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Accounting Skills for New Supervisors

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Accounting Skills for New Supervisors BOTSWANA’S PREMIER PROVIDER OF VOCATIONAL TRAINING BQA (Botswana Qualifications Authority) ACCREDITED COURSES ACCOUNTING SKILLS FOR NEW SUPERVISORS E-COURSE NOTES Level 1 Learning Together Achieving Together Tel: (+267) 311 48 58 • (+267) 72 309 719 • Email: [email protected] • Website: www.kti.co.bw Accounting Skills for New Supervisors - E-Course Notes Table of Contents Session One: Course Overview .................................................................................................................. 4 Course Overview .................................................................................................................................. 4 Learning Objectives .............................................................................................................................. 4 Pre-Assignment ................................................................................................................................... 4 Session Two: Getting the Facts Straight ................................................................................................. 5 Starting with the Basics ........................................................................................................................ 5 FINANCE ...................................................................................................................................................................... 5 RECORDING FINANCIAL TRANSACTIONS ............................................................................................................................. 5 FINANCIAL REPORTS VS. FINANCIAL STATEMENTS ................................................................................................................ 6 General Accepted Accounting Principles (GAAP) ...................................................................................... 6 Getting to Know the Players .................................................................................................................. 7 WHAT’S MY ROLE? ....................................................................................................................................................... 7 THE BIG PICTURE ........................................................................................................................................................... 7 Identifying the Key Players in Your Organization ..................................................................................... 8 Governing Organizations ....................................................................................................................... 8 Session Three: The Accounting Cycle ....................................................................................................... 11 Underlying Principles .......................................................................................................................... 11 METHODS OF RECORDING TRANSACTIONS ....................................................................................................................... 11 ACCOUNTING PERIODS ................................................................................................................................................. 11 Overview of the Accounting Cycle ........................................................................................................ 12 Case Study: Happy Haircuts ................................................................................................................ 13 BACKGROUND ............................................................................................................................................................. 13 TASK ......................................................................................................................................................................... 13 Session Four: The Key Reports ................................................................................................................. 15 What is the Income Statement ............................................................................................................ 15 The Balance Sheet ............................................................................................................................. 17 BALANCE SHEET EQUATION ........................................................................................................................................... 17 CURRENT VS. FIXED ASSETS ........................................................................................................................................... 17 REMEMBER: ............................................................................................................................................................... 18 The Cash Flow Statement ................................................................................................................... 19 WHAT IS THE CASH FLOW STATEMENT? .......................................................................................................................... 19 Sample Cash Flow Statement .............................................................................................................. 19 Statement of Retained Earnings .......................................................................................................... 20 WHAT IS THE STATEMENT OF RETAINED EARNINGS? .......................................................................................................... 20 Sample Statement of Retained Earnings ............................................................................................... 20 Session Five: Keeping Score ..................................................................................................................... 21 Understanding the Chart of Accounts ................................................................................................... 21 ASSETS ...................................................................................................................................................................... 21 LIABILITIES .................................................................................................................................................................. 21 EQUITY ...................................................................................................................................................................... 21 REVENUE .................................................................................................................................................................... 22 EXPENSES ................................................................................................................................................................... 22 Single vs. Double Entry Accounting ...................................................................................................... 22 SINGLE ENTRY ACCOUNTING .......................................................................................................................................... 22 DOUBLE ENTRY ACCOUNTING ........................................................................................................................................ 22 Self-Test ........................................................................................................................................... 23 Session Six: A Review of Financial Terms ................................................................................................. 25 Match Up! ......................................................................................................................................... 25 Hint .................................................................................................................................................. 27 Session Seven: Understanding Debits and Credits ................................................................................... 28 Debits and Credits Demystified ............................................................................................................ 28 Working with Debits and Credits .......................................................................................................... 29 2020 Kalahari Training Institute. 1 Accounting Skills for New Supervisors - E-Course Notes Session Eight: Your Financial Analysis Toolbox ........................................................................................ 31 Identifying the Relevant Data .............................................................................................................. 31 Analysing the Data ............................................................................................................................. 31 USEFUL RATIOS ........................................................................................................................................................... 31 CURRENT RATIO .......................................................................................................................................................... 31 QUICK RATIO .............................................................................................................................................................. 32 NET AND GROSS PROFIT MARGIN .................................................................................................................................. 32 CAUTION!
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