Accounting: Payment Procedures and Wage Office

Procedures for Making Payment

• Cash Payment: payment made in cash, e.g., cash purchased from market
• Credit Payment: payment made on credit, e.g., buying goods on credit from suppliers
• Cheque Payment: payment made through a cheque, e.g., paying salaries to employees
• Electronic Payment: payment made through electronic means, e.g., online banking

Wage Office

• Functions:
  • Preparation of payroll
  • Calculation of wages and salaries
  • Payment of wages and salaries
  • Maintenance of employee records
• Importance:
  • Ensures timely payment of wages and salaries
  • Maintains employee morale
  • Helps in budgeting and financial planning

Store Records

• Types of Store Records:
  • Bin Card: a card that records the quantity of goods stored in a bin
  • Store Ledger: a book that records all transactions related to goods stored
  • Goods Received Note: a document that acknowledges receipt of goods
• Importance:
  • Helps in stocktaking and inventory management
  • Ensures accurate recording of goods stored
  • Facilitates efficient management of store operations

Trial Balance and Trading & Loss Account

• Trial Balance:
  • A list of all ledger accounts and their balances
  • Helps in detecting errors and preparing financial statements
• Trading and Loss Account:
  • A financial statement that shows the profit or loss of a business
  • Calculated by matching revenue with expenses

Book-keeping

• Definition: the process of recording, classifying, and reporting financial transactions
• Objectives:
  • To provide financial information for decision-making
  • To ensure accountability and transparency
  • To facilitate financial planning and control
• Types of Book-keeping Systems:
  • Single-Entry System: records only one aspect of a transaction
  • Double-Entry System: records both debit and credit aspects of a transaction

Payment Methods

• Cash payment is made in cash, e.g., cash purchased from a market.
• Credit payment is made on credit, e.g., buying goods on credit from suppliers.
• Cheque payment is made through a cheque, e.g., paying salaries to employees.
• Electronic payment is made through electronic means, e.g., online banking.

Wage Office

Functions

• Prepares payroll.
• Calculates wages and salaries.
• Pays wages and salaries.
• Maintains employee records.

Importance

• Ensures timely payment of wages and salaries.
• Maintains employee morale.
• Helps in budgeting and financial planning.

Store Records

Types of Store Records

• Bin card records the quantity of goods stored in a bin.
• Store ledger records all transactions related to goods stored.
• Goods received note acknowledges receipt of goods.

Importance

• Helps in stocktaking and inventory management.
• Ensures accurate recording of goods stored.
• Facilitates efficient management of store operations.

Financial Statements

Trial Balance

• Is a list of all ledger accounts and their balances.
• Helps in detecting errors and preparing financial statements.

Trading and Loss Account

• Shows the profit or loss of a business.
• Is calculated by matching revenue with expenses.

Book-keeping

Definition

• Is the process of recording, classifying, and reporting financial transactions.

Objectives

• Provides financial information for decision-making.
• Ensures accountability and transparency.
• Facilitates financial planning and control.

Types of Book-keeping Systems

• Single-entry system records only one aspect of a transaction.
• Double-entry system records both debit and credit aspects of a transaction.

This quiz covers the different methods of payment, including cash, credit, cheque, and electronic payments, as well as the functions of a wage office in accounting.