Clarify the business entity principle, objectivity principle, and time period concept. Illustrate with owner transactions, objective evidence like invoices and timecards, and annual and quarterly reporting expectations.

Explain the materiality principle, distinguish material from immaterial items, and apply GAAP for material transactions; disclose potential liabilities, environmental issues, and continuing concern with the conservatism principle.

Explore debits and credits indicate increases and decreases in accounts, determine normal balances, and use accounting equation to know assets increase with a debit and liabilities increase with a credit.

Analyze real-world embezzlement cases driven by weak internal controls and learn how robust controls prevent theft in bookkeeping and payroll environments.

Internal controls involve management and staff to safeguard assets, ensure accurate accounting, comply with Sarbanes-Oxley and laws, and guide operations through policies that control costs; everyone participates.

Explore internal controls across the organization, enforcing segregation of duties, purchase requisitions and approvals, asset removal, inventory counting, and obsolescence to protect the books.

Explore how Sarbanes-Oxley elevates CEO and CFO accountability with quarterly control certifications. Document internal controls, address deficiencies, and extend responsibility across the organization for audit readiness and stronger monitoring.

Explore how the Sarbanes-Oxley Act applies to public companies and strengthens controls. It centralizes documented processes, automates controls, and improves compliance and reporting, though costs rise.

Post sales entries to accounts receivable, the sales journal, and the customer ledger; include a posting reference and memo noting the sales invoice number and sales tax payable.

Post daily to move cash quickly into the system, and summarize accounts receivable, sales, and sales tax payable into ledger accounts, typically on a monthly cycle.

Demonstrate posting to the sales journal's credit account, showing that sales increase by a credit, and record a $506 posting with the appropriate page reference and account number.

Learn how special journals and control accounts consolidate totals from related accounts, such as accounts receivable and sales tax payable, enabling division of accounting tasks like posting and month-end reconciliation.

Illustrates posting monthly totals from computer sales and legal services to the sales control account via special journals, and emphasizes timely posting rather than waiting until month-end.

Record cash receipts daily by posting immediately to the cash receipts journal and depositing funds to reduce theft risk. Learn the journal's special columns and the transaction date.

Review end-of-month steps for the cash receipts journal, noting daily processing, then record the fourth transaction: 400 in sales, 22 in sales tax payable, and 422 in cash.

Note the posting reference for cash and sales tax payable balances, then post those amounts into the individual accounts using the account numbers below.

Learn how cash versus credit card payments are recorded in special journals, with credit cards treated as cash sales and processing fees and sales tax payable handled daily.

Post for the day in special journals—purchases, totaling all columns for March 2 as we record a $5,000 purchase from Computer XYZ and other software and computer systems.

Illustrates a special journal purchases entry with a three-line compound entry: two debits for computer systems and legal software and a credit to accounts payable, posted to the subledger.

Own and be accountable for reconciliations, ensuring accuracy and timely completion with necessary adjustments before closing the books; consult the controller and apply materiality for monthly vs quarterly reconciliations.

Learn how to distinguish reconciled differences from unreconciled ones, assess material versus immaterial items, and map processes to ensure timely adjustments in inventory reconciliations.

Assign the reconciliation review to an accountant or knowledgeable supervisor, ensuring the reviewer understands the account and business context. Collaborate as a second set of eyes to verify accuracy.

Complete the reconciliation when the general ledger agrees with the subledger. Also confirm the subledger activity and roll forward look reasonable, and that the account has been reviewed by another.

Learn how account reconciliation serves as a key control, who should perform and review it, and when to use a roll forward for trend analysis to assess activity.

correct a wrong amount in the general ledger by adjusting the difference rather than reversing the entry, as shown with a $18 transposition in the utility bill journal.

Record a correcting entry with precise amounts for general ledger. Show the original entry was $18 too much and should have been 357; store the documentation in the closing folder.

Learn to correct a wrong amount by reversing the entry and posting a compound journal entry, debiting cash and crediting utility expense from 375 to 357, with a correction notation.

