Bookkeeping & Accounting All-in-One For Dummies, UK Edition 2nd Edition

Title Page
Copyright Page
Table of Contents
Introduction
	About This Book
	Foolish Assumptions
	Icons Used in This Book
	Beyond the Book
	Where to Go from Here
Book 1 Basic Bookkeeping
	Chapter 1 So You Want to Do the Books
		Delving into Bookkeeping Basics
			Looking at basic accounting methods
			Understanding assets, liabilities, and capital
			Introducing debits and credits
			Charting your bookkeeping course
			Discovering different business types
			Planning and controlling your activities
			Instituting internal controls
			Keeping an accurate paper trail
		Defining and Maintaining a Ledger
		Using Bookkeeping Tools to Manage Daily Finances
			Tracking sales
			Keeping stock
		Running Tests for Accuracy
			Checking the cash and bank
			Testing your balance
			Understanding your VAT
			Doing bookkeeping corrections
			Preparing financial reports
			Handling payroll
			Working with your accountant
	Chapter 2 Getting Down to Bookkeeping Basics
		Bookkeeping: The Record-Keeping of the Business World
		Wading through Basic Bookkeeping Lingo
			Accounts for the Balance Sheet
			Accounts for the Profit and Loss account
			Other common terms
		Pedalling through the Accounting Cycle
		Understanding Accounting Methods
			Keeping things simple with cash-basis accounting
			Recording right away with accrual accounting
		Seeing Double with Double-Entry Bookkeeping
			Golden rules of bookkeeping
			Practising with an example
		Have a Go
		Answering the Have a Go Questions
	Chapter 3 Outlining Your Financial Roadmap with a Chart of Accounts
		Getting to Know the Chart of Accounts
		Starting with the Balance Sheet Accounts
			Tackling assets
				Fixed assets (also known as Non-Current Assets)
				Current assets
			Laying out your liabilities
				Current liabilities
				Long-term liabilities
			Controlling the capital
		Keeping an Eye on the Profit and Loss Accounts
			Recording the profit you make
			Recording the cost of sales
			Acknowledging the other costs
		Setting Up Your Chart of Accounts
		Have a Go
		Answering the Have a Go Questions
	Chapter 4 Looking at Ledgers
		Developing Entries for the Ledger
		Posting Sales Invoices
		Posting Purchase Invoices
		There’s an App for That!
		Entering Items into the Nominal Ledger
		Cashbook/Bank Transactions
			Bank payments
			Supplier payments
			Bank receipts
			Customer receipts
		Introducing Control Accounts
			Debtors Control account
			Creditors Control account
		Understanding How the Ledgers Impact the Accounts
		Adjusting for Nominal Ledger Errors
		Have a Go
		Answering the Have a Go Questions
Book 2 Bookkeeping Day to Day
	Chapter 1 Planning and Controlling Your Workload
		Introducing Checklists
		Sorting Out Your Sales Invoices
		Entering Your Purchases Invoices
			Sequential numbering and coding — the old-fashioned way
			Scanning your invoices in the modern age!
			Paying your suppliers
		Checking Cash Payments and Receipts
			Cash payments
			Cash receipts
		Using a Bank Feed to Reconcile Your Bank Account
		Entering Your Journals
		Controlling Your Books, Records, and Money
			Dividing staff responsibilities
			Balancing control costs
		Have a Go
		Answering the Have a Go Questions
	Chapter 2 Counting Your Sales
		Reviewing Your Sales
			Collecting on cash sales
			Monitoring retail sales
			Checking your online sales
			Keeping your eye on credit sales
			Dealing with other sales
		Recording Your Sales in the Books
			Recording and automating cash sales
			Recording retail sales
			Updating online sales
			Recording credit sales in the books
		Adjusting Your Sales
			Monitoring sales discounts
			Recording sales returns and allowances
		Monitoring Trade Debtors
		Accepting Your Losses
		Have a Go
		Answering the Have a Go Questions
	Chapter 3 Buying and Tracking Your Purchases
		Identifying Different Types of Purchases
			Making Capital Purchases
			Buying stock
			Overhead and operating expenses
		Keeping Track of Stock
			Entering initial cost
			Managing stock and its value
				Figuring out the best method for you
				Comparing the methods
		Buying and Monitoring Supplies
		Staying on Top of Your Bills
		Have a Go
		Answering the Have a Go Questions
	Chapter 4 Doing Your Banking
		Making Sure that the Closing Cash Is Right
			Producing a snapshot in time
			Checking all your cash balances
		Reconciling Bank Accounts
			Reconciling your bank account without using a bank feed
			Automating your bank reconciliation using bank feeds
			Considering credit card sales
			Tracking down errors
		Have a Go
		Answering the Have a Go Questions
Book 3 Undertaking Monthly and Quarterly Tasks
	Chapter 1 Adding the Cost of Value-Added Tax (VAT)
		Looking into VAT
			Knowing what to charge
			Knowing how much to charge
			When you can’t charge VAT
			Understanding what to claim on purchases
		Registering for VAT
		VAT Returns in the Digital Age
			Digital records that you must keep
			Other records that you must keep
			Submitting VAT online
			Paying VAT online
