Hey All,
It has been long since updated the blog and it feels great to do so. But today I want to go to the simple accounting that can help some of the students out there who are new to accounting and need some getting used to.
As you know till now I have just given the Accounting Cycle and nothing about what works where, when and how. Today I'd start with the most basic thing that a new student to accounting should remember or take a look at it.
The first thing you should do as a new accounting student is know from where to start accounting. Accounting is just like crime solving in certain aspects. For any step towards accounting to be taken first you should have proof or evidence to what you are going to say or do. If you don't have that proof or evidence then everythingelse is puff of air. And if you do record it some how then you my friend will be in big big trouble and in for a joy ride. ;-)
So to record anything in accounting manner first get evidence that what ever you are recording exists. Now how could you get that evidence? And how would you believe if that evidence is real or made up? The evidence procedure would vary from transaction to transaction. It is the amount or materiality of the transaction that will define how greater effectivity will be needed for recording of the transaction. In many ways you can record the transactions only by having following evidence and they are deemed good enough as well as easier to keep and maintain. Such as
(i) Simple paper or chit with details of transaction amount of it signed by the authorised person.
(ii) Bill of the transaction
(iii) Voucher of the transaction etc.
And as transactions become important with bids or tenders from many people the accounting becomes just as fancy yet remains simple.
So today's Lesson#1: Before recording any transaction get evidence.
That's it for the day.
It has been long since updated the blog and it feels great to do so. But today I want to go to the simple accounting that can help some of the students out there who are new to accounting and need some getting used to.
As you know till now I have just given the Accounting Cycle and nothing about what works where, when and how. Today I'd start with the most basic thing that a new student to accounting should remember or take a look at it.
The first thing you should do as a new accounting student is know from where to start accounting. Accounting is just like crime solving in certain aspects. For any step towards accounting to be taken first you should have proof or evidence to what you are going to say or do. If you don't have that proof or evidence then everythingelse is puff of air. And if you do record it some how then you my friend will be in big big trouble and in for a joy ride. ;-)
So to record anything in accounting manner first get evidence that what ever you are recording exists. Now how could you get that evidence? And how would you believe if that evidence is real or made up? The evidence procedure would vary from transaction to transaction. It is the amount or materiality of the transaction that will define how greater effectivity will be needed for recording of the transaction. In many ways you can record the transactions only by having following evidence and they are deemed good enough as well as easier to keep and maintain. Such as
(i) Simple paper or chit with details of transaction amount of it signed by the authorised person.
(ii) Bill of the transaction
(iii) Voucher of the transaction etc.
And as transactions become important with bids or tenders from many people the accounting becomes just as fancy yet remains simple.
So today's Lesson#1: Before recording any transaction get evidence.
That's it for the day.
