Free Accounting Tutor

Learn Accounting through Video Lessons

2016-08-27T00:24:00.000-07:00

Hello Friends

I have launched a video lesson channel on youtube. Join my channel to learn accounting concepts in concise way.

https://www.youtube.com/channel/UCIhrJpkIczw3TSc2krV60gw

https://www.youtube.com/channel/UCIhrJpkIczw3TSc2krV60gw

Learn the concepts of Basic Accounting (Video)

2016-05-23T10:57:00.001-07:00

Learn Basic Accounting Concepts

1. What is Chart of Accounts
2. Elements of Accounting
3. Rules of Debits & Credits
4. Double Entry Accounting System

Accounting roles in an organization

2015-07-24T12:24:00.000-07:00

Accounting is a field of opportunities. Accounting jobs can be categorized into four different categories

1. Bookkeeper
2.Accounting Clerk
3.Accountant
4.Certified professional Accountant/ Qualified Accountant

1. Bookkeeper

Bookkeeper handles day to day routine activities, just like recording of payments, collections, payroll processing, expenses claims and other journal entry recording.

2. Accounting Clerk

Role of accounting clerk is more narrow focused than the bookkeeper. A bookkeeper handles financial activities of different nature, but accounting clerk is hired for a particular area like accounts payable, accounts receivable, expenses claims etc

3. Accountant

Accountant is a key person in an organization who prepares financial statements and manage the team of accounting clerks and bookkeepers. He is expected to perform a lot of functions along with daily routine financial activities. He should have knowledge of other organizational functions such as marketing, production, operations and admin to interlink the reasonableness of numbers coming from commercial operations.

4. Certified Public Accountant/ Qualified Accountant

CPA sit for the exam based on International Accounting Standards. His role is bigger than the normal accountant in terms of responsibility and designation. He is required to view the things from global perspective besides having grip over the numbers. With increasing international level complexities in businesses, qualified accountant brings the knowledge of standards followed by the majority of accountants in world.

Accounting Software for Small Trading Businesses

2015-07-23T13:00:00.000-07:00

Business Manager www.manager.io

Business Manager is one of the best accounting softwares for small businesses and traders. Its an online web based system with facility to create unlimited businesses and users. Subscription cost per month is only USD 19 without any additional charges. The desktop version of the software is totally free.

How to Setup the Business in this software:

1. Create business entity

2. Fill all the particulars like address, phone number and email addresses

3. Upload logo (it will be showed on all invoices and reports)

4. Setup chart of accounts according to your business

5. Setup Bank accounts and other petty cash accounts

6. Start recording transactions

7 Extract reports from the reports Tab

Double Entry in T Accounts by Debits and Credit Rules

2013-05-02T10:40:00.001-07:00

basic rules of DEBITS and CREDITS

Accounting Course: Lesson 1 - Understanding Chart of Accounts

2013-05-02T09:51:00.001-07:00

A chart of accounts is the listing of all accounts, a company needs to use for recording of transactions. Chart of accounts is designed by keeping in view the needs of the company.

Accounts are usually listed in chart of accounts as below;

Balance Sheet

Assets
Liabilities
Equity/ Capital

Income Statement

Revenues
Expenses
Non Operating Revenues
Non Operating Expenses

Expenses are usually breakdown into further categories;

Production expenses

Selling Expenses

Marketing expenses

Human Resource Expenses

Sample Chart Of Accounts :

Current Assets: (Account numbers : 0001-0100)

0001 Raw Material 1

0002 Raw Material 2

0003 Raw Material 3

0004 Work in Progress 1

0005 Work In progress 2

0006 Cash

0007 Trade receivables

Sub Ledgers: 0007-001 ABC debtor

0007-002 CDE debtor & so on

Property Plant & Equipment : (Account numbers : 0101-0200)

0101 Vehicles

0102 Furniture

0103 Plant

0104 Land & so on

Current Liabilities :( Account numbers : 0201 -0300)

0201 Bank Loan

0202 Notes

0203 Suppliers

Sub ledger : 0203 -001 ABC Supplier

Long Term Liabilities : (Account numbers 0301-0400)

0301 Bank Loan

0302 Lease Liability

Equity : (Account numbers 0401-0500)

0401 Paid up Share Capital

0402 Retained Earnings

0403 Treasury Stock

Income statement accounts shall be explained in detail in Lesson 2. Keep visiting us for a 1 month Accounting course.

Why Pay for Learning Accounting? Tutor Accounts is ready for you!

