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Accounting
Vouching
Costin
Inventory
Journal Entry
Bank Reconciliation
Cost centres (project wise)
Party Reconciliation (Debtors & Creditors)
Sales, purchase, payment, receipt, debit note, credit note
Preparation and finalisation of P/L & B/s…etc various things
Vouching
Vouching is the act of reviewing documentary evidence to see if it properly supports entries made in the accounting records. For example, an auditor is engaged in vouching when examining a shipping document to see if it supports the amount of a sale recorded in the sales journal. Vouching can work in two directions. For example, an auditor can trace actual inventory items back to the accounting records to see if the items are properly documented, or start with the inventory records and trace back to the warehouse shelves to see if the inventory exists.
When engaged in vouching, an auditor is looking for any errors in the amount recorded in the accounting records, as well as ensuring that the transactions are recorded in the correct accounts. The auditor is also verifying that transactions have been properly authorized.
When vouching uncovers an error, the auditor may need to increase the sample size being audited in order to gain assurance that a system operates properly. An alternative is to engage in different auditing procedures.
Key Point of Vouching : –
Bank Reconciliation
Bank Reconciliation Procedure : –
Deduct any outstanding checks.
This will provide the adjusted bank cash balance.
Using the cash balance shown on the bank statement, add back any deposits in transit.
Next, use the company’s ending cash balance, add any interest earned and notes receivable amount.
Deduct any bank service fees, penalties, and NSF checks. This will arrive at the adjusted company cash balance.
After reconciliation, the adjusted bank balance should match with the company’s ending adjusted cash balance.
On the bank statement, compare the company’s list of issued checks and deposits to the checks shown on the statement to identify uncleared checks and deposits in transit.
Other Point: –
Costin
Costing, or cost accounting, is a system for determining a company’s cost of production. This type of accounting looks at both variable and fixed costs incurred throughout the production process. Companies use costing information to make informed business decisions and ensure each area of production is financially effective and efficient.
An organization’s internal management performs costing activities, and, unlike other forms of accounting, isn’t seen by outside clients or institutions. As a result, there are no set standards that cost accounting must meet, and it has more flexibility in comparison to other types of accounting.
Categories of business expenses
There are a few different categories of expenses that cost accounting looks at. These expenses include:
Variable costs: This type of expense is one that varies depending on the company’s needs and usage during the production process. For example, expenses incurred to produce more inventory to meet the demands of a busy season would be considered variable costs.
Fixed costs: Fixed costs are expenses that don’t change despite the level of production. For example, the monthly payment for the lease on a manufacturing building is considered a fixed cost.
Direct costs: These costs are directly related to manufacturing a product. For example, the employee wages for the company’s assembly line workers are a direct cost.
Operating costs: This type of expense refers to the daily operations of a company. For example, the cost of equipment needed to make products is an operating cost.
Types of costing : –
Lean costing
Absorption costing
Historical costing
Marginal costing
Standard costing
Activity-based costing
Inventory
Types Of Inventory
Finished goods: –
Work-in-progress: –
Raw materials: –
Key Points Of Inventory
Journal Entry
Purpose of Journal Entry
A journal entry requires the following elements: –
Cost centres (project wise)
Key Take A Ways
How a Cost Center Works: –
Purpose of a Cost Center: –
Party Reconciliation (Debtors & Creditors)
Key Take A Ways
Types of Reconciliation
Personal Reconciliation: –
Business Reconciliation: –
Preparation and finalisation of P/L & B/s…etc various things
Key Take A Ways
These statements let creditors and investors make well-informed decisions on whether to involve with or invest in a company.
Revenue, cost, accrual and prepaid, EBITDA, and net profit are some of the components that help format a standard P&L statement.
To ensure accurate P&L accounting, the professionals prepare separate ledgers first and then create a trial balance and profit and loss statements.
Profit and loss accounting is when companies prepare the profit and loss statements to figure out their financial performance for a fiscal quarter or year.