Bookkeeping Level 1

Duration: 100 hours

Method of Learning: Online, CD-ROM or correspondence (paper based)

Start: Anytime! And from anywhere in the world!

Qualification: Certificate awarded by the ICB

Bookkeeping is crucial in everyday business. It has the flexibility of allowing qualified candidates to either work for a company or to set up their own bookkeeping business. This course will prepare you for the Institute of Certified Bookkeepers (ICB) examination at Level I.

Please note: Enrolment onto this course includes the registration for one year of membership with the ICB (worth £45). The fee you pay does not include examination fees, which will cost an additional £30 for Level I. You will have to pay this fee directly to the ICB when you wish to sit for an exam.

Lesson Structure

Unit 1 covers the basics of the double entry system in T-Account Format. It explains the concept behind the system, whilst working through various examples. It also covers simple uses of The Journal.

• Double entry bookkeeping
• Revenue and capital items
• The Journal
• Balancing ledger accounts
• Trial balance

Unit 2 teaches how to enter credit transactions into the accounts.

• Enter credit transactions into the ledgers
• Parts of the ledger
• Two-column cash book
• Analysed cash book

Unit 3 focuses on Value Added Tax (or VAT for short). It covers the requirements for registering for VAT, how to calculate the amount of VAT due and how to input this data into the books of account. It also explains how a system of business documents can be affected when various types of discount are offered.

• Value Added Tax (VAT)
• Calculate VAT
• Record VAT in the accounts
• VAT inclusive figures
• Trade and cash discount and its effect on VAT
• Write off a bad debt, understanding the effect of VAT

Unit 4 outlines how to deal with day books.

• Day books
• Payroll transactions
• Errors of omission, commission, principal, original entry, reversal and compensation

Each lesson is followed by an assignment which is submitted to SCI, marked by your personal tutor and returned to you with any relevant suggestions, comments, and if necessary, extra reading.

Aims

• Explain types of balance sheets, assets, liabilities.
• Design an accounting process.
• Utilize ledgers, transaction records, trial balances.
• Define what a business’s liquidity is and the two calculations used to measure it.
• Prepare a credit fees journal
• Prepare a credit purchase journal
• Post a fees journal to the general ledger
• Post a purchases journal to the general ledger
• Describe the VAT

What You Will Do

• What is an accounting standard?
• What is an accounting convention?
• Explain the link between the concept of reliability and the principal of verifiability.
• Explain the link between the going concern assumption and accounting period convention.
• Explain the accounting entity convention.
• State the balance sheet equation in two different forms.
• Define the terms, assets, liabilities and proprietorship
• What is the difference between a T-form balance sheet and a narrative form balance sheet?
• Define the difference between a Ledger & Journal?
• Define source documents?
• Explain what a chart of accounts is and why is it used?
• What journals are used in an accounting system.
• Prepare a list of transactions in ledger accounts on double entry principles.
• Explain the purpose of the general journal for a business which uses special journals.
• Describe the benefits achieved by a business through the introduction of multi-column journals.
• What is the purpose of the sundries column in a cash receipts journal?
• What is the difference between credit fees and credit purchases?
• Describe the key sections of a general journal
• State four transactions that would be recorded in a general journal.
• What is a bad debt? What is the role of the general journal in relation to bad debts?
• What is the purpose of the profit and loss account
• What is a current account?
• Outline the basic functions of a Profit and Loss Statement.
• How is gross margin calculated for a service firm?
• What is meant by functional classification and what are the benefits?
• What is depreciation?
• Outline the differences between the cash and accrual methods of determining profit.
• Explain the role played by a ten column worksheet.
• State and describe five different ways of controlling cash receipts.
• What is a bank reconciliation?
• Describe five events which may cause a balance on a bank statement to be different from that shown in a firm’s books.
• What details should be recorded in a petty cash book?
• State and describe four different types of budgets the management of a service firm may prepare.
• What is a cash budget and what is its purpose?
• What is a budget performance report and what is its purpose?

What Does a Bookkeeper Do?

Every job is different, but typically, a bookkeeper may be involved with any of the following tasks:

• Recording cash payments and expenses.
• Recording credit sales and purchases.
• Daily or Weekly Banking
• Calculating recording the payroll
• Accounts Payable (Including paying suppliers and responsibility for petty cash)
• Accounts Receivable (Including invoicing clients and chasing up overdue amounts)
• Bank Reconciliations
• All accounts to trial balance
• Balance day adjustments such as calculating and entering depreciation.
• Preparing some Tax Statements such as the BAS & payroll tax
• General journal entries
• Liasing with customers, suppliers, managers, sales and marketing and all other departments in the organisation
• Chasing up paperwork and authorisations from managers
• Can sometimes include monthly financial reporting under the supervision of an accountant.
• Using accounting software for entering data and producing many different reports.
• Checking for errors and balancing the books.

OPPORTUNITIES

There are a whole host of career opportunities for Bookkeepers, as every business needs at least one. As accounting and taxation laws become more stringent, the demand for bookkeepers is on the rise.

Bookkeepers can find employment for a business (part-time or full-time), or they can even start up their own! Bookkeepers may also choose to continue with their studies and become qualified accountants.

REMUNERATION

Self employed bookkeepers can earn good money.

Bookkeepers employed in medium or larger organisations may have more job security (than self employed bookkeepers), however they are likely to earn a lower rate of pay. But this is determined by various factors, i.e. how long you have been with them and how pleased they are with you.

The great thing about being a bookkeeper is that there tends to be many jobs available, so you are unlikely to stay out of work for long.

If you open up your own bookkeeping business, there is a potential to earn average to high salaries.

Bookkeepers who take their studies further, would increase their range of services and ultimately earn more money. With additional training, job opportunities could include becoming a financial advisor, financial planner, finance company agent through to chartered accountant.