A course in beginning bookkeeping

187 Pages·010 MB·English

by  Kitchen, William T

A COURSE IN BEGINNING BOOKKEEPING
A P roject
Presented to
the Faculty of the School of Education
The U niversity of Southern C alifornia
In P a rtia l F ulfillm ent
of the Requirements fo r the Degree
Master of Science in Education
by
W illiam T. K itchen
January 1950
UMI Number: EP45913
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UMI EP45913
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cJ K
This project report, written under the direction
of the candidate’s adviser and approved by him,
has been presented to and accepted by the Faculty
of the School of Education in partial fulfillment of
the requirements for the degree of Master of
Science in Education.
Adviser
Dean
i i
TABLE OF CONTENTS
CHAPTER PAGE
PART I . A PERSONAL SERVICE BUSINESS
HOW TO KEEP THE SIMPLEST KIND OF RECORDS
1, THE BALANCE SHEET; HOW TO DISCOVER WHAT YOU ARE
WORTH................................................................................................................. 2
A. MOTIVATION: Values of finding out what you
are worth ................................................... 2
B. DIRECTIONS: Steps to take in discovering your
fin a n c ia l condition • • • • • • .......................... . . 2
1. ASSETS: How to l i s t the items of value
which you own ............................... 2
2. LIABILITIES: How to l i s t your outstanding
debts • • • • • • • • * • • • • • • • • • • 3
3. PROPRIETORSHIP: How to find your net
worth or c a p ita l ............................... • • • • • • 3
4. BALANCE SHEET: How to prepare a statem ent
of the worth of a sm all, personal service
business ..............................................• . . * . 4
5. SOURCES FOR THIS CHAPTER: Where to get
fu rth er a ssistan ce ......................................... • • • 5
C. ACTIVITY ASSIGNMENTS: Some learning experi­
ences to enhance your s k ill in preparing
balance s h e e t s ......................... 5
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CHAPTER PAGE
D. EVALUATION: Some ways your s k ill in preparing
balance sheets may be c h e c k e d ......................... 7
2. THE LEDGER AND JOURNAL: HOW TO OPEN THE BASIC
BOOKS OF THE BUSINESS.....................................................................10
A• MOTIVATION: Advantages of keeping a ledger
and a j o u r n a l ...............................................................................10
B« DIRECTIONS: Steps to take in opening the
books .................................................................................. . . 10
1* JOURNALIZING: How to record the balance
sheet in the journal .....................................................10
2* POSTING: How to tra n sfe r the opening
entry from the journal to the ledger • • . 12
3. POSTING RE TERENCES: How to keep track of
what has been posted • • • • • • • • • • • 14
4. SOURCES FOR THIS CHAPTER: Where to get
fu rth e r assistan ce .......................................... 17
C. ACTIVITY ASSIGNMENTS: Laboratory experiences
that may help you improve your s k ill in
opening the r e c o r d s .............................. 17
D. EVALUATION: Some ways your s k ill in opening
books may be measured .................................................. 18
3, DAILY TRANSACTIONS: HOW TO ACCOUNT FOR THE
REGULAR OPERATIONS OF THE B U SIN ESS.................................22
A. MOTIVATION: Advantages to be gained if you
record day-by-day changes 22
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CHAPTER PAGE
B. DIRECTIONS: Steps to take in accounting for
d aily tran sactio n s .................................................................. 22
1. JOURNALIZING: How to record tran sactio n s
in the journal subsequent to the opening
entry ............................................................. 23
2m POSTING: How to post items in the ledger
subsequent to theo pening entry ............................. 24
3. DEBITING AND CREDITING: How to record
tran sactio n s so th at the left-h an d side
of your accounts w ill equal the rig h t-
hand s i d e .................................................................................. 26
4* INVESTMENT: How to record an increase
in c a p ita l i n v e s t e d ....................................................... 26
5* EQUIPMENT: How to record the purchase
of fixed assets on c r e d i t . 26
6. ACCOUNTS RECEIVABLE: How to record the
rec eip t of cash from a debtor • • • • • • 27
7. ACCOUNTS PAYABLE: How to record the
payment of cash to a c re d ito r • • • • • • 27
8* CASH SALE: How to record sales fo r cash « 28
9m CREDIT SALE: How to record sales on
account ....................................................... 28
10, CASH EXPENDITURE: How to record a cash
expense item .......................... • • • • • • • • • 28
V
CHAPTER PAGE
11# CREDIT EXPENDITURE: How to record an
expenditure on account .......................... 29
