introduction to bookkeeping and accounting

WELCOME EHV SUMMIT

Introduction to bookkeeping &

Accounting

t: @senoltapirdamaz | stapirdamaz@dewert.nl

Senol Tapirdamaz

Let me introduce myself

Senol Tapirdamaz

The Creative Assistent Accountant @DeWert1959Focus on startups and growers Small Business EnterprisesBookkeeping, Annual Reports, Fiscal Declarations AcquisitionDWO member

You can find me on

VISION

The life of an entrepreneur knows important moments. When you start your business for example, when you expand or shrink, if you want to collaborate or want to quit. You make choices that each one affect the future of your company. De Wert will gladly

help you.

Since 1959 we support entrepreneurs with accountancy, tax and HR advice, payroll and administrative services. So what stage

you're in: with De Wert you are sure of your business.

Who is De Wert?

Our topics

• Summary of bookkeeping / accounting• Financial and Management accounting• Assets – Liabilities – Revenues –

Expenses• Capital• Accounting equation

WHY????

It’s for your own good

Historical reference Predictive reference

Record en determine financial happenings, solely to decide the endings of your business

Do I need to change something? Do I need more money? Do I need a employees?

Bookkeeping in basic terms

• Collect: Organize all incoming/outgoing billsbankstatements etc.

• Record: Enter all data of your businessadministration

• Process: Definite determining the records in

the administration for accountability

Bookkeeping to AccountingBusiness Financial

Transactions(sales & purchases)

Documentation(Invoices & Credits)

Prime books of entry(e.g. sales day book,Cash

book, Journals

Ledger accounts

Trial Balance

Profit and Loss (PNL) Balance Sheet

Cash Flow

Ledger accounts

Financial Transactions

• Sales – exchanging a good or service for money• Purchase – buying a good or service• Payments – transfer of money to someone else

(for example, for purchases or for wages to employees)

• Receipts – getting money from someone else (for example, from customers)

• Petty cash – paying for low value items with a small fund of cash

• Payroll – wages and salaries paid to employees, and any payroll taxes

Keep these records for

221,011,200 seconds3,683,520 minutes

61,392 hours2,558 days365 weeks84 months

Which Transactions do I need to save

• Quotation• Purchase Order• Delivery note• Goods Received Note• Invoice• Credit note• (Bank)statements• Calendar

And now the fun begins

Assets = Liability + Equity

Example BalanceAssets

Current AssetsInvestmentsProperty , plant, equipmentIntangible assetsOther assets

Total Assets

Liabilities & Equity

Equity

Long term liabilityCurrent liabilityTotal Liability

Total Liability & Equityt: @senoltapirdamaz | stapirdamaz@dewert.nl

ASSETS LIABILITY EQUITY

CASH ACC / REC

INVEN. ACC/ PAY

UTIL / PAY

JIM, CAP

All amounts in € ASSETS LIABILITY EQUITY

CASH ACC / REC

INVEN.

ACC/ PAY

UTIL / PAY

JIM, CAP

CASH ACC / REC

INVEN.

ACC/ PAY

UTIL / PAY

JIM, CAP

Juan invests in business

€ 12,000 € 12,000

CASH ACC / REC

INVEN.

ACC/ PAY

UTIL / PAY

JIM, CAP

Juan invests in business 7,500 7,500

CASH ACC / REC

INVEN.

ACC/ PAY

UTIL / PAY

JIM, CAP

12,000 12,000

Juan gets inventory on credit

CASH ACC / REC

INVEN.

ACC/ PAY

UTIL / PAY

JIM, CAP

Juan gets inventory on credit 6,500 6,500

CASH ACC / REC

INVEN.

ACC/ PAY

UTIL / PAY

JIM, CAP

12,000 12,000

Juan rents a shop - 600 - 600

CASH ACC / REC

INVEN.

ACC/ PAY

UTIL / PAY

JIM, CAP

Juan rents a shop - 1,000 - 1,000

CASH ACC / REC

INVEN.

ACC/ PAY

UTIL / PAY

JIM, CAP

12,000 12,000

CASH ACC / REC

INVEN.

ACC/ PAY

UTIL / PAY

JIM, CAP

Juan makes a sale on credit 5,000-2,200

5,000- 2,200

CASH ACC / REC

INVEN.

ACC/ PAY

UTIL / PAY

JIM, CAP

12,000 12,000

CASH ACC / REC

INVEN.

ACC/ PAY

UTIL / PAY

JIM, CAP

5,000- 2,200

Juan pays the Acc/Pay - 6,500 - 6,500

CASH ACC / REC

INVEN.

