Review CBM 2 Accounting

Prepare and maintain payroll records using computerized and manual systems (ch 13) Where does the employer keep the records of employee’s payroll?

Payroll register

Understand how to create and maintain the accounts receivable subsidiary ledger (ch 11) Which transactions are recorded in this ledger account? – Money received from customers who owed money. Where do we find the information? – From Cash receipt Journal (A/Receivable will be credited.(What is owed gets reduced) Cash will be debited)

Understand how to post information from the journal to the ledger (ch 11) What are the steps to post ? – Date – Journal page number – Amount – Calculate new balance – Write ledger account number in journal

Describe the advantages and disadvantages of credit Advantages: – Create a credit history. – Get items before you actually have the money Disadvantages: – Debt – Pay late: create a bad credit report – Interest makes you pay more for an item

Understand the relationship of the journal to the ledger General Journal, Sales Journal, Purchase Journal, Cash receipts Journal, Cash Payments Journal From these journals, we post to the subsidiary ledger accounts which are in the general journal

Understand how to prepare federal, state, and local payroll reports (ch 12 and 13) W 2- record of an employee’s Gross Income and taxes withheld W4- Where the employee indicates the number of withholdings (the more withholdings, the less taxes paid.) W 3- What the employer reports to the federal govt. what he paid and withheld from employees

Plan investment strategies for today and for the future High (real estate, collectibles, any minerals, stocks) and Low risk investments (cd’s; savings account, bonds)

Prepare and maintain payroll reports using manual and computerized systems (Ch 12 and 13) FICA: Social Security and Medicare tax – both employer and employee pays. SS 6.2 % x gross pay (Has tax base) Medicare 1.45% x gross pay (no tax base) The employer has to match it Employer only pays: unemployment taxes – up to $7000 earnings per employee.

Understand how to post information from the journal to the ledger ch 11 Know the steps. Starting a new page: put a check mark in the post ref column where the balance is brought forward

Understand how to calculate employer's payroll taxes and benefits paid by the employer (Ch 12 and 13) Net pay: gross pay minus deductions Week has 40 hours. All hours over 40 are paid 1.5 rate – If someone worked 45 hours at $10 hour. – $40 x $ hours x $15 = $400 + $75 = $475

Analyze the trial balance to determine the necessary adjustments to prepare financial statements (ch 8) Trial balance: all the balances from the ledger accounts We use the Worksheet to determine the trial balance. When we take inventory, what has been used in supplies and pre paid insurance, we adjust it and it becomes an expense

Demonstrate a basic understanding of various investment options High Risk and Low risk

Calculate employer's payroll taxes Employers pay FICA taxes (social security, Medicare) Employers pay unemployment taxes to the state and to the federal govt. Employees pay federal taxes (income tax) and FICA taxes

Understand how to use credit now and in the future Future: student loans, mortgage loans, car loans Now: credit card or a charge card

Understand how to create and maintain the accounts receivable and accounts payable subsidiary ledgers (ch 9) Accounts receivable has a normal debit balance So when cash is received, A/R will get credited

Understand how to calculate deductions including Social Security tax (ch 12 and 13)

Explain the purpose of the closing process and journalize post-closing entries (ch 8 ) Supplies expense and insurance expense affect the Income Summary and will affect the capital account To close an account, we reduce it to a zero balance Permanent accounts: real accounts (assets and liability accounts) Temporary accounts are called nominal accounts (revenue, expense and drawing accounts) Start each year with a zero balance

Understand how to prepare payroll reports (ch 12 and 13) Go through the PPT hand outs

Calculate employer's payroll taxes (Ch 12 and 13) Study notes and PPT handouts

Create and maintain the accounts payable subsidiary ledger; Post information from the journal (ch 9) Study notes and handouts

Understand how to prepare a post- closing trial balance (ch 8) After adjusting Supplies and Insurance Expenses and closing all accounts, the post- closing trial balance is prepared

Understand the closing process Ch 8 Go through Notes and PPT handouts

Analyze the trial balance to determine the necessary adjustments to prepare financial statements

Understand how to create and maintain the accounts receivable subsidiary ledger and an account for credit card sales

Develop a working knowledge of individual income tax procedures and requirements

Understand the closing process Ch 8

Understand how to prepare payroll reports Ch 12 and 13

Understand how to calculate net pay Ch 12 and 13

Understand how to create and maintain the accounts receivable subsidiary ledger

Examine and describe the basic types of insurance Life Insurance Health insurance Liability Auto