I'm new to this forum and I'm a junior only recently started working in practice in London, whilst studying for ACCA. We currently use Xero for bookkeeping and IRIS for accounts production. I hope you don't mind me asking some basic bookkeeping/accounting questions just to sharpen up my knowledge.
When preparing a full set of accounts I'm aware that closing balances and opening balances must be correct.
Once the bank has been reconciled, I'm aware that balance sheet items play the main part in preparing an accurate set of accounts.
Fixed assets
- calculate depreciation charge for year and accumulated depreciation
- consider additions and disposals
Current assets
Debtors - analyse debtor list to ensure accurate set of debtors,
credit note any bad debts, (CR debtor, dR Bad debt)
credit any paid to personal accounts (CR debtor, Dr DCA)
Bank - ensure closing bank matches closing bank statements
sorry for the lack of reply, think that you've just managed to hit one of those times where all of the regulars are busy.
I take it that you are still at the early stages of ACCA. Have you taken F3 yet or will you be taking it soon?
If you have exemption from F3, perhaps due to a relevant degree, I would advise not taking the exemption in order to give yourself more confidence with bookkeeping which as you progress you will find that to be the foundation stones of everything.
A good book that is worth a few pence and a weekend of your time is the BPP AAT practice and revision kit for units 1-4. Here's a link :
Not exactly rocket science but a good confidence builder.
I think that some of your questions are actually software specific rather than bookkeeping theory.
One point about the accounts is that the P&L has equal prominance to the Balance sheet. Think of it that the P&L is purely about this year and has the main effect upon the tax situation so tends to be what small clients are most interested in. The balance sheet gives a snapshot of the companies overall status.
Both documents have equal critical importance.
On the two questions (I'll try to answer in generic rather than software specific response)
In the current period you have
Dr Expense
Cr Accruals
Or, you may have
Dr Expense
Cr Supplier
If the latter then at the period end some software that expects you to close one period in order to move to the next may expect you to move the supplier balances to accruals where other software (such as VT) recognises that the Supplier balances are accruals.
The key is that the expense must show in the period to which it relates, not the period in which it is paid (unless one is using cash accounting).
On the second question proposed dividends are not recorded.
If a dividend has been declared then if it is not paid in cash then it is credited to the DLA.
Once that is done the DLA is basically divorced from the dividend. It is simply money that was paid to the director.
You touch on a standard use of this where the director has taken sall payments throughout the period and the dividend clears that balance.
It is ok (and nowdays common) for the business to owe the director money through the period end but if the director owes money to the business then that is in effect a beneficial loan.
Good luck with your ACCA studies. let us know where you are and how you are progressing as we may be able to give you some popinters for specific papers.
All the best,
Shaun.
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
yes, at times the forum gets really busy, sometimes quite heated, often a lot of fun.
The contributors here are a good mix of all of the major professional bodies from ICB and IAB through to ICAEW, ACCA and ICAS and include all bodies inbetween. We've also got some members with financial qualifications from banking, payroll and credit management so overall a really good spread.
Of course the contributors here for the most part run their own bookkeeping and accountancy practices and give their time here for free so there are times that the regulars are too busy to respond immediately which is that seems to have happened with this post.
That a three day old post was still on the front page spoke volumes. Much of the time posts made in the morning have disappeared off the front page by close of play that day.
When people such as myself visit the site after a few days absence the first thing that we tend to do is skim down the posts to see if there are any with zero responses and try to respond to those first so with a few rare exceptions everyone does get answered.
kind regards,
Shaun.
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
Hey, really appreciate the response, will follow up in more detail when I have time.
But will definitely be taking up your advice on extra readings, as I did unfortunately take up that exemption.
Just a quick question as I plan to use this forum regularly. does it get really busy or really active? or will it in future ?
Thanks again
Welcome to the forum.
It's worth having a route around the forum....it has it's serious and silly moments and will be very useful to you I'm sure. I've not been on for a week but am usually on every day, just been run off my feet so not had the chance to catch up properly, but clearly Shaun has answered. I've found personally that people seem to like to answer one or two questions rather than a raft at a time, but it does depend on the topic and people online. Enjoy your job!
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Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