2013-05-01T11:04:00.000-07:00

We have designed a course for accounting learners. It will be very helpful for basic and midway learners for their education and career. Why pay for Hefty Tuition Fees, when Tutor Accounts is ready to teach you!

Keep visiting us !

Learn Accounting by DEBITS & CREDITS - No mistake in double entry

2013-05-01T10:42:00.001-07:00

It is often said that if you have learnt the basic rules of DEBITS and CREDITS, accounting is no more difficult. I am writing this to make the most confusing topic easy for you.

Remember there are 5 elements of Financial Statements, these are;

Assets
Liabilities
Capital
Expenses
Income

Remember these rules and you will be the Winner!

Asset : Increase in Asset >>> Debit
            Decrease in Asset >>> Credit

If you have purchased a property by paying cash of $100,000, then it means You have in fact made an increase in your asset by corresponding decrease in asset i.e cash.

Entry would be:
Property Dr
Cash       Cr

Liabilities:   Opposite of Assets

Increase >>>>Cr
Decrease>>>>Dr

If you have taken a loan of $100,000 for paying to supplier. Means you have increased your bank liability for decreasing liability towards supplier

Entry would be:

Supplier Account >>>> Dr
Bank Loan>>>>>>>>> Cr

Capital:   Same as Liabilities

Expenses:   Same as Assets

Income:    Same as Liabilities/ Capital

Conclusion: Just remember two scenarios

1) Assets & Expenses >>>>>>>>>>Same Treatment
2) Liability, Capital and Income >>>Same Treatment

Be confident! you will never make an error in double entry. Best of Luck!

Basics of Accounting for All

2013-05-01T09:40:00.002-07:00

http://www.youtube.com/watch?v=dMhwnzWKsDQ

Financial Statement Analysis - Introduction

2013-04-08T11:10:00.001-07:00

The way of understanding the risks and profitability of the company/ firm through reported figures in financial statements is Financial Statements Analysis. Various types of analysis may be conducted but the most commonly uses is 'Financial Statements Ratio Analysis'. Two types of ratios are calculated that are Profitability ratios & Risk ratios.

Profitability Ratios:

Profitability ratios calculates the utilization of capital invested to generate profits.

1) ROE ' Return on Equity': Earnings
Average Equity
Equity means the total capital invested plus retained profits.

2) Gross Margin ratio

3) Net profit margin Ratio

Net Profit/ Sales

4) Gross Profit margin ratio

Gross profit/ Sales

Apart from the above mentioned there are various profitability ratios.

Credit Risk Ratios:

These ratios calculates underlying credit risk of the company. Liquidity analysis and solvency analysis. Liquidity analysis returns the efficiency of working capital cycle.

Working Capital:

Working capital represents the net current assets. Net current asset means the current assets less current liabilities.

Excel Tips n Tricks - Conditional Formatting

2013-04-01T10:58:00.002-07:00

Conditional Formatting in Excel 2007 is one of the most powerful data validation tool.

Understand Inventory Accounting

2013-04-01T10:56:00.002-07:00

There are three types of inventory/ stock in an organization.

Raw Material Inventory
Finished goods
Consumables

Raw material inventory is used to manufacture finished goods.
Finished goods inventory is held for sale.
Work In Process: Semi Finished goods.

lets take a scenario of Potato Chips Factory;

Raw Material : Potatoes, Vegetable Oil
Finished goods: Potato Chips
Work in process: Potato chips peeled and half fried

Accounting Entries:

Purchase of Raw material:

Raw Material Inventory   DR
Bank/ Cash                       CR

Work In Process:

Work In Process             DR
Raw material Inventory CR

Finished Goods

Finished Goods              DR
Work In Process            CR

2013-03-19T20:06:00.000-07:00

Rich Dad Poor Dad Author Robert's book has changed my perspective of education. I have made my strategy to come out of RAT RACE and have started working on it. To leave a Monthly fixed pay Check hurts initially, but it gives you the financial freedom.

Robert's new book "Why A students work for C Students" is the must read book for those who like to come out of this RAT RACE !

http://www.facebook.com/photo.php?fbid=10151564330426788&set=a.199144716787.170571.33416011787&type=1&theater

Microsoft Excel 2007 Tips and Tricks for accounting Professionals

2011-10-04T07:49:00.003-07:00

MS Excel 2007 application is widely being used in the organisations for data processing, financial modelling, data analysis and preparation of complex reports. Excel with its wide range of formula functions, embedded featured and adaptability makes the life of the accountant/ auditor rather simple.
Most commonly used features/ functions for accountants/ auditors.
Pivot Table
Pivot table gives you the option to prepare customized reports from the data range. The only task you have to do is to apply pivot table and rest would be done by the Excel.

