Business Administration &
Management
Mr. Bernstein
Record Keeping –
Time Consuming but Important,
pp 383-391
May 2017
Business Administration &
Management
Mr. Bernstein
Accounting Systems
Businesses keep score
GAAP: Generally Accepted Accounting Principles
The Accounting Equation: Assets = Liabilities + Owner’s
Equity
Assets are anything of value (ie cash, equipment,
accounts receivable)
Liabilities are anything the business owes
Owner’s Equity is the net worth of the business
(Assets – Liabilities = Owner’s Equity)
2
Business Administration &
Management
Mr. Bernstein
Accounting Systems
Greatly aided by automation
Can be in-house or outsourced
Legal Requirements can be found at:
http://www.irs.gov/Businesses/Small-Businesses&-Self-Employed/Recordkeeping
3
Business Administration &
Management
Mr. Bernstein
Accounting Systems
Accounting Procedures
Create accounts
Record entries into journals
Use cash basis or accrual basis
Post to ledgers
Journals should be updated daily if not constantly
Journal entries should be posted to ledgers weekly or
more often
4
Business Administration &
Management
Mr. Bernstein
Examples of Accounts for Journals
Sales
Office Supplies
Rent
Utilities
Purchases
Payroll
Depreciation
5
Business Administration &
Management
Mr. Bernstein
Examples of Accounts for Journals: Payroll Data
6