12. SOURCES FOR THIS CHAPTER: Where to get
fu rth e r a ssistan ce • .................................................... 29
C. ACTIVITY ASSIGNMENTS: P ro jects to perfect
your a b ility to record the operations of the
business . . . * • • .................................................... . . 30
D. EVALUATION: Some p ossible ways to check your
s k ill in en tering transaction s on the books • 32
4. THE TRIAL BALANCE: HOW TO PROVE YOUR WORK AND
TO CORRECT ERR O R S .............................................................................. 37
A. MOTIVATION: Rewards th at may come from hav­
ing neat and accurate records • • • • • • • • 37
B. DIRECTIONS: Some suggestions to guide you
in co rrectin g m istakes and taking a t r i a l
balance • • • • • • • • • • • • • • • • • • • 33
1. JOURNAL VERIFICATION: How to prove the
num erical accuracy of the journal . • . . 38
2. LEDGER VERIFICATION: How to prove the
accuracy of your posting . . • • • • • • • 39
3. CASH VERIFICATION: How to prove the cash . 39
4. DEBIT AND CREDIT CHECK: How to prove
the eq u ality of the d eb its and cre d its
in the ledger ..................... . . » • • • • • • 40
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CHAPTER PAGE
5. JOURNAL CORRECTIONS: How to ad ju st
erro rs found in the journal ...........................40
6. LEDGER CORRECTIONS: How to ad ju st errors
found in the l e d g e r ...............................................................41
7. TRIAL BALANCE: How to prepare a t r i a l
balance ........................................................................................41
8. TRIAL BALANCE DIFFERENCES: How to find
the erro rs when your t r i a l balance is out
of balance • • • • • • • • • • • • • • • • 42
9. TRIAL BALANCE ADJUSTMENTS: How to
co rrect erro rs found when balancing the
b o o k s ........................................................ 44
10. SOURCES FOR THIS CHAPTER: Where to get
fu rth e r a ssistan ce • • • • • • • • • • • . 45
C. ACTIVITY ASSIGNMENTS: Some learning ex p eri­
ences to enhance your s k ill In taking t r i a l
balances and find in g erro rs • ......................... 45
D. EVALUATION: Samples of ways in which you may
evaluate the neatness and accuracy of your
work ................................... 46
5. FINANCIAL STATEMENTS: HOW TO FIND THE NET PROFIT
OR LO SS........................................................................................................... 49
A. MOTIVATION: B enefits th at accrue from
finding the net re s u lts of operations • • • • • 49
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CHAPTER PAGE
B. DIRECTIONS: Steps to take to record the
changed fin an c ia l sta tu s of the business • • • 49
1. WORK SHEET: How to make a working
analy sis of the records • • * • ........................... 49
2. BALANCE SHEET: How to prepare a s ta te ­
ment of the fin a n c ia l condition from
the work sheet • • • • • • • ................................ 52
3. PROFIT AND LOSS STATEMENT : How to pre­
pare a statem ent of income and expense
from the work sheet • • • • • • • • • • • 55
4. SOURCES FOR THIS CHAPTER: Where to get
fu rth er a s s i s t a n c e ............................................... . . 57
C. ACTIVITY ASSIGNMENTS: Laboratory work in
preparing work sheets and fin a n c ia l s ta te ­
ments • • • • • • • • • • • • • • .............................. 59
D. EVALUATION: Some ways to check your a b ility
to find the p ro fit or loss and prepare
statem ents ................................................................ • • • . • 60
6, THE CLOSING PROCESS: HOW TO PREPARE THE BOOKS
TO RECEIVE THE ENTRIES OF THE NEXT PERIOD . . . . 64
A. MOTIVATION: Advantages that w ill accrue
from properly closing the records . . . • • • 64
B. DIRECTIONS: Steps to take in the closing
process .....................................• • • • • ......................... 64
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CHAPTER PAGE
1. PROPRIETORSHIP: How to close the income
and expense a c c o u n ts • 64
2• PROFIT AND LOSS SUMMARY: How to tra n s­
fe r the net p ro fit or loss to the
p ro p rieto rsh ip account • • • • • • • • • • 65
3* CLOSING ACCOUNTS: How to rule accounts
which have been c l o s e d .............................. 67
4 • BALANCING ACCOUNTS: How to balance and
ru le accounts which are to remain open • • 67
5. RULING RECEIVABLES: How to sim plify the
footing and ru lin g of customers * and
creditors* accounts • • • • • • • • • • • 69
6• POST-CLOSING TRIAL BALANCE: How to make
a proof of the closing p r o c e s s ......................... 69
7. SOURCES FOR THIS CHAPTER: Where to get
fu rth er a ssistan ce .......................................... « « • 70
C. ACTIVITY ASSIGNMENTS: P rojects in closing
the r e c o r d s ........................................ 70
D* EVALUATION: Some ways in which your s k ill in
perform ing the closing process may be
measured • » • • • • • • • • • • • • • • • • • 71