Adopting an accounting system online book

Adopting an Easy-to-Use Accounting System
a guidebook from Smallbusinesstown.com
Contents:
Introduction to Accounting .........................................6
The Accounting Cycle............................................. 16
A) Transaction Occurs............................................ 18
Supporting Documents ................................................................18
B) Transaction Entered in Journal .......................... 23
Cash vs. Accrual Accounting Methods.........................................23
Single & Double-entry Systems of Accounting............................27
Understanding Debits & Credits...................................................28
Making Journal Entries ................................................................31
Common Journal Entries for a Small Business ............................33
MORE Journal Entries for Small Businesses ...............................37
C) Journal Entry Posted to General Ledger ............ 53
The Five Basic Types of Accounts ...............................................53
Setting up a Chart of Accounts ....................................................54
The Traditional Ledger ................................................................71
Making Ledger Entries.................................................................72
The Synoptic Ledger ...................................................................76
D) Trial Balance Prepared ...................................... 78
E) Trial Balance Adjustments Made........................ 80
Types of Adjusting Entries...........................................................80
Completing a Trial Balance Worksheet ........................................82
F) Financial Statements Prepared.......................... 84
Preparing a Balance Sheet ..........................................................85
Preparing an Income Statement ..................................................88
How Detailed Should Financial Statements Be? ..........................90
How Often Should Statements Be Prepared? ..............................90
Rules Regarding Statements in Ledgers......................................91
G) Financial Statements Posted to Ledger.............. 92
H) Books Closed & Prepared for Next Cycle........ 93
Year End Book Closing Procedures.............................................93
Setting-Up an Accounting System .......................... 97
Single-Entry Cash Based Systems ..............................................97
Double-Entry Accrual Based Systems........................................105
Condensed Single-Entry Accounting Systems ...........................114
Envelope Journal Systems ........................................................115
Single-Entry Income & Expense Journal Systems......................116
Commercial Accounting Systems...............................................121
Computerized Accounting Systems ...........................................124
Procedures for Handling Payroll ........................... 129
Basic Payroll Record- Keeping Requirements............................129
U.S. Payroll Record-Keeping Requirements ..............................130
Canadian Payroll Record-Keeping Requirements ......................134
Statement of Earnings and Deductions......................................138
General Accounting Tips ...................................... 141
Glossary of Accounting Terms.............................. 148
FIG. 1 – Trial Balance Worksheet ..............................................151
FIG. 2 – Income Statement........................................................152
FIG. 3 – Balance Sheet .............................................................153
FIG. 4 – Weekly Sales & Cash Report .......................................154
FIG. 5 – Single-entry Cash Based System.................................155
FIG. 6 – Double-entry Accural Based System ............................158

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