50 Days of Bookkeeping Terms
Bookkeeping Terms A to Z
by Beki Wallace AATQB MIAB
4y ago
Here is a simple to read, A to Z. There are words used only within accounting and other that have multiple meanings. Some words are interchangeable and some carry a clear singular meaning. Having a good understanding is key to ensuring a business can be successful. Not everyone is a fan of bookkeeping and accounting and some don’t feel confident to do their own business finances. If it takes up too much time and causes endless stress maybe it’s time to think abit outsourcing!! Wallace Accountancy & Bookkeeping help business owners have the time to concentrate on what’s important by providi ..read more
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Zero Rated Goods
Bookkeeping Terms A to Z
by Beki Wallace AATQB MIAB
4y ago
Taxable products with a rate of 0% VAT. This means is it included within the VAT Returns but no VAT is chargeable. Often used to reflect items of necessity. Below are some common examples of zero rated goods. Food items Sanitary products Children clothing Animal feed Prescription & medical equipment Water and more. Goods that are zero rated are likely less expensive to purchase. Zero rated goods are different to goods that are exempt. Getting it wrong can be a costly mistake. If unsure of how to manage and file VAT Returns, reach out. http://www.wallaceaccountancy.co.uk/contact ..read more
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Year End
Bookkeeping Terms A to Z
by Beki Wallace AATQB MIAB
4y ago
It is the end of an accounting period, usually 12 months. For a sole trader, year end is 5th April. For a limited company the year end date is dictated by the company incorporating date. At year end a number of processs take place to close off the books. Often referred to as Year End Adjustments. An essential task to ensure financial reports are accurate. Adjustments mght include the following examples: Depreciation charges Reclassifications Adjustments of errors Debts and prepayments Unsure what adjustments to make, reach out for help ..read more
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Xero
Bookkeeping Terms A to Z
by Beki Wallace AATQB MIAB
4y ago
One of the leading platforms in 2020, offering online accounting software. Simple and straight forward to use. A top favourite among business owners. Providing a range of packages to suit every need. Starting from as little as £10 per month. HMRC integrations, meaning quick and easy submissions for VAT, Tax, payroll and more. Designed to help save you time and reduce costly errors by utilising automation. When accounting get complex or when we need a bit of guidance we can easily invite in a bookkeeper or accountant to to help us out. All securely stored online which means it can be accessed b ..read more
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Withdrawals
Bookkeeping Terms A to Z
by Beki Wallace AATQB MIAB
4y ago
This is used to describe funds taken from the business bank account. Often referred to as drawings, although they are actually different things. Drawings are money taken by the owner for personal use. It reduces the owners equity or capital. Withdrawals are funds taken from the bank to use for business expenses. Funds withdrawn and then held in cash form is usually referred to as petty cash. Owners drawings are not business expenses. Drawings will show as a movement on the Statement of Financial Position. It will not affect the Profit and Loss Statement. Money withdrawn and held as petty cash ..read more
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Wave Accounting
Bookkeeping Terms A to Z
by Beki Wallace AATQB MIAB
4y ago
Have you heard of Wave? Accounting software designed for small businesses. Containing lots of functions and features to help make managing finances simpler and easier. There are two apps that work alongside the software to make things quicker by automating some of our everyday processes. The apps are clearly named as follows Wave Receipts Wave Invoicing After downloading to our phones, tablets etc they are simply named Receipts & Invoicing No more stressing about calculating and collating data. Wave Accounting software can do some of the hard work for us. Easily print off reports to stor ..read more
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VAT
Bookkeeping Terms A to Z
by Beki Wallace AATQB MIAB
4y ago
What is VAT? Short for value-added tax. Not to be confused with personal tax. Often thought of as sales tax, as it is added to almost everything that we buy. At the time of writing this, in the UK 2020, the VAT threshold is £85,000. This means that if turnover is above £85,000 over a 12 month period we must register for VAT with HMRC. We can opt to voluntarily register if we feel this might be beneficial to our business. Below are the common VAT rates: 20% is the standard VAT rate for most goods and services 5% is a reduced rate used for some goods and services, such as utilities bills for exa ..read more
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Turnover
Bookkeeping Terms A to Z
by Beki Wallace AATQB MIAB
4y ago
Often referring to the company revenue which is income from services or goods before deductions. Turnover is the total sales over a period of time. In cash accounting turnover is all sales that have been paid. In accrual accounting turnover is all sales that have been invoiced regardless over whether they have been paid. Found on the top line on the income statement. For VAT registered businesses, turnover is income less VAT. Turnover is revenue or gross income. It’s important to know that turnover should include full costs. Turnover should include commissions, fees or shipping costs for examp ..read more
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Statements
Bookkeeping Terms A to Z
by Beki Wallace AATQB MIAB
4y ago
Also referred to as a report. The data we gather is used to create statements and reports. Statement are provided to external agencies such as HMRC, companies and and lenders. They are made up of the same data but are laid out differently to achieve different results. The four main statements are as follows: Income statement (statement of profit and loss Balance Sheet (statement of financial position) Statement of owners equity Cash flow statements Statements provide an overview and an insight into our businesses. Often overlook but vital to any business ..read more
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Trial Balance
Bookkeeping Terms A to Z
by Beki Wallace AATQB MIAB
4y ago
What is a trial balance? It is a list of general accounts and balances. They are placed in the appropriate debit and credit columns. The total of debits should be equal to the total of credits. Using accounting software can automate this process ensuring all debits and credits are equal. A trial balance is drawn together and then used to create an adjusted trial balance. This is where adjusting entries are added, usually on the last day of an accounting period. Adjusting entries might include prepayments and outstanding debts if using an accrual accounting system. Depending on if we use softwa ..read more
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