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close this bookAccounting for the Microbusiness - A Teaching Manual (Peace Corps; 1975; 105 pages)
View the documentInformation
View the documentAcknowledgement
View the documentIntroduction
close this folderThe system
View the documentThe preliminary interview
View the documentLesson # 1
View the documentLesson # 2
View the documentLesson # 3
View the documentLesson # 4
View the documentInstallation of the system
View the documentFollow-up visits
View the documentMonth end financial statements
View the documentAnalysis
View the documentThe financial statements
View the documentAdditional controls
View the documentOdd entries
Open this folder and view contentsAids
 

Lesson # 2

OBJECTIVES:

To explain:
a) Transactions
b) Paper Work
c) Overview of System
d) Cash Book
e) The gathering of information for initial balance sheet.

MATERIAL AIDS:

Bulletin Board Aids: 2, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19
Handout Aids: 16, 18, 19.
NOTE: Cover one classroom wall with Aid 17.

METHODOLOGY:

 

1.

Aid 2. The object of accounting is to collect transactions, to organize and register them and to present them in a way that facilitates analysis.

2.

What is a transaction? Discussion.

 

2.1 "An interchange of two things of value".

 

2.2 Aid 10. In every transaction there is more of one thing and less of another.

 

2.3 The more is called Debit.
The less is called Credit.

 

2.4 Aid 11. The evolution of Debit and Credit.

 

2. 41 If I give you two oranges, I have two less (make entry).
If you give me two apples, I have two more (entry).

 

2.42 If I give you three oranges, I have three less or a "credit".
If you give me three apples, I have three more or a "debit".

 

2.43 If I buy $100 of raw materials, I enter $100 as a "credit" to cash and $100 as a "debit" to raw materials.

 

2.44 If I sell $500 in merchandise, I enter $500 as a "debit" to cash and $500 as a "credit" to raw materials.

 

2.5 Aid 12. How many types of transactions are there? Discussion.

 

2.51 Cash ... where the interchange of two things of value takes place on the same day. Examples.

 

2.52 Credit... where the interchange takes place on two different days. Examples.

3.

Why Paper Work? Discussion

 

3.l Evidence to prevent errors, omissions, and tricks;

 

3.2 A record for accounting.

 

3.3 Demonstrate a cash voucher (Aid 13), a sales voucher (Aid 14), and a receipt (Aid 15).

4.

Aid 16. Diagram of the System. Explain first two steps.

 

Cash transactions are entered in the Cash Book.

 

Credit transactions are entered in the Credit Book.

5.

Aid 17. The Cash Book. this model should be on the wall.

 

5.1 Explain the book's three sections: Information, Money, Accounts,

 

5.2 Explain each one of the accounts.

 

5.3 Aid 18. Handout the "Guide to Account Entries " and use it to explain entries

 

5.4 Aid 19 Present this list of transactions one by one saying.
"Is this a cash or credit transaction?" Cash.
Where do we enter cash transactions?" Cash Book.
"How?''

 

5.5 Explain how to "square" the Cash Book page.

 

5.51 The total of all debits must equal all the credits

 

5.52 Add all columns vertically, then add all debit balances and all credit balances.

 

5.53 If not equal,
a) check all entries for debits and credits;
b) check addition

 

5.6 Pass squared account balances on to the next page.

6.

Review list of fixed assets and their values.

7.

Referring to the "Initiation Sheet" request list of all suppliers, clients and creditors with account balances for the next session.

8.

Advise students that they will buy their books at the next session and announce their price.

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