1. RECORD-KEEPING AND ACCOUNTING
Entrepreneurship
5/7/2018
Chapter 11
RECORD-KEEPING AND ACCOUNTING
11.1 Set Up a Record-Keeping System
11.2 Understand Basic Accounting
11.3 Track Your Inventory
Chapter 11

2. Lesson 11.1 SET UP A RECORD-KEEPING SYSTEM
Chapter 11
Lesson 11.1 SET UP A RECORD-KEEPING SYSTEM
GOALS
Keep journals, ledgers, and other types of important business records.
Learn about electronic record-keeping.

3. TYPES OF RECORDS Journals Ledgers Bank statements Payroll records
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TYPES OF RECORDS
Journals
Ledgers
Bank statements
Payroll records
Tax records

4. Chapter 11
JOURNALS
Are accounting record of the transactions you make. Journals separate business transactions by account
Sales journal
Used to record only sales of merchandise on account. Get now pay later.
Cash payments journal
Used to record any Cash or check payments that a business makes.
Cash receipts journal
Used to record all cash receipts transactions.
Purchases journal
Used to record purchases of merchandise on account.
General journal
This is used to record any kind of transactions. Some busineeses use only GL.

5. Chapter 11
LEDGERS
Businesses use general ledgers to which they post the items that they record in their journals. Ledgers separate transactions by account. Ex. Expenses (rent, utilities)
Subsidiary ledgers
Is a ledger that is summarized in a single general ledger account.
Aging tables
Is a record-keeping tool for tracking accounts receivable accounts. Ex. p273

6. Chapter 11
BANK STATEMENTS
A check register is a book in which you record the dates, amounts, and names of people or businesses to whom you have written checks.

7. Chapter 11
PAYROLL RECORDS
A payroll is a list of people who receive salary or wage payments from a business.
A payroll register includes the following information:
Employee’s name
Number of hours worked
Regular and overtime earnings
Federal, state, and local taxes deducted
Social security and Medicare contributions deducted
Other deductions

8. TAX RECORDS Income tax Payroll deductions Sales tax
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TAX RECORDS
Income tax
Business that earn profit must pay income tax. These taxes are paid quarterly ( every 3 months)
Payroll deductions
Sales tax

9. COMPUTERIZED RECORD-KEEPING
Chapter 11
COMPUTERIZED RECORD-KEEPING
Advantages of computerized record-keeping
Store and analyze data
Link records - sale, Income statement and Inventory
Reduce errors -
Correct errors
Disadvantages of computerized record-keeping
Staff resistance
Unauthorized access
Computer problems

10. Lesson 11.2 UNDERSTAND BASIC ACCOUNTING
Chapter 11
Lesson 11.2 UNDERSTAND BASIC ACCOUNTING
GOALS
Demonstrate understanding of balance sheets, income statements, and cash flow statements.
Determine whether you need a professional to help you with your record-keeping and accounting.

11. TYPES OF FINANCIAL STATEMENTS
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TYPES OF FINANCIAL STATEMENTS
The balance sheet
The income statement
The cash flow statement

12. Chapter 11
THE BALANCE SHEET
A balance sheet lists what a business owns, what it owes, and how much it is worth at a particular point in time.
Assets = Liabilities + Owner’s equity

13. THE INCOME STATEMENT Revenue Cost of goods sold Operating expenses
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THE INCOME STATEMENT
Revenue
Cost of goods sold
Operating expenses
Net profit before taxes

14. THE CASH FLOW STATEMENT
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THE CASH FLOW STATEMENT
Net cash flow is the difference between cash receipts and disbursements.
Cash receipts – Disbursements = Net cash flow
Positive or negative cash flow
Economic effects on cash flow

15. USE PROFESSIONALS Accounting assistants Certified public accountant
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USE PROFESSIONALS
Accounting assistants
Certified public accountant

16. Lesson 11.3 TRACK YOUR INVENTORY
Chapter 11
Lesson 11.3 TRACK YOUR INVENTORY
GOALS
Track your inventory using a perpetual inventory method and a periodic inventory method.
Determine how much inventory to keep in stock.

17. TRACK YOUR INVENTORY Perpetual inventory method
Chapter 11
TRACK YOUR INVENTORY
Perpetual inventory method
Take a physical inventory
Periodic inventory method

18. MANAGE YOUR INVENTORY Costs of carrying inventory
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MANAGE YOUR INVENTORY
Costs of carrying inventory
Obsolescence
Deterioration
Interest fees
Insurance
Storage
Costs of being out of stock
Turnover rates