Intuit Certified Bookkeeping Professional Teacher Workbook Domain 1 Lesson 1 PDF

Domain 1 Lesson 1 6 | Domain 1 Lesson 1: Intuit Certified Bookkeeping Professional Video Times Intuit Certified Bookkeeping Professional Project Workbook, First Edition Fill-in-the-Blanks Instructions: While watching Domain 1 Lesson 1, fill in the missing words according to the information prese...

Domain 1 Lesson 1 6 | Domain 1 Lesson 1: Intuit Certified Bookkeeping Professional Video Times Intuit Certified Bookkeeping Professional Project Workbook, First Edition Fill-in-the-Blanks Instructions: While watching Domain 1 Lesson 1, fill in the missing words according to the information presented by the instructor. [References are found in the brackets.] 1. Bookkeepers use reliable sources and due diligence to ensure that records are as truthful and accurate as possible. [Ethical Responsibilities] 2. Shareholder’s equity is what is left to be claimed by the owner or shareholders after bills are paid. [Accounting Equation] 3. An income statement summarizes a company’s revenues, costs, and expenses. [Important Financial Reports] 4. With double-entry accounting, a credit entry must have a corresponding debit entry. [Double-Entry Accounting] 5. Liabilities, owner’s equity, and revenue belong on the credit side of a T-account. [T-Accounts] 6. A transaction journal is a chronological record of a business’s transactions. [Transaction Journal and General Ledger] 7. A post reference number correlates with an account in a general ledger to which a transaction was posted. [Transaction Journal and General Ledger] 7 | Domain 1 Lesson 1: Fill-in-the-Blanks Intuit Certified Bookkeeping Professional Project Workbook, First Edition Ethical Responsibilities Project Details Project file Bookkeepers are responsible for the financial integrity of a client’s records and, N/A as such, must inform them of any suspicious activity or illegal requests. Estimated completion time Bookkeepers are also responsible to the client and should maintain 5-10 Minutes confidentiality in every interaction. Society depends on those keeping records to provide clear and honest information. Untrustworthy financial records could Video reference cause an investor to lose money or a bank to refuse a loan. Compliance with the Domain 1 Topic: Accounting Concepts law is equally important, and subpoenas guard bookkeepers from any loss of Subtopic: Ethical Responsibilities integrity in discussions regarding clients’ financial status. Objectives covered Purpose 1 Accounting Basics 1.1 Define accounting and the Upon completing this project, you will better understand a bookkeeper’s concepts underlying accounting responsibilities to clients, society, and the law. measurement 1.1.1 Explain the ethical Steps for Completion responsibilities of bookkeepers 1. Sally is the bookkeeper for Pencil Pros, and her assistant Benny records Notes for the teacher the company’s cash receipts daily. Carla is the owner of Pencil Pros and Discuss real scenarios regarding ethical conundrums. often discusses the company’s financial business with her friend Julie. A reporter from the local paper has come into the shop to ask about a rumor that Pencil Pros is in financial trouble. Mr. Fell from the IRS has also called to request a meeting. After a frustrating day at work, Sally went for dinner with her sister. Which of these people is Sally ethically allowed to share financial statement information with? Label each request Yes or No. a. No Benny sees the cash receipts, but Carla has not mentioned sharing other information. b. Yes Carla is the owner of Pencil Pros. c. No Julie is Carla’s best friend but does not share ownership of the business. d. No The reporter has it on good authority that Pencil Pros is being investigated. e. Yes Mr. Fell revealed a subpoena for Pencil Pros’ payroll records for the last two years. f. No Her sister does not know anyone at Pencil Pros and is a great listener. 8 | Domain 1 Lesson 1: Ethical Responsibilities Intuit Certified Bookkeeping Professional Project Workbook, First Edition Accounting Equation Project Details Project file Businesses use an accounting equation to determine their financial balances. N/A This equation helps offer a clear picture of a company’s well-being at any Estimated completion time moment. It is usually expressed as Assets = Liabilities + Owner's Equity. 10 minutes Assets include anything of value a company owns, and liabilities are things of Video reference value a company owes. If the business were dissolved, the owner’s equity would Domain 1 be paid to owners or shareholders. In other words, if everything a company Topic: Accounting Concepts owned (assets) was sold for cash and the cash was used to pay company bills Subtopic: Accounting Equation (liabilities), any cash left would be given to owners or shareholders (owner’s Objectives covered equity). 