales Subsidiary Book
• This subsidiary book records the cash and credit purchases made by the company.

  Purchases Subsidiary Book
• This subsidiary book records the operating expenses made by the company either in cash or credit.

  Disbursement Subsidiary Book
• This subsidiary book records the cash received by the company whether from sales or from credit sales.

  Cash Receipts Subsidiary Book
• Based on the dual aspect concept, every transaction has a two sided-effect to the extent of the same amount in the accounting books:

  1. Debit
  2. Credit
• Debit is derived from the Latin words "debitum" and "debiri"
• Credit is derived from the Latin words "Creditum" and "crediri'
• Account in an accounting form of record in which the effect of similar business transactions affecting the basic accounting elements are grouped or classified.
• The chart of accounts is a list of all accounts complied of the basic account elements: Assets, Liabilities, Owner's Equity, Revenue, and Expenses
• The normal balance of an asset is debit.
• Any increase in asset should be placed in the debit side.
• Any decrease in asset should be placed in the credit side.
• The normal balance for liabilities is credit.
• Any increase in liabilities should be placed in the credit side.
• Any decrease in liabilities should be placed in the debit side.
• Salaries of workers can be computed on a daily, weekly, twice a month, or monthly basis.

  Payroll