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Corporate secretarial services
Accounting software - www.profit-cpa.com
Trial balance - Suspense account
Jane has a problem, because Mr. Manager cannot produce the receipt for the missing $20.
The auditors are coming, and she has to close the accounts. What should Jane do now?
Credit Cash $200
Debit Entertainment $100
Debit Petrol $80
Debt SUSPENSE ACCOUNT $20
Her Trial Balance will look like this:
To simplify matters, Mr. Auditor will ensure that this amount of $20 is accounted either as a loan to Mr. Manager or Mr. Manager has to return the $20 to the company.
Thus the final balance will look like this:
The auditors are coming, and she has to close the accounts. What should Jane do now?
Credit Cash $200
Debit Entertainment $100
Debit Petrol $80
Debt SUSPENSE ACCOUNT $20
Her Trial Balance will look like this:
| Debit | Credit | |
| Cash | 200 | |
| Entertainment | 100 | |
| Petrol | 80 | |
| Suspense account | 20 | |
| 200 | 200 |
To simplify matters, Mr. Auditor will ensure that this amount of $20 is accounted either as a loan to Mr. Manager or Mr. Manager has to return the $20 to the company.
Thus the final balance will look like this:
| Debit | Credit | |
| Cash | 180 | |
| Entertainment | 100 | |
| Petrol | 80 | |
| Total | 180 | 180 |
Trial Balance
Some people insist on spelling it as "Trail" balance...don't ask me why!
Why do accountants always ask for the TRIAL balance?
They want it to know that your debits and credits balances out! There is ying and yang, cause and effect and nothing as specific as debit and credit! Not a single cent less!
For every debit, there must be a credit! For example,
Debit Expenses $100
Credit Cash $100
That means cash is taken out and spent on an expense item!
The above entries will be entered into a ledger which we call General Ledger. The auditors/accountants will check the total balance of EACH item in the general ledger and ensure it matches with those in the trial balance.
I wouldn't go into suspense account...etc, but as a prelude, imagine this:
1. Manager says "Jane, give me $200, I need it to make some purchases and buy a drink for a customer".
2. Jane says, "Ok, but remember to bring back the receipts"
3. Manager comes back and hands a stack of receipts to Jane, and says "There's your $200"
4. Jane records the following:
Credit Cash $200
Debit Entertainment $100
Debit Petrol $80
Debt ????? $20!!!!
Oh no! Jane is short of $20! Her trial balance WILL NOT BALANCE!
Why do accountants always ask for the TRIAL balance?
They want it to know that your debits and credits balances out! There is ying and yang, cause and effect and nothing as specific as debit and credit! Not a single cent less!
For every debit, there must be a credit! For example,
Debit Expenses $100
Credit Cash $100
That means cash is taken out and spent on an expense item!
The above entries will be entered into a ledger which we call General Ledger. The auditors/accountants will check the total balance of EACH item in the general ledger and ensure it matches with those in the trial balance.
I wouldn't go into suspense account...etc, but as a prelude, imagine this:
1. Manager says "Jane, give me $200, I need it to make some purchases and buy a drink for a customer".
2. Jane says, "Ok, but remember to bring back the receipts"
3. Manager comes back and hands a stack of receipts to Jane, and says "There's your $200"
4. Jane records the following:
Credit Cash $200
Debit Entertainment $100
Debit Petrol $80
Debt ????? $20!!!!
Oh no! Jane is short of $20! Her trial balance WILL NOT BALANCE!
Terminating your company
Decided to throw in the towel?
There are several ways to close your company:
1. Striking off (more info here)
2. Members' Voluntary Winding up
3. Creditors' Voluntary Winding up
4. Compulsory Winding up
5. Receivership
6. Judicial Management
Click here
There are several ways to close your company:
1. Striking off (more info here)
2. Members' Voluntary Winding up
3. Creditors' Voluntary Winding up
4. Compulsory Winding up
5. Receivership
6. Judicial Management
Click here
The difference between accounting and bookkeeping
Are you performing an accounting or bookkeeping function?