To apply pivot table just arrange the data with the headers.
Insert pivot table from the 'Insert' tab on the toolbar of the sheet.

Select the desired range of the data.

Click 'OK' and you will see the window with all the fields in your data.

Just select the desired field in order, you want to prepare report and copy it in a separate sheet if you want to create another report from the applied pivot table.

VLOOKUP

V lookup formula in excel is used to compare two separate set of data and retrieve any value on the basis of same control number/ text in both of the sheets. The formula can help you in preparing report from the million of records within few seconds. To apply the wonder, just follow following tips

Sort the data in either way (ascending/ descending).

Make sure that there is any common field in both set of data

Apply V Lookup with the parameters given in guidance of the formula bar.

=VLOOKUP ( lookupvalue,table array,column index number, range lookup)

Lookup value means the value you want to look in the destination/ source data

Table array means range from which you want to retrieve value.

Column Index number means the number of column in which there is desired value. Count number from the column you select the range. If you are selecting range from column C then Column C will be '1' instead of '3'.

Microsoft Excel 2007 Tips and Tricks for accounting Professionals

2011-10-04T07:49:00.002-07:00

MS Excel 2007 application is widely being used in the organisations for data processing, financial modelling, data analysis,

Microsoft Excel 2007 Tips and Tricks for accounting Professionals

2011-10-04T07:49:00.001-07:00

MS Excel 2007 application is widely being used in the organisations for data processing, financial modelling, analysis

Microsoft Excel 2007 Tips and Tricks for accounting Professionals

2011-10-04T07:49:00.000-07:00

MS Excel 2007 application is widely being used in the organisations for data processing, financial modelling,

How to prepare Bank Reconciliation?

2011-10-03T09:46:00.000-07:00

Bank reconciliation is one of the major accounting technique to reconcile the ledger with the bank's records. You may find it very difficult but the following tips will make your life happier within minutes.

Understand that there are two books in bank reconciliation.

1) Cash Ledger ( Company's record)

2) Bank Statement ( issued by company's bank)

In bank reconciliation, we try to match the amount of bank statement with our ledger or vice versa. The purpose of this is to make sure that all transactions posted or occurred are in the knowledge of the authorized personnel.

Format:

Balance as per Bank Statement ----------------------------xxxxxx

Add:

Deposit in transit xxxxxx

Bank Charges xxxxxx

Less:

Cheques not cleared yet (xxxxx)

Balance as per company's books xxxxxx

2011-10-01T07:24:00.000-07:00

Financial statement analysis is the process of obtaining information and understanding of the entity through its reported financial statements.

Financial statement analysis consists of

Trend Analysis
Ratio Analysis

Ratio analysis means computing relevant accounting ratios which may include asset turnover ratio, liquidity ratios and profitability ratios.

Trend analysis means comparing reported financial statements figures of one period with the comparative periods to know the differences. e g drop in sales by 13% due to market slump, increase by 15% in expense due to high inflation rates

2011-09-27T09:47:00.000-07:00

Review of: FINANCIAL ACCOUNTING -An introduction of concepts, methods and uses

2011-09-27T09:39:00.000-07:00

The book covers all the basic topics of the financial accounting very comprehensively. Analysis and interpretation of the financial statements have been given due importance in the book. The topics have been explained in a very simple language so easy to grasp the concepts behind it. It is a must read book for MBA Graduates, accounting degree students and basic accounting learners.

Questions and Answers on Management accounting

2011-09-27T01:12:00.001-07:00

Question # 1

What is the difference between financial accounting and management accounting?

Financial accounting is the legal and regulatory requirement, whereas management accounting is based on the sole discretion of management.
Financial accounting is done in accordance with the generally accepted principles or international accounting standards. In contrast, management accounting does not need to be adhered to these principles.
Financial accounting is concerned with historical data whereas management accounting is related to future decision making.
Financial accounts are prepared monthly, quarterly, semi annually or annually. On the other hand, management reports may be prepared on daily basis depending on the needs of the company.

Question # 2

What is meant by cost object?

A cost object is any activity for which a separate measurement of costs is desired.(Collin drury). A cost object is generally a separated activity for which a cost is computed. Examples include cost of operating a particular unit and cost rendering services to a particular customer. You can grasp this concept by thinking cost object.

5 Questions and Answers on Management Accounting

2011-09-27T00:38:00.000-07:00

Question # 1

What is the difference between financial accounting and management accounting?

