FETAC LEVEL 5 MANUAL BOOKKEEPING 5N1354 Bookkeeping Manual & Computerised Fetac Level 5 FETAC LEVEL 5 MANUAL BOOKKEEPING 5N1354 An Introduction

Aim of the course The aims of the course is to provide you the learner with both an introduction to manual bookkeeping terms and principles, and the knowledge and skills necessary to keep an record of accounts up to and including the trial balance. Also the skills necessary to operate a computerised accounts system using an integrated accounts package.

Bookkeeping Manual & Computerised Fetac Level 5 Bookkeeping involves recording and presentation of the day- to-day transactions of a business. What is a Business? A business is an organisation that conducts commercial, industrial, or professional conduct. The most familiar we are with is a business whom we buy goods or services from.

Bookkeeping Manual & Computerised Fetac Level 5 What is the difference between bookkeeping and accounts? Bookkeeping steps are mechanical in nature. It is a regimented process which usually occurs in monthly cycles. It consists of transactions being entered, making adjustments and getting out reports at the end of each month. Accounting is whereby someone interprets the reports and results. It is less mechanical and more subjective.

Bookkeeping Manual & Computerised Fetac Level 5 Business What are the main transactions in a business? Purchasing products and services What is the difference between a product and a service? Selling products and services

Stages of a business transaction Bookkeeping Manual & Computerised Fetac Level 5 Stages of a business transaction Enquiry which leads to a Quotation A Quotation can lead to an Order A business puts the goods on order for the customer and delivers them with a delivery note 4. Customer receives the goods 5. An invoice is then sent to the customer 6. The customer then pays for the goods.

Bookkeeping Manual & Computerised Fetac Level 5 Customer and Supplier A customer is someone who buys goods or services from you. A supplier is someone who supplies goods or services to you

Bookkeeping Manual & Computerised Fetac Level 5 Source documents Source documents are the starting point of recording transactions into the company’s accounts. Important for a bookkeeper to identify each source document Each source document has to be entered into a particular Daybook.

Bookkeeping Manual & Computerised Fetac Level 5 Source documents There are different types of source documents Sales Invoices/credit notes Purchase Invoices/credit notes Customer receipts Remittance advices Petty cash vouchers

Bookkeeping Manual & Computerised Fetac Level 5 Source documents Sales invoice records the sales we have made to a customer Purchase invoice records the purchases we have made from a supplier Sales credit note is where a customer returns goods that were faulty or is not satisfied Purchase credit note is where we would find a fault with goods we received from a supplier

Bookkeeping Manual & Computerised Fetac Level 5 Source documents Customer receipts are records of monies received from our customers. Monies are subsequently lodged into the business bank account. Monies can be in the form of cash or cheques. The receipt can take the form of a bank lodgement stub.

Bookkeeping Manual & Computerised Fetac Level 5 Source documents Remittance advice When we make a payment to a supplier we attach details of the payment. This is usually has the invoice number and amount shown on it. A copy of the remittance is also kept for our records.

Bookkeeping Manual & Computerised Fetac Level 5 Source documents Petty cash Petty cash refers to a set amount of cash (eg €100) that is kept in a petty cash box. It is used for small expenses such as cleaning materials, tea, coffee sugar, postage, extra stationery. All monies used for petty cash are recorded on a petty cash voucher.

Bookkeeping Manual & Computerised Fetac Level 5 Source documents Other payments A business also keeps records of other payments such as salaries tax etc. These payments are not supplier payments.

Bookkeeping Manual & Computerised Fetac Level 5 Daybooks What are Daybooks? Daybook is a book that has many columns and is used to record the source documents. Daybook for each type of transaction There are 5 main daybooks Daybooks record: Date, details, total amount, vat, net amount, and has many analysis columns also.

Bookkeeping Manual & Computerised Fetac Level 5 Daybooks Daybooks are totalled each month Accuracy is of utmost importance when entering source documents into the daybooks. Information from the daybooks is carried on through to the ledgers. If there is a mistake in the daybooks it will carry through to the ledgers

Bookkeeping Manual & Computerised Fetac Level 5 Daybooks Sales invoices/credit notes Purchase invoices/credits Bank lodgement stubs Remittance advice Petty cash vouchers No source documents Sales/sales return daybook Purchase/return daybook Cash receipts Cash/cheque payments Petty cash General journal Source document Daybook

Bookkeeping Manual & Computerised Fetac Level 5 LEDGERS

Bookkeeping Manual & Computerised Fetac Level 5 What are Ledgers There are 3 ledgers we will be dealing with Sales Ledger Purchase Ledger Nominal Ledger/General Ledger

Bookkeeping Manual & Computerised Fetac Level 5 LEDGERS SALES LEDGER THE SALES LEDGER IS WHERE ALL OUR CUSTOMER INFORMATION IS HELD. EACH CUSTOMER HAS THEIR OWN ACCOUNT WITHIN THE SALES LEDGER. THE SALES LEDGER TELLS US HOW MUCH MONEY OUR CUSTOMERS OWE US ! CHEQUES AND CASH FROM CRD Invoices and credit notes from SDB

Bookkeeping Manual & Computerised Fetac Level 5 LEDGERS Invoices and credit notes from Sales Daybook SALES LEDGER Cheques and cash from cash receipts daybook

Bookkeeping Manual & Computerised Fetac Level 5 LEDGERS PURCHASE LEDGER The purchase ledger is where all our supplier information is kept. Each supplier has an account. The purchase ledger will tell us how much money we owe ! Invoices and credit notes from PDB Cheques paid from CPD

Bookkeeping Manual & Computerised Fetac Level 5 LEDGERS Invoices and credit notes from Purchase Daybook PURCHASE LEDGER Cheques From cheque payments daybook

Bookkeeping Manual & Computerised Fetac Level 5 Double Entry The method of bookkeeping we will be using is called: DOUBLE ENTRY Double entry is where each entry is entered twice. 1 Debit and 1 Credit. You need not know anymore at this stage.

Bookkeeping Manual & Computerised Fetac Level 5 DEBITS AND CREDITS DR stands for Debit CR stands for Credit In the Sales Ledger: Debits (Dr) are Positive Credits (Cr) are Negative Balance on the account is Dr-Cr = Balance Debit Sales in the Sales Ledger Credit Cash Received and Credit Notes in the Sales Ledger

Bookkeeping Manual & Computerised Fetac Level 5 DEBITS AND CREDITS DR stands for Debit CR stands for Credit In the Purchase Ledger: Debits (Dr) are Negative Credits (Cr) are Positive Balance on the account is Dr-Cr = Balance Credit Purchases in the Purchase Ledger Debit Cash Payments and Credit Notes in the PurchaseLedger