ACC/ PAY

UTIL / PAY

JIM, CAP

12,000 12,000

CASH ACC / REC

INVEN.

ACC/ PAY

UTIL / PAY

JIM, CAP

5,000- 2,200

Juan collects part of Acc Rec 3,500 -3,500

CASH ACC / REC

INVEN.

ACC/ PAY

UTIL / PAY

JIM, CAP

12,000 12,000

CASH ACC / REC

INVEN.

ACC/ PAY

UTIL / PAY

JIM, CAP

5,000- 2,200

Juan gets the electricity bill 300 -300

CASH ACC / REC

INVEN.

ACC/ PAY

UTIL / PAY

JIM, CAP

12,000 12,000

CASH ACC / REC

INVEN.

ACC/ PAY

UTIL / PAY

JIM, CAP

5,000- 2,200

Juan withdraws some cash - 1,500 - 1,500

CASH ACC / REC

INVEN.

ACC/ PAY

UTIL / PAY

JIM, CAP

12,000 12,000

CASH ACC / REC

INVEN.

ACC/ PAY

UTIL / PAY

JIM, CAP

5,000- 2,200

End of the month for Juan 2,000 1,500 4,300 0 300 7,500

CASH ACC / REC

INVEN.

ACC/ PAY

UTIL / PAY

JIM, CAP

12,000 12,000

CASH ACC / REC

INVEN.

ACC/ PAY

UTIL / PAY

JIM, CAP

5,000- 2,200

Juan in a MillionBalance Sheet End of Month

Assets Liabilities + EquityInventory 4,300 JIM Capital 7,500

Accounts Receivable 1,500 TOTAL EQUITY 7,500Cash 2,000 Accounts Payable 0

Utilities Payable 300

TOTAL LIABILITY 300

TOTAL ASSETS 7,800 TOTAL LIABILITIES + EQUITY

Oh joy! More Fun!

Revenues = Expenses + Net Income

• You need this for your income statement

• This Income Statement reports yourResults of Operations

• It’s measures over a period of time

• Revenues = New Assets from providing goods and services to customers

• Expenses = Assets sacrificed to secure/be able to provide the revenues

• Net Income = The change in Equity derived from transaction with customers

CASH ACC / REC

INVEN.

ACC/ PAY

UTIL / PAY

JIM, CAP

€ 12,000 € 12,000

CASH ACC / REC

INVEN.

ACC/ PAY

UTIL / PAY

JIM, CAP

CASH ACC / REC

INVEN.

ACC/ PAY

UTIL / PAY

JIM, CAP

12,000 12,000

CASH ACC / REC

INVEN.

ACC/ PAY

UTIL / PAY

JIM, CAP

CASH ACC / REC

INVEN.

ACC/ PAY

UTIL / PAY

JIM, CAP

12,000 12,000

CASH ACC / REC

INVEN.

ACC/ PAY

UTIL / PAY

JIM, CAP

CASH ACC / REC

INVEN.

ACC/ PAY

UTIL / PAY

JIM, CAP

12,000 12,000

CASH ACC / REC

INVEN.

ACC/ PAY

UTIL / PAY

JIM, CAP

Juan makes a sale on credit 5,000 5,000

-2,200 -2,200

CASH ACC / REC

INVEN.

ACC/ PAY

UTIL / PAY

JIM, CAP

12,000 12,000

CASH ACC / REC

INVEN.

ACC/ PAY

UTIL / PAY

JIM, CAP

-2,200 -2,200

CASH ACC / REC

INVEN.

ACC/ PAY

UTIL / PAY

JIM, CAP

12,000 12,000

CASH ACC / REC

INVEN.

ACC/ PAY

UTIL / PAY

JIM, CAP

-2,200 -2,200

CASH ACC / REC

INVEN.

ACC/ PAY

UTIL / PAY

JIM, CAP

12,000 12,000

CASH ACC / REC

INVEN.

ACC/ PAY

UTIL / PAY

JIM, CAP

-2,200 -2,200

CASH ACC / REC

INVEN.

ACC/ PAY

UTIL / PAY

JIM, CAP

12,000 12,000

CASH ACC / REC

INVEN.

ACC/ PAY

UTIL / PAY

JIM, CAP

-2,200 -2,200

Juan in a MillionIncome Statement Month X

Sales 5,000

Cost of Goods Sold - 2,200

Gross Margin 2,800

Operating Expenses:

Rent Expense - 1,000

Utilities Expense - 300

Total Operating Expenses - 1,300

Net Income 1,500

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