In analyzing business transactions, the bookkeeper must have an ample knowledge of the varied forms of values in the business transaction. And, identify the form of values received and the form of the values parted with. Then, being able to assign the account title for that form of value received or parted with; know when to debit or credit the value received or parted with; and discern the effects of business transactions in the accounting elements.
In accounting business transactions, the main task of a bookkeeper is to be able to journalize entries--identify, measure and record the business transactions and events transpired during an accounting period. Before a bookkeeper can journalize entries, he must obtain skills in analyzing the transactions.
In bookkeeping, the ultimate aim in recording transactions and events is to group the amounts of every value of similar form in order to determine the total of each classified form of value for a particular length of time.
Each value is classified according to accounting elements, namely, assets, liabilities, equity, revenue and expenses. It is important to know when to classify the expenditure whether an asset or expense.
Also, it is important to know the effects of expenses in the capital and the effects of income in the capital.
In short, below is a list of knowledge a bookkeeper must bear in mind when analyzing and accounting for business transactions:
- Varied forms of values (received and parted with) in the business transactions
- Debit the value received and Credit the value parted with
- Account and Account Titles
- Effects of business transactions in the accounting elements and accounting equation
- Expenditure is either classified as an asset or as an expense
- Effects of expenses in the capital/proprietorship
- Effects of income in the capital/proprietorship
- Journalizing and Journal Entries
- Analyzing and Journalizing
No comments:
Post a Comment