Accounting: An Introduction to Principles and Practice, 9th Edition PDF by Edward A Clarke, Yvonne Wilson and Michael Wilson

By

Accounting: An Introduction to Principles and Practice, 9th Edition

By Edward A. Clarke, Yvonne Wilson and Michael Wilson

Accounting: An Introduction to Principles and Practice, 9th Edition

Contents:

Guide to the text ix

Guide to the online resources xi

Preface xiii

Acknowledgements xiv

1 Accounting: its foundations 1

Introduction 1

Introduction to business operations 2

Basic accounting terms 5

Types of business ownership, their advantages and disadvantages 10

Accounting assumptions: conventions and doctrines 13

The Conceptual Framework and accounting standards 17

Ethics as it applies to accounting 21

2 Financial transactions and their documentation 26

Introduction 26

Personal transactions 27

Business transactions 28

Documentation 30

Filing of documentation 50

3 The accounting equation 55

Introduction 55

The accounting equation 56

Balance sheet (or statement of financial position) 62

The expanded accounting equation 65

Chart of accounts 70

4 Transactions, general journals and double-entry processing 79

Introduction 79

An overview of the accounting process 80

Introduction to the general journal 80

Introduction to the goods and services tax (GST) 82

Transactions entered in the general journal 84

General journals posted to the general ledger 92

Trial balance: summary of general ledger balances 98

5 Transactions, specialised journals and double-entry processing 111

Introduction 111

The process so far 112

Specialised journals 113

Source documents entered in journals 114

Preparation of specialised journals 121

Sales journal: sell now, be paid later 122

Purchases journal: buy now, pay later 130

Cash receipts journal 138

Cash payments journal 147

Cash receipts journal with accounts receivable 155

Cash payments journal with accounts payable 155

Transactions review 163

Discounts: result of credit transactions 170

Cash accounting 173

Organisational standards and procedures 177

6 Separate ledgers for accounts receivable and accounts payable 184

Introduction 184

What can we now do? 185

Subsidiary ledgers and control accounts 185

Relevance of the inventory system to receivables and payables 187

Accounts receivable control and subsidiary ledger 188

Accounts payable control and subsidiary ledger 196

Administration of accounts receivable and accounts payable 210

Reconciliations 220

Reconciliations: accounts receivable 220

Reconciliations: accounts payable 233

Other subsidiary ledgers and control accounts 241

7 Journals and ledgers for special transactions 258

Introduction 258

Commencement of a business 259

Buying another business 260

Introduction of additional capital 261

Drawings of funds and goods 261

Purchase of non-current assets 263

Sale of a non-current asset at book value 264

Interest receivable and payable on overdue accounts 265

Dishonour of a cheque 267

Bad debt write-offs 272

Bad debts recovered 275

Bills receivable accepted and met 276

Bills payable accepted and met 278

Computerised accounting and special transactions 279

8 Management controls over cash 290

Introduction 290

Principles for internal control of cash 291

Bank reconciliation 293

Petty cash imprest system 322

9 The general ledger and financial reports 333

Introduction 333

Linking the general ledger to financial reports 334

Close general ledger accounts 338

Closing general journal entries 350

Income statement: trading basic format 351

Balance sheet: basic format 357

Account allocation to financial statements 361

Preparing financial reports for a servicing business 374

10 Matching expense and revenue to the accounting period 386

Introduction 386

Balance day adjustments 387

  1. Expense accrued: expense incurred not yet processed 391
  2. Expense prepaid: expense processed but not yet incurred 398
  3. Revenue accrued: revenue not yet received 402
  4. Revenue received in advance: revenue received not earned 407
  5. Accounts receivable: uncollectable 411
  6. Depreciation 418
  7. Variance between perpetual inventory records and physical inventory 422
  8. Leave provisions: annual leave, sick and carer’s leave and long service leave 432

Prepare adjusted trial balance 438

Summary of balance day adjustments 440

Reversals 441

Standing journals 446

11 Preparing final reports from a worksheet 458

Introduction 458

Steps in preparing the 2-column worksheet: trial balance 459

8-column worksheet: format and columns 474

8-column worksheet incorporating balance day adjustments 476

From the 8-column worksheets to financial statements 483

Worksheets for simple service industry 492

12 Advanced management reports and correction of errors 499

Introduction 499

Review of end-of-period processes 500

Periodic and perpetual inventory: trial balance, balance day adjustments and closing journals 501

Both periodic and perpetual inventory 508

Financial statements from an 8-column worksheet or the adjusted trial balance 511

Preparation of financial statements 515

Correction of errors 527

13 Accounting for non-current assets 552

Introduction 552

Key terms 553

Asset register 555

Depreciation expense: its nature and determination 558

Procedures for calculation of depreciation methods and recording in the accounts 560

Derecognition or disposal of depreciable assets 577

14 Payroll preparation and accounting entries 591

Introduction 591

Main payroll functions and processes 592

Employment conditions 592

Employee benefits and payroll 594

Payroll preparation 598

Accounting for payroll 605

Provisions for leave 612

Pay-as-you-go – PAYG withholding 613

Other employer obligations 621

Glossary 629

Index 634

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