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It is compulsory for every business to keep records of its
business transactions. In order to do this a bookkeeper is
needed to assist in recording the financial transactions of the
business. This process involves the use of a computerised
accounting system or it can be done manually. Bookkeeping is primarily concerned with:
1.
Identifying;
2.
Measuring; and
3. Recording business transactions.
A bookkeeper will ensure that these transactions are accurately
recorded in the accounting system. The main purpose of bookkeeping is for the bookkeeper to record,
classify and report information about a business' financial
transactions. The bookkeeper prepares a set of books, namely the
accounts, for the business owner. This is normally conducted on
a weekly, monthly or quarterly basis depending on the number of
transactions along with the size and complexity of the business. Once up-to-date, these accounts are then passed onto and
reviewed by the accountant. The accountant checks them, makes
adjustments if necessary, and prepares a set of external
financial statements that comply with the Australian accounting
standards issued by the Australian Accounting Standards Board.
The accountant also prepares the annual income tax return of the
business for lodgement with the Australian Taxation Office (ATO). The overall objective of bookkeeping is to ensure that the
financial transactions of the business are accurately recorded
and information is presented to the business so that it can make
informed economic decisions about the allocation of their
resources.
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Bookkeepers can also prepare monthly or quarterly Business
Activity Statements (BAS). The BAS is then reviewed by the
accountant before lodgement with the ATO.
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A = L + E Assets = Liabilities + Equity This equation is necessary in order to understand the concept of
double entry bookkeeping. The equation means that if an asset is increased then a
liability or equity must increase by the same amount so that the
equation balances.
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The balance sheet reports on:
- Assets
- Liabilities
- Equity
Assets are future economic benefits owned or controlled by the
entity. They include anything owned by the entity that is
valuable and contributes to revenue generation, such as cash at
the bank, accounts receivable, inventory, land and buildings,
and plant and equipment. Liabilities are amounts owed by the entity to external parties
which include bank overdrafts, accounts payable, provision for
annual leave and long service leave, tax liabilities and loans
payable. Equity represents the investments made by the owners of the
business and the sum of accumulated profits made over the years
of operation. When a profit is made, equity increases and vice
versa.
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team can assist you with all your Bookkeeping needs.
Complete
and submit the Express Enquiry form on the top right hand side
of this page and we will contact you to discuss your enquiry
or call us on 1300 QUINNS (1300 784 667) to
arrange an appointment. |