			Getting help for small businesses
			Glancing at problem areas
				Using fuel for private motoring
				Leasing a motor car
			Filing under special circumstances
			Correcting mistakes
	Chapter 2 Employee Payroll and Benefits
		Staffing Your Business
		Running Your Payroll
			Obtaining an employer’s PAYE reference
			Starting a new employee
			Recording pay
				Picking pay periods
				Calculating weekly pay
				Calculating monthly pay
			Totalling up for commission payments
				Calculating commission with and without a base salary
				Levelling up with graduated commission
				Serving up a salary with tips
				Paying staff fairly
				Making statutory payments
			Calculating deductions
			Accounting for NICs
			Figuring out PAYE tax
			Preparing payslips
			Reporting to HMRC
				Making a Full Payment Submission (FPS)
				Sending an Employer Payment Summary (EPS)
				Verifying National Insurance numbers
				Correcting reporting mistakes
		Taxing Benefits
		Posting Your Payroll Entries
		Settling Up with HM Revenue & Customs
		Handling Payroll Year-End
		Have a Go
		Answering the Have a Go Questions
	Chapter 3 Adjusting Your Books
		Adjusting All the Right Areas
			Depreciating assets
			Accruing the costs
			Allocating prepaid expenses
			Counting stock
			Allowing for bad debts
		Checking Your Trial Balance
		Changing Your Chart of Accounts
		Have a Go
		Answering the Have a Go Questions
Book 4 Working to Prepare Financial Statements
	Chapter 1 Producing a Profit and Loss Account
		Lining Up the Profit and Loss account
		Formatting the Profit and Loss Account
		Preparing the Profit and Loss Account
			Finding Net Sales
			Finding Cost of Goods Sold
			Drawing remaining amounts from your Trial Balance
		Deciphering Gross Profit
		Monitoring Expenses
		Using the Profit and Loss Account to Make Business Decisions
		Testing Profits
			Return on Sales
			Return on Assets
			Return on Shareholders’ Capital
		Branching Out with Profit and Loss Account Data
		Have a Go
		Answering the Have a Go Questions
	Chapter 2 Developing a Balance Sheet
		Breaking Down the Balance Sheet
		Gathering Balance Sheet Ingredients
			Dividing and listing your assets
				Current assets
				Fixed assets
			Acknowledging your debts
			Naming your investments
		Presenting Your Balance Sheet
			Horizontal format
			Vertical format
		Putting Your Balance Sheet to Work
			Testing your cash
				Current ratio
				Acid test (quick) ratio
			Assessing your debt
		Have a Go
		Answering the Have a Go Questions
	Chapter 3 Cash Flows and the Cash Flow Statement
		The Three Types of Cash Flow
		Setting the Scene: Changes in Balance Sheet Accounts
		Using the Indirect or Direct Method?
		Looking at Cash Flow from Operating Activities
			Computing cash flow from profit (also known as cash flow from operating activities)
			Considering changes in working capital
				Debtors increase
				Stock increase
				Prepaid expenses increase
				Adjusting for non-cash expenses
				Operating liabilities increases
		Presenting the Cash Flow Statement
		Sailing through the Rest of the Cash Flow Statement
			Investing activities
			Financing activities
			Direct method — another alternative for reporting cash flow
		Free Cash Flow: What on Earth Does That Mean?
		Scrutinising the Cash Flow Statement
Book 5 Accountants: Managing the Business
	Chapter 1 Discovering Different Business Types
		Finding the Right Business Type
			Sole trader
			Partnership
			Limited Liability Partnerships (LLPs)
			Limited companies
		Tax Reporting for Sole Traders
		Making Tax Digital — Income Tax Self-Assessment
			Expanding to the supplementary pages
			Filling out the self-employment supplementary pages
		Filing Tax Forms for Partnerships
		Filing Returns for Limited Companies
		Introducing Software-Only Filing
		Have a Go
		Answering the Have a Go Questions
	Chapter 2 Choosing Accounting Methods
		Decision-Making behind the Scenes in Profit and Loss Accounts
		Calculating Cost of Goods Sold and Cost of Stock
			The FIFO method
			The average cost method
		Identifying Stock Losses: Net Realisable Value (NRV)
		Managing Your Stock Position
		Appreciating Depreciation Methods
			Straight-Line depreciation
			Reducing-Balance depreciation
			Comparing the methods
		Collecting or Writing Off Bad Debts
		Reconciling Corporation Tax
		Dealing with Foreign Exchange
			Transaction exposure
			Translation exposure
			Comparing performance
		Two Final Issues to Consider
		Have a Go
		Answering the Have a Go Questions
	Chapter 3 Managing Profit Performance
		Redesigning the External Profit and Loss Account
		Basic Model for Management Profit and Loss Account
			Variable versus fixed operating expenses
			From operating profit (EBIT) to the bottom line
		Travelling Two Trails to Profit
			First path to profit: Contribution margin minus fixed expenses
			Second path to profit: Excess over break-even volume × contribution margin per unit
			Calculating the margin of safety
			Doing what-if analysis
				Lower profit from lower sales — but that much lower?