Make an adjusting entry to move the $375 from telephone expense to utility expense by crediting telephone expense to reverse the original debit and debiting utility expense.

Reverse the original incorrect entry with a reversing entry to maintain an audit trail, then post the correct entry and emphasize rigorous month-end closing to catch errors before reporting.

Sales tax, a state mandated percentage on purchases, varies by state and item; bookkeepers collect and remit it, filing required use tax forms for retail businesses.

Explore how point-of-sale registers calculate and report sales tax for daily general ledger entries. Use a $100 sale to compute $5.50 tax and a $105.50 total with a 0.055 rate.

Sales tax rates vary widely by state, with no tax in New Hampshire, Delaware, Montana, and Oregon, while California and New York exceed eight percent; bookkeepers should consult local authorities.

Examine sales tax rules and filing for New York state, detailing the local quarterly sales and use tax return, filing options, and remittance methods such as check or wire transfer.

Explain how a merchandising business earns profit by selling goods, recording sales and cost of goods sold, tracking inventory and freight, and calculating gross profit versus operating expenses.

Learn how merchandising returns create credits recorded as credit notes in the sales journal, reducing sales with bracketed amounts and date, name, and reference numbers.

Post a credit note to Paula Plenty's customer ledger, reducing balance from 350 to 300 after a 50 credit, with 900 credit limit and net 30 terms.

Record returns and credit notes in the sales returns and allowances contra revenue account to maintain accurate merchandising revenue data and enable percentage tracking.

Learn how sales discounts incentivize early payment and are recorded in a contra revenue account with a debit balance, helping you track cash flow and the impact on sales.

Learn how credit terms like net 30, net 45, and two over ten net 30 unlock early payment discounts, including calculating a 2% discount on $300.

Record purchase discounts as a contra asset that offsets the purchases asset when customers or vendors pay early.

Calculate cost of goods purchased for the income statement in a periodic system by starting with purchases, subtracting returns and allowances and discounts, then adding freight.

The perpetual inventory system uses computer monitoring to track stock, enforce reorder points, reduce theft, and auto-reorder; purchases debit inventory, sales credit inventory and record cost of goods sold.

Define petty cash as a small cash asset kept in a safe for purchases when checks are impractical, such as stamps or weekend repairs, usually 100 to 200 dollars.

A bookkeeper records petty cash transactions in the purchases journal and maintains the petty cash sheet, and upon replenishment restores the fund to $100 after expensing used amounts.

Replenish petty cash by tallying expenses—postage, office supplies, and sales tax—and posting a general journal entry to restore fund to $100. This unusual example uses $15.28 to illustrate timely replenishment.

Record a petty cash entry in general journal by debiting postage, office supplies, and sales tax, credit cash, and reimburse with a check; note check number and posting reference.

Implement strict cash internal controls by securing cash in locked safes, restricting access, and giving cashiers sole responsibility for their drawers, with daily counts and deposits within three business days.

Record end-of-shift cash using count sheets and the daily cash summary; ensure accurate cash receipts journal entries, apply restrictive endorsements on checks, and involve the comptroller to reconcile bank deposits.

Demonstrates recording cash over and short in the cash receipts journal, showing how overages and shortages affect sales, cash, and the cash over and short accounts through compound journal entries.

Explore how bank statements capture monthly activity, including beginning and ending balances, checks, deposits, debit memos for service fees, credit memos for interest, and NSF checks.

Learn how to handle bank errors by noting the issue, contacting the bank, and ensuring corrections on the bank statement, with no entry required. Then review the next bank statement.

Verify bank transactions against the books, compare bank deposits with book deposits, note debit and credit memo entries, document the reconciliation in Excel, and seek supervisor approval.

Perform a bank reconciliation to align bank and book balances, adjust for outstanding checks and deposits in transit, and record notes, interest, and fees.

Review chapter 9 covers cash accounting, petty cash controls, journal entries and reimbursements, internal controls over cash registers, over/short cash, and bank reconciliations with corrections to the cash book.