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Re: Short Accounting Course?
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Good? hahaha... Double entry is just basics in Diploma in Accountancy (DIA). It is shamefull if i don't know the basic. Btw, i repeat my financial accounting 2 paper because i don't do much exercise. lol.

Posted on: 2009/11/10 18:03
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Re: Short Accounting Course?
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I have other computer inventory stuff apart from computer.

laptop, hardisk purchase, lcd monitor. modem.. etc. So i group them into a single account? like this?

Dr: Computer inventory a/c RMxxxx
Cr: Bank a/c RMxxxx


Posted on: 2009/11/10 18:37
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Re: Short Accounting Course?
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Quote:

quiroz wrote:
Dr: Laptop computer a/c RM2000
Cr: Bank a/c RM2000

Laptop computer is considered as a Non-Current asset in a Balance sheet a/c if you are using it for the entity of the accounting. You will need to calculate the depreciation of it later on every end of accounting period. Say, account period is calculated in a year.Depreciation will be calculated every end of the accounting period for the Non-Current Asset. Ex. for other Non-current assets are Motor Vehicle, Building, Furnitures and fittings and et cetera. The only Non-current asset that do not depreciate is Land because land only appreciates. There will be another account involved in calculating the increase of price of non-current asset which is Aset Revaluation Reserve a/c.

You credit bank because that is the amount that you pay, not receive. Plus, do not put the purchase of Non-Current asset in the purchse a/c because purchases a/c only involve in purchasing of raw materials or that is use to buy other material used in the production of a product in your firm.

Personal a/c?? so, this involve:
Dr: Cash/bank a/c RM2000
Cr: Capital a/c RM2000

then,

Dr: Laptop computer a/c RM2000
Cr: Bank a/c RM2000




Just to clear things up a bit regarding the purchase using the personal account. Webbie, are you the owner of the firm or shareholder of the firm? cos it will affect the double entry. We cant just credit the capital account just like that. Capital a/c is for the amount of share you held in the company. If you intended to get back the money from the firm, the correct entry will be:

Dr: Laptop computer a/c RM2,000
Cr: Loan from shareholder/director (depending on what is your position in the company, which most local firm, the shareholder and the director is the same)

Upon payback of the loan, it will be:
Dr: Loan
Cr: Bank

The reason behind this is because if you were to credit the capital account by RM2,000, it means you are selling off your share in the company by RM2,000. which is not true cos your share cert will still remain the original share held. So, in almost all cases, it is treated as a loan from the shareholder/director. This is because the owner and the company is treated as 2 different entity in legal terms.

Posted on: 2009/11/10 19:20
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Re: Short Accounting Course?
Quite a regular
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Quote:

webbie wrote:
I have other computer inventory stuff apart from computer.

laptop, hardisk purchase, lcd monitor. modem.. etc. So i group them into a single account? like this?

Dr: Computer inventory a/c RMxxxx
Cr: Bank a/c RMxxxx



regarding this, you are allowed to group them into a single account but minus the "inventory" word to avoid confusion.
However, you have to prepare a Fixed Asset Listing to list out the details of the assets i.e. year of purchase, amount, description and whatever is relevant. And make sure the total cost in the list must tally with the total in your computer a/c. This is necessary when your company is being audited. The Fixed Asset Listing is good for keeping track of all your computer stuffs.

Posted on: 2009/11/10 19:26
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Re: Short Accounting Course?
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im the sole proprietor of the firm.

ah many thanks Northstar. I will read more about the Fixed Asset Listing. that can be a good help in keep track of my electronic inventories.


Posted on: 2009/11/10 19:34
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Re: Short Accounting Course?
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Huh??? since when there is loan involved??
Northstar, the question is this:

If I purchase a laptop computer of RM2000 from my personal banking account.
what to debit or credit? inventory? assets?

That is the question. When loan get involved? or did he buy it on loan or credit??

Posted on: 2009/11/10 19:43
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Re: Short Accounting Course?
Just can't stay away
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Found this interesting excel file which is used for Fixed assets management.

http://www.vertex42.com/ExcelTemplates/inventory-spreadsheet.html

Posted on: 2009/11/10 19:48
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Re: Short Accounting Course?
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Quiroz:
Sorry for the confusion. The reason why i mention "loan" is that i didnt know he's the sole proprietor at the point of time when i post the reply. Since that's the case, your entry is also correct. At the point of posting, i'm stating the treatment based on the normal treatment for company with two or more shareholders. In companies with two or more shareholders, its required to separate it out as "loan from shareholders". However, if you read my earlier post, I did specify the loan as "loan from director/shareholder". Not purchase on credit.

The term "Loan" here is not referring to the normal loan like bank loan or anything. Its the loan from the owner (Webbie) to the company.


Posted on: 2009/11/10 23:24
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Re: Short Accounting Course?
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ooo... ok... still, he did not mention lending the money. huhu.

Posted on: 2009/11/11 4:18
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Re: Short Accounting Course?
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thanks northstar for providing the extensive scenario in accounting.
im finally getting along with accounting now.


Posted on: 2009/11/11 9:39
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