Financial accounting is the legal and regulatory requirement, whereas management accounting is based on the sole discretion of management.
Financial accounting is done in accordance with the generally accepted principles or international accounting standards. In contrast, management accounting does not need to be adhered to these principles.
Financial accounting is concerned with historical data whereas management accounting is related to future decision making.
Financial accounts are prepared monthly, quarterly, semi annually or annually. On the other hand, management reports may be prepared on daily basis depending on the needs of the company.

Question # 2

What is meant by cost object?

BEST PRACTICES TO CHOOSE THE BEST ACCOUNTING SOFTWARE

2011-09-26T11:52:00.000-07:00

Accounting software selection starts with the detail study of current business practices, followed by gap analysis, requirements definition, ranking of the requirements, preparation of detailed request for proposal, evaluation and short listing of the vendors on the defined criteria, performance of the cost and benefit analysis and finally selection of the best accounting software. Selection of the right accounting software for your organization is an important decision which should not be taken lightly. An accurate decision regarding the selection of the accounting software would help in the reduction of costs of your company with the ready access to accurate information. The decision should be taken .The following tips give the insight for taking a thoughtful decision.

Documentation of the current business requirements and mapping of the future requirements should be undertaken to highlight any weaknesses in the system. Since accounting software is a business initiative, you should first document your current business processes and analysis should include preparation of to-be state system requirements.Prepare a detailed analysis regarding volume of data, need for collaborating working, available resources and most importantly time frame for implementation and data migration from the legacy system.

Determine and evaluate the key performance indicators that will be used to measure the accounting system’s effectiveness and efficiency. Compare the proposals of the vendors with the set criteria and give them opportunity to demonstrate it.

The criteria may vary according to the requirements of your company but consider at minimum;

Experience and expertise of the vendor

Attend the training sessions being conducted by the vendor for its clients

Consider the reputation of the vendor in the market

Prepare a comprehensive evaluation sheet for evaluating the vendors which would allow you to compare and contrast one system with another effectively.

Client recommendations and references are vital for selecting right accounting package. Endorsement of the client along with the vendor’s reputation may help you in taking right decision. But do not over rely on personal recommendation rather pay a visit to the client of the vendor where the product has been implemented and in running condition.Engage the company's financial manager in the decisions.

Set a realistic budget according to the needs of your organization. Usually companies spend about seven to ten percent of their annual revenue on Enterprise Resource Planning (ERP) systems. One of the major factors for the failure of planned implementation of accounting software is not to consider the hidden costs of training, support and staffing. Compile project milestones along with the cost to be incurred on every milestone.

Hiring an independent consultant can assist you in preparing your company’s requirements and need analysis in more detail. Likewise selection of the accounting package, selection of a consultant should be done carefully. The consultant will help you in drafting the comprehensive evaluation performa about the product .

7. Adequate support and co-operation of executive management is required for the selection of good accounting software. A full time project manager should be assigned to oversee all the functions related to selection of the software. His responsibilities should include defining objectives, finding ways to achieve set objectives and ensuring that everyone in the organization knows their roles and responsibilities.

Good implementation is also necessary along with the good accounting software. When going for off the shelf package, also check for the well reputed implementation firms.

9. Once decided about the software, ensure that all the documents relating to licensing of the software are included in the contract package. A well drafted agreement will help you a lot in purchasing and implementing the right choice.

Get the contract reviewed from the legal counsel before signing. Do not forget to read any hidden clauses which may be used for exploitation. Evaluate the contract in terms of monitoring costs, payment schedule, defined responsibilities and deliverables of the vendor, going concern of the vendors’ business.

The Accounting Game

2011-09-26T11:38:00.000-07:00

The Accounting game is worth reading accounting book that comprehensively explains complex accounting in a fun and easy way.

This book uses the world of a kid's lemonade stand to teach the basics of financial terms You'll run your own lemonade stand and make it grow by creating signs to advertise it, borrowing money from Mom, buying lemons and sugar and selling to the whole neighborhood. As you run your stand, you'll begin to understand and apply financial terms and concepts like assets, liabilities, earnings, inventory and notes payable, plus:

Know the difference between accrual vs. cash accounting methods
Create and understand an income statement and balance sheet
Track inventory using LIFO and FIFO
Create cash statements and understand cash flow and liquidity
Apply your new knowledge to real-life situations

The innovatory approach of The Accounting Game takes the typically complex and boring subject of accounting and business finance a fun game. The concept of understand, learn and use has made this book a step ahead from other like books.

The following three basic financial statements have been explained in a very good way

the balance sheet
the income statement
the cash flow statement.

To sum up, it is worth studying book, which should not be missed in any case!