Accounting tutorial

The accounting equation is the cornerstone of the entire accounting system. It represents the fundamental relationship between a company's assets, liabilities, and equity.  Every financial transaction, no matter how simple or complex, is recorded using this equation. Understanding the accounting equation is crucial for anyone involved in financial management, from business owners to accountants and financial analysts. The accounting equation is typically expressed as: Assets = Liabilities + Equity Liabilities = Assets - Equity  Equity = Assets - Liabilities  This equation must always balance, meaning that the value of a company's assets is always equal to the sum of its liabilities and equity. Let's break down each component: 1. Assets: These are resources owned by the company that have economic value and can be converted into cash. Examples include cash, accounts receivable, inventory, equipment, and real estate. Assets represent what a company owns. 2. Liabilities : T...

  What is a Wages Journal? A wages journal is a subsidiary ledger used to record all payroll-related transactions. This includes gross wages, deductions, net wages, and employer contributions to taxes or benefits. The wages journal serves as a detailed account of all payments made to employees over a specific period, usually aligned with the payroll cycle—weekly, bi-weekly, or monthly. Why is the Wages Journal Important? 1. Accurate Payroll Tracking:The wages journal provides a detailed record of all payroll transactions, ensuring that each payment and deduction is accurately tracked. This accuracy is essential not only for financial reporting but also for maintaining employee trust. 2. Compliance with Regulations:Payroll is subject to various laws and regulations, including tax laws, minimum wage requirements, and labor laws. The wages journal helps ensure that your business complies with these regulations by maintaining detailed records of all payroll activities. 3. Financial Rep...

The general journal is a fundamental accounting tool, often referred to as the "book of original entry." It is where businesses record their financial transactions in chronological order before they are posted to the general ledger. Uses of the General Journal The general journal is essential for recording non-recurring, complex, and infrequent transactions that do not fit neatly into specialized journals, such as cash receipts or sales journals. Common uses include: 1. Adjusting Entries: At the end of an accounting period, entries are made to ensure that revenues and expenses are recorded in the correct period.     2. Correcting Entries: If an error is discovered in a previously recorded transaction, a correcting entry is made in the general journal to rectify it.     3. Closing Entries: At the end of the fiscal year, the general journal is used to close temporary accounts, transferring their balances to permanent accounts like retained earnings.     4. D...

 In this lesson, we will learn  about Creditors returns journal. Purchases returns is when the business returns goods to the supplier.  Also called returns outwards What is Creditors returns journal? Is a book of first entry used for Purchases returns( when our business returns goods). It is also used for the following; It provides the total purchases returns amount for the month  It reduces the number of entries in the purchases returns account  It provides the purchases returns figure needed to draw up a control accounts  For inventory control purpose  Format of Creditors returns journal  Click on the link to see recording transactions in the Creditors returned journal 👇👇 https://youtu.be/_xnX_rPZMtc?feature=shared

 We have two types of returns in the business, which  are: sales returns journal and purchases returns journal but today we will learn about sales returns journal. Sales returns is when the customer returns goods to the business. Also called returns inwards  What is Debtors returns journal? Is a book of first entry used for sales returns( when customers returns goods) This journal also has other uses:  It provides the total sales returns amount for the month.  It reduces the number of entries in the sales returns account  It provides the sales returns figure needed to draw up control accounts. For inventory control purpose. Format of Debtors returned journal Click on the link to see recording transactions in the Debtors returns journal  https://youtu.be/g5TBUx8867U Good luck!!

 We will continue with our book of first entry, and today we will learn about Creditors journal What is Creditors journal ? Is a book of first entry used to record credit purchases.  A Creditors journal is also useful because: It provides the total credit purchases amount for the month  It reduces the number of entries in the purchases account  It provides the purchases figure needed to draw up the control accounts  For inventory control purpose  This book only used  for credit purchases. Format of Creditors journal  Click on the link to see recording transactions in the Creditors journal 👇👇 https://youtu.be/r4RxXIkmKjo Good luck 🤗

By now you have learnt about the cash transactions in a business, using book of first entry. In this lesson you will learn about credit transactions by Debtors  Debtors Journal   Debtors journal is a book of first entry used to record credit sales. This journal is useful because: It provides the total credit sales amount for the month It reduces the number of entries in the sales account in the general ledger  It provides the sales figure needed to draw up the control accounts  For inventory control purpose  In the book of Debtors journal we only record items which bought on credit  Format of Debtors journal  Recording transactions in the Debtors journal, click on the link👇👇 https://youtu.be/OuEuGd6NQiM

  What is cash book ? Is a combined T-account for cash and bank.   Therefore, cash book has a cash column on both debit and credit sides as well as a bank column on each side.  On the debit side we record all the money that we received in the business while on the credit side we record all the payments. The rule is that all money received by debit card will be entered in the bank column on the debit side, while all the payments made by debit card or EFT will entered in the bank column on the credit side. Withdrawals for cash that will be used in the business will be a contra entry, cash will be debited and bank will be credited.  Types of cash books    Two column cash book: a two money column cash book only makes provision for cash and bank columns. This type of cash book is practically uncommon since it is only used by the business that don't buy or sell on credit( does not offer/receive cash discounts). Three column cash book: a three money column ca...

In this lesson, you will learn how pretty cash book is used in a business. Petty cash book is a amount of money kept separate in the business to pay cash for small  amount expenses  What is the difference between cash,pretty cash and cash float?  Cash consists of motes and coin easily available in the business. This is money that kept in the business's safe so that cash transactions, such as paying wages or buying goods can be done in the business. Petty cash is the small amount of cash that the business keeps in a money box and Petty cashier manages it. It is used for making small cash payments.  Cash floa is the amount of the money made up of various denominations that each cash register has in the morning when the business opens. Is used for change when customers pay cash for goods.  The format of a petty cash book Petty cash book voucher  Petty cash voucher is an internal source document from which entries are made in the petty cash book. All the small ...

What is books of first entry ? Are books in which information from the source documents is recorded every day. Books of first entry are also called the journal of a business. You know that each transaction in a business has a source document linking to it. We use source document to record the transaction in the books of first entry.  We will learn eight(8) books of first entry, which are: The cash book : we record cash and bank transactions  Petty cash book : we record small cash payments  Debtors journal : we record Credit sales  Creditors journal : we record credit purchases  Debtors returned journal : we record sales returns  Creditors returned journal: we record purchases returns  Wages journal: we record payroll information  General journal: we record transactions that do not fit in other books of first entry  Advantages of books of first entry  The books of first entry are beneficial to the business because: They help summa...