Introduction 1
About This Book 1
Foolish Assumptions 1
Icons Used in This Book 2
Beyond the Book 3
Where to Go from Here 3
BOOK 1: BASIC BOOKKEEPING 5
Chapter 1: So You Want to Do the Books 7
Delving into Bookkeeping Basics 8
Defining and Maintaining a Ledger 12
Using Bookkeeping Tools to Manage Daily Finances 13
Running Tests for Accuracy 14
Chapter 2: Getting Down to Bookkeeping Basics 19
Bookkeeping: The Record-Keeping of the Business World 19
Wading through Basic Bookkeeping Lingo 21
Pedalling through the Accounting Cycle 24
Understanding Accounting Methods 26
Seeing Double with Double-Entry Bookkeeping 28
Have a Go 32
Answering the Have a Go Questions 34
Chapter 3: Outlining Your Financial Roadmap with a Chart of Accounts 37
Getting to Know the Chart of Accounts 38
Starting with the Balance Sheet Accounts 39
Keeping an Eye on the Profit and Loss Accounts 46
Setting Up Your Chart of Accounts 50
Have a Go 51
Answering the Have a Go Questions 52
Chapter 4: Looking at Ledgers 55
Developing Entries for the Ledger 56
Posting Sales Invoices 57
Posting Purchase Invoices 59
There's an App for That! 61
Entering Items into the Nominal Ledger 62
Cashbook/Bank Transactions 63
Introducing Control Accounts 68
Understanding How the Ledgers Impact the Accounts 71
Adjusting for Nominal Ledger Errors 73
Have a Go 75
Answering the Have a Go Questions 77
Book 2: Bookkeeping Day to Day 81
Chapter 1: Planning and Controlling Your Workload 83
Introducing Checklists 84
Sorting Out Your Sales Invoices 84
Entering Your Purchases Invoices 86
Checking Cash Payments and Receipts 88
Using a Bank Feed to Reconcile Your Bank Account 90
Entering Your Journals 91
Controlling Your Books, Records, and Money 91
Have a Go 94
Answering the Have a Go Questions 95
Chapter 2: Counting Your Sales 97
Reviewing Your Sales 97
Recording Your Sales in the Books 101
Adjusting Your Sales 108
Monitoring Trade Debtors 113
Accepting Your Losses 114
Have a Go 115
Answering the Have a Go Questions 119
Chapter 3: Buying and Tracking Your Purchases 121
Identifying Different Types of Purchases 122
Keeping Track of Stock 123
Buying and Monitoring Supplies 132
Staying on Top of Your Bills 132
Have a Go 134
Answering the Have a Go Questions 135
Chapter 4: Doing Your Banking 137
Making Sure that the Closing Cash Is Right 138
Reconciling Bank Accounts 139
Have a Go 146
Answering the Have a Go Questions 147
Book 3: Undertaking Monthly and Quarterly Tasks 151
Chapter 1: Adding the Cost of Value-Added Tax (VAT) 153
Looking into VAT 153
Registering for VAT 158
VAT Returns in the Digital Age 158
Chapter 2: Employee Payroll and Benefits 167
Staffing Your Business 168
Running Your Payroll 169
Taxing Benefits 181
Posting Your Payroll Entries 182
Settling Up with HM Revenue & Customs 183
Handling Payroll Year-End 184
Have a Go 185
Answering the Have a Go Questions 186
Chapter 3: Adjusting Your Books 189
Adjusting All the Right Areas 190
Checking Your Trial Balance 199
Changing Your Chart of Accounts 200
Have a Go 202
Answering the Have a Go Questions 203
Book 4: Working to Prepare Financial Statements 207
Chapter 1: Producing a Profit and Loss Account 209
Lining Up the Profit and Loss account 209
Formatting the Profit and Loss Account 210
Preparing the Profit and Loss Account 211
Deciphering Gross Profit 214
Monitoring Expenses 215
Using the Profit and Loss Account to Make Business Decisions 216
Testing Profits 218
Branching Out with Profit and Loss Account Data 220
Have a Go 222
Answering the Have a Go Questions 223
Chapter 2: Developing a Balance Sheet 227
Breaking Down the Balance Sheet 227
Gathering Balance Sheet Ingredients 229
Presenting Your Balance Sheet 234
Putting Your Balance Sheet to Work 237
Have a Go 239
Answering the Have a Go Questions 241
Chapter 3: Cash Flows and the Cash Flow Statement 247
The Three Types of Cash Flow 248
Setting the Scene: Changes in Balance Sheet Accounts 250
Using the Indirect or Direct Method? 251
Looking at Cash Flow from Operating Activities 251
Presenting the Cash Flow Statement 258
Sailing through the Rest of the Cash Flow Statement 261
Free Cash Flow: What on Earth Does That Mean? 265
Scrutinising the Cash Flow Statement 265
Book 5: Accountants: Managing the Business 267
Chapter 1: Discovering Different Business Types 269
Finding the Right Business Type 270
Tax Reporting for Sole Traders 273
Making Tax Digital - Income Tax Self-Assessment 274
Filing Tax Forms for Partnerships 276
Filing Returns for Limited Companies 277
Introducing Software-Only Filing 278
Have a Go 279
Answering the Have a Go Questions 279
Chapter 2: Choosing Accounting Methods 281
Decision-Making behind the Scenes in Profit and Loss Accounts 282
Calculating Cost of Goods Sold and Cost of Stock 286
Identifying Stock Losses: Net Realisable Value (NRV) 290
Managing Your Stock Position 291
Appreciating Depreciation Methods 291
Collecting or Writing Off Bad Debts 295
Reconciling Corporation Tax 295
Dealing with Foreign Exchange 296
Two Final Issues to Consider 297
Have a Go 298
Answering the Have a Go Questions 299
Chapter 3: Managing Profit Performance 303
Redesigning the External Profit and Loss Account 304
Basic Model for Management Profit and Loss Account 306
Travelling Two Trails to Profit 310
Have a Go 323
Answering the Have a Go Questions 324
Chapter 4: Cost Conundrums 327
Previewing What's Coming Down the Road 327
What Makes Cost So Important? 328
Sharpening Your Sensitivity to Costs 329
Putting Together the Pieces of Product Cost for Manufacturers 334
Allocating Indirect Costs Is as Simple as ABC - Not! 337
Have a Go 344
Answering the Have a Go Questions 346
Chapter 5: Business Budgeting 351
The Reasons for Budgeting 352
Budgeting and Management Accounting 356
Budgeting in Action 358
Capital Budgeting 364
Reporting on Variances 369
Staying Flexible with Budgets 370
Have a Go 371
Answering the Have a Go Questions 372
Book 6: Accountants: Working with The Outside World 375
Chapter 1: Getting a Financial Report Ready for Prime Time 377
Considering the Purpose of Annual Reporting 378
Looking at the Contents of an Annual Report 380
Making Sure that Disclosure Is Adequate 385
Nudging the Numbers 390
Sticking to the accounting
Browsing versus Reading Financial Reports 393
Chapter 2: How Investors Read a Financial Report 395
Financial Reporting by Private versus Public Businesses 396
Analysing Financial Reports 400
Navigating the Notes 415
Checking for Warning Signs in the Audit Report 416
Finding Financial Facts 417
Have a Go 419
Answering the Have a Go Questions 421
Chapter 3: Professional Auditors and Advisers 425
Why Audit? 426
Who Can Audit Company Accounts? 428
What Happens during an Audit? 430
What's in an Auditor's Report 431
Do Audits Always Catch Fraud? 436
Auditors and the Rules 440
From Audits to Advising 442
Index 445