				Violent profit swings due to operating leverage
				Cutting sales price, even a little, can gut profit
				Improving profit
				Cutting prices to increase sales volume: A very tricky game to play!
				Cash flow from improving profit margin versus improving sales volume
				A Final Word or Two
		Have a Go
		Answering the Have a Go Questions
	Chapter 4 Cost Conundrums
		Previewing What’s Coming Down the Road
		What Makes Cost So Important?
		Sharpening Your Sensitivity to Costs
			Direct versus indirect costs
			Fixed versus variable costs
			Breaking even
			Relevant versus irrelevant (sunk) costs
			Separating between actual, budgeted, and standard costs
			Product versus period costs
		Putting Together the Pieces of Product Cost for Manufacturers
			Minding manufacturing costs
			Allocating costs properly: Not easy!
		Allocating Indirect Costs Is as Simple as ABC — Not!
			Calculating product cost
			Fixed manufacturing costs and production capacity
			Excessive production output for beefing up profit
		Have a Go
		Answering the Have a Go Questions
	Chapter 5 Business Budgeting
		The Reasons for Budgeting
			The modelling reasons for budgeting
			Planning reasons for budgeting
			Management control reasons for budgeting
			Other benefits of budgeting
		Budgeting and Management Accounting
		Budgeting in Action
			Developing your profit strategy and budgeted Profit and Loss account
			Budgeting cash flow from profit for the coming year
		Capital Budgeting
			Calculating payback
			Discounting cash flow
			Calculating the internal rate of return
			Arriving at the cost of capital
		Reporting on Variances
		Staying Flexible with Budgets
		Have a Go
		Answering the Have a Go Questions
Book 6 Accountants: Working with the Outside World
	Chapter 1 Getting a Financial Report Ready for Prime Time
		Considering the Purpose of Annual Reporting
			Identifying the stakeholders
			Complying with legal and regularity requirements
			Building transparency and trust
		Looking at the Contents of an Annual Report
			Preparing the Strategic Report
			Writing the Governance Report
			Gathering together the Financial Statements
				Statement of Changes in Equity
				The purpose of a Statement of Changes in Equity
		Making Sure that Disclosure Is Adequate
			Footnotes versus notes versus disclosures
			What you’ll find in the notes to the accounts
			Why the notes are important
			Keeping it private versus going public
		Nudging the Numbers
			Adjusting the cash balance by “window dressing”
			Smoothing the rough edges off profit
			Sticking to the accounting conventions
				Conservatism
				Materiality
				Consistency
		Browsing versus Reading Financial Reports
	Chapter 2 How Investors Read a Financial Report
		Financial Reporting by Private versus Public Businesses
			Private company reporting requirements
			Public company reporting requirements
		Analysing Financial Reports
			Gross profit margin
			Net profit margin
			Earnings per share, basic and diluted
			Price/earnings (P/E) ratio
			Dividend yield
			Book value per share
			Return on equity (ROE)
			Gearing or leverage
			Current ratio
			Acid test ratio
			Keeping track of stock and debtors
			Debtor days
			Return on assets (ROA)
			Using combined ratios
			Appreciating the limits of ratios
		Navigating the Notes
		Checking for Warning Signs in the Audit Report
		Finding Financial Facts
			Public company accounts
			Private company accounts
			Using FAME (Financial Analysis Made Easy)
		Have a Go
		Answering the Have a Go Questions
	Chapter 3 Professional Auditors and Advisers
		Why Audit?
		Who Can Audit Company Accounts?
		What Happens during an Audit?
		What’s in an Auditor’s Report
			True and fair: An unqualified (“clean”) opinion
			Other kinds of audit opinions
				How can the reader be sure of the modified opinion?
		Do Audits Always Catch Fraud?
			Looking for errors and fraud
			What happens when auditors spot fraud
		Auditors and the Rules
		From Audits to Advising
Index
EULA