Business Administration & Management Mr. Bernstein Record Keeping – Time Consuming but Important, pp May 7, 2015

Business Administration & Management Mr. Bernstein Accounting Systems Businesses keep score GAAP: Generally Accepted Accounting Principles The Accounting Equation: Assets = Liabilities + Owner’s Equity Assets are anything of value (ie cash, equipment, accounts receivable) Liabilities are anything the business owes Owner’s Equity is the net worth of the business (Assets – Liabilities = Owner’s Equity) 2

Business Administration & Management Mr. Bernstein Accounting Systems Greatly aided by automation Can be in-house or outsourced Legal Requirements can be found at: &-Self-Employed/Recordkeeping 3

Business Administration & Management Mr. Bernstein Accounting Systems Accounting Procedures Create accounts Record entries into journals Use cash basis or accrual basis Post to ledgers Journals should be updated daily if not constantly Journal entries should be posted to ledgers weekly or more often 4

Business Administration & Management Mr. Bernstein Examples of Accounts for Journals Sales Office Supplies Rent Utilities Purchases Payroll Depreciation 5

Business Administration & Management Mr. Bernstein Examples of Accounts for Journals: Payroll Data 6