Accounting And Things

Hello. I have started the morning with Accounting 😮 In case you’re wondering about my time zone, it’s UTC +6 hours 😮 So, yeah. Morning. I am probably living in the future for most of my readers. If you want to ask me about the future, feel free to do so. But the answers will be boring, I sincerely warn you.

Today’s scrappy lesson is on Control Accounts! Can I hear a what-what? Dyam now!

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Control Accounts: This is a mini-trial balance to find inconsistencies within accounts 😮 They contain the ‘totals’ of various accounts from a particular time.

Sales Ledger Control Account: Summaries of Debtor Accounts from the Sales Ledger. This account is the effects WE will have for the sh*t they deal with. 😮 Eg. Their return inwards is debit for them. But it’s an account for us! So it’s the oppiste. Hence the Return Inwards is credit on the total debtors account. Yeay!

Purchase Ledger Control Account: Summaries of  credit-supplier’s accounts from the Purchase Ledger. This account is totally for us 😛 Wel the other one was too but that’s a little more confusing than this.

Dishonored Cheque: You receive a cheque: Debtor credited & Bank debited.Here the cheque is dishonoured, which means the bank was tolerant enough to deal with your not-paying-back crap for a while. So the person you didn’t pay back to yet is now a debtor, hence debtor debited and bank credited.

Set/Offs or Contras are used to correct mistakes in amounts :I Not sure what it DOESN’T have to do wth PORCOW, but whatever. In the Sales Ledger Control Accounts, this occurs on the credit side.

Image by Lila

Will this turn into an Accounting Blog?

 

I am not sure. I miss writing Literature note to balance the Commerce portion here. But now I am giving that sh*t up. Oh well.

Today I will continue from where I left off yesterday..

Rate of Stock Turnover:

Y’all need to know the frequency of use/sale of stock 😮 The higher the frequency, the higher shortage of stock (causing you to spend more money on rent, utilities, etc for maintaining stock) :I. Turnover means yield…..interesting. Yield from stock!! 😮 *facepalm* The business needs to sell as fast (and furious-Ly) possible without losing profitability.

Cost Of Goods Sold/Average stock (Averaging the opening and closing stock, mothaf*cker!) Calculated in “Times”.

Liquidity Ratios:

Liquid means “The ability to convert an asset to cash quickly.“………..That’s all folks :I I don’t want to study this shit nor more AAAAAhhh!!!!!!!!!!

 

Image by Paul Militaru

Accounting…..Keep Writing

Dudetts and Dudes, I am a little sick today. My nose is runny, my eyes get teary with every sniff and my sniffing is violent. Anyhow, I hope the following simplified version of my ratio-definition, whatever-f*cking helps. Too sick. *Gags to death*

Profitability Ratios to see how nigh is the end for the business. :I

Gross Profit Margin: Because you are too impatient to go through the process to find the net profit. So you find the profit for every sale without even considering all the expenses.

GP/Sales x 100

Gross Profit Mark-Up: Same thing. You can’t wait? So here you consider the Gross Profit for ever COGS item :I

GP/Cost of Sales x 100

Net Profit Margin: revenue left after all expenses have been deducted from sales. Finally a proper one :I

NP/Sales x 100

Accounting to Google, margin means “an amount by which a thing is won or falls short.” Makes sense? It does a little for me.

Expenses to Sales as a Percentage:

A ratio of expenses: sales is needed because it shows if there’s been an increase in the expenses at a certain period of time. If there has been, the business’s health is declining.

Expenses/Sales x 100

Return on Capital Employed:

How much of a return are you getting from the business after investing in it (with the capital), Eh? Tell me, you liar! OK, I’ve gone mad(er). This is the most important ratio of all; the higher the ratio, the better. And the capital employed means the average of the Opening Capital and Closing Capital.

Net Profit/Capital Employed x 100

Image by Paul Militaru

Day 1: Accounting

Join me as I gather magical gems from the perplexing AS Accounting.book (but I hope the crap I am giving here is easy crap).

But these can be wrong too; don’t sue me if you find a mistake D: Feel free to call me out whereever I am wronggggaaa (No, that’s not the wrong way to say wronggggaaa)