Bookkeepers
They are required to maintain precise and accurate records, they produce the critical reports that keep the shareholders and directors up to date on the financial position of their company.
They usually maintain the general ledger, cash books, ledgers & other accounting information.
Accountants
Accountants are responsible for the design and management of the financial systems for the company. They prepare monthly financial statements, cash flows, budgets and tax returns at year end.
Some accountants perform bookkeeping functions too.
There are different "categories" of accountants.
Some may have graduated from their Universities or ACCA with accounting qualifications but NOT PURSUE professional qualifications.
An accountant by academic qualifications may not be a CPA. A CPA has to go through rigourous training and pass extra examinations before being recognised by his/her local accounting body.
There are diploma holders who hold positions usually reserved for accountants as they are deemed to be able to perform the role of accountants. However, there are limits because certain industry/listing requirement requires a CFO to be a qualified accountant (CPA).
Just like a lawyer may not be called to the bar, but he could work as a legal advisor or consultant in other fields. See here
Bookkeepers
They are required to maintain precise and accurate records, they produce the critical reports that keep the shareholders and directors up to date on the financial position of their company.
They usually maintain the general ledger, cash books, ledgers & other accounting information.
Accountants
Accountants are responsible for the design and management of the financial systems for the company. They prepare monthly financial statements, cash flows, budgets and tax returns at year end.
Some accountants perform bookkeeping functions too.
There are different "categories" of accountants.
Some may have graduated from their Universities or ACCA with accounting qualifications but NOT PURSUE professional qualifications.
An accountant by academic qualifications may not be a CPA. A CPA has to go through rigourous training and pass extra examinations before being recognised by his/her local accounting body.
There are diploma holders who hold positions usually reserved for accountants as they are deemed to be able to perform the role of accountants. However, there are limits because certain industry/listing requirement requires a CFO to be a qualified accountant (CPA).
Just like a lawyer may not be called to the bar, but he could work as a legal advisor or consultant in other fields. See here
Keeping your accounting records
You have been given some guidelines on your record keeping.
Click here for IRAS guidelines
Go to http://www.accountingbpo.com for help if you need to do DIY accounting.
Click here for IRAS guidelines
Go to http://www.accountingbpo.com for help if you need to do DIY accounting.
Commodity prices raised by low stockpiles, says Jim Rogers
From the Singapore Straitstimes -
HEDGE funds have been blamed for sending commodity prices skywards but international investor Jim Rogers believes the cause is far simpler - record-low inventories.
Singapore-based Mr Rogers dismissed the argument that prices have been at the mercy of hedge funds making bets on futures markets.
'Prices are going up because inventories are at the lowest they've been in decades. People invest in things that are successful and where fundamental supply and demand is positive,' he said.
'Rice is going up not because hedge funds are pumping money into them; rice is going up because there is no rice.
'Whenever you have a bull market, people will put their money there. That's where the attractive investments are.'
********************************************************************
Despite the world inflation, how is YOUR BUSINES?
It is INCOME that you have to worry about. Strong companies go through boom and bust cycles. One thing is constant, they strive to get MORE business and stay competitive.
Keep track of your business valuation with Profit Wealth today!
HEDGE funds have been blamed for sending commodity prices skywards but international investor Jim Rogers believes the cause is far simpler - record-low inventories.
Singapore-based Mr Rogers dismissed the argument that prices have been at the mercy of hedge funds making bets on futures markets.
'Prices are going up because inventories are at the lowest they've been in decades. People invest in things that are successful and where fundamental supply and demand is positive,' he said.
'Rice is going up not because hedge funds are pumping money into them; rice is going up because there is no rice.
'Whenever you have a bull market, people will put their money there. That's where the attractive investments are.'
********************************************************************
Despite the world inflation, how is YOUR BUSINES?
It is INCOME that you have to worry about. Strong companies go through boom and bust cycles. One thing is constant, they strive to get MORE business and stay competitive.
Keep track of your business valuation with Profit Wealth today!
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