1 Accounting Basics 1.1 Define accounting and the Purpose concepts underlying accounting measurement Upon completing this project, you will better understand the accounting 1.1.2 Explain the accounting equation and why it is necessary. equation Steps for Completion Notes for the teacher If time allows, walk the students 1. Pencil Pros’ owner, Carla, is trying to decide if now is a good time to through a few additional scenarios. The retire and close the business. Her balance sheet shows assets of $6,000 main goal is to recognize the accounting equation in all forms. and liabilities of $4,000. How much money will she retire with if she closes the business? a. She will have owner’s equity of $2,000 2. Carla has decided she will wait to retire. Instead, she will invest another $10,000 in Pencil Pros. Assuming the amounts from step 1 are still true, what will her new balances be for assets, liabilities, and owner’s equity? a. Assets $16,000 b. Liabilities $4,000 c. Owner’s Equity $12,000 3. Carla feels good about her decision to keep Pencil Pros open, but she would like to add a kiosk where customers can complete simple projects independently. Research shows a kiosk and supplies to fill it costs $5,000. She decides to take out a loan to cover the costs. What will the new balances be? a. Assets $21,000 b. Liabilities $9,000 c. Owner’s Equity $12,000 4. Pencil Pros received a bill of $2,000 for a bathroom installed last month. Sally, the bookkeeper, records the bill for payment later. What will the new balances be? a. Assets $21,000 b. Liabilities $11,000 c. Owner’s Equity $10,000 9 | Domain 1 Lesson 1: Accounting Equation Intuit Certified Bookkeeping Professional Project Workbook, First Edition Important Financial Reports Project Details Project file Four important financial reports are covered in this section: balance sheet, N/A statement of equity, income statement, and statement of cash flows. Estimated completion time Balance sheets show a company’s net worth when the report is completed. The 5-10 minutes accounting equation is represented from top to bottom on a balance sheet. Video reference Assets appear first, then liabilities, followed by owner’s equity at the bottom. Domain 1 Topic: Accounting Concepts Statements of equity expose changes in equity over a given period. Equity Subtopic: Important Financial assets, not represented in other reports, are included in this statement. The Reports statement shows a beginning balance, income or loss changes, stock issues, Objectives covered capital investments or withdrawals, and a closing balance. 1 Accounting Basics Income statements offer a glimpse at a company’s profit or loss over time. 1.1 Define accounting and the concepts underlying accounting Revenues and expenses are placed side-by-side to expose a company’s measurement profitability. 1.1.3 Describe the purpose and content of balance sheets, The statement of cash flows (cash flow statement) presents owners with a statements of equity, income picture of why money is received or spent. This statement is useful in predicting statements, and statements of cash future cash flow issues. The income statement may show a company operating flows at a profit while struggling to pay monthly bills. These cash-poor circumstances Notes for the teacher can happen when revenue for sales is recorded before payment for the sale is Take this opportunity to discuss each received. Accounts receivable are assets, but they are not cash, and a company report and why a bookkeeper might cannot survive if it is cash poor. A statement of cash flows can also expose a prepare each one. surplus and allow a company to plan for necessary investments or expenses. Purpose Upon completing this project, you will better understand financial reports and how to use them. Steps for Completion 1. The bookkeeper for Pencil Pros, Sally, is looking for answers to the owner’s questions about buying a mobile copy station to expand the business. Carla has asked if it would be better to use cash or credit for the large purchase. Which financial report should Sally prepare for Carla? a. Statement of cash flows 2. Carla has now asked to see a record of Pencil Pros’ profits and losses for the last three years. Sally returns to her office to prepare which financial reports? a. Income statements 3. Sally is preparing to close out the fiscal year. Carla wants to see what her investment is worth. Which financial report should Sally prepare? a. Statement of equity 4. Carla asks Sally to bring something showing the company’s assets as of right now. Which financial report should Sally prepare? a. Balance sheet 10 | Domain 1 Lesson 1: Important Financial Reports Intuit Certified Bookkeeping Professional Project Workbook, First Edition Double-Entry Accounting and Project Details Project file T-Accounts N/A Estimated completion time T-accounts are visual representations of double-entry accounting. Double-entry 15-20 minutes accounting uses debit and credit journal entries for every transaction a company Video reference completes, and the entries must be equal to maintain balance in the accounting Domain 1 equation. Topic: The Double-Entry Accounting Method Purpose Subtopic: Double-Entry Accounting; T-Accounts Upon completing this project, you will better understand the importance of double-entry accounting and the purpose of T-accounts. Objectives covered 1 Accounting Basics Steps for Completion 1.2 Summarize the double-entry accounting method 1. Double-entry accounting requires at least two entries, one 1.2.1 Define double-entry accounting terms each for the debit and credit sides. 1.2.2 Explain how double-entry 2. The entries for debits and credits must be equal. accounting works in accounting software 3. If Pencil Pros sells ten printed packages for a total of $100, Benny will 1.2.3 Demonstrate an understanding of T-accounts record a $100 debit to cash and a $100 credit to sales revenue. Notes for the teacher 4. Pencil Pros sells $500 of product, $200 on account to Sherman Oaks Introduce the concept of natural Academy and $300 in cash sales for 3/14/2021. Record the transaction account balances during this section. in the chart below. Every account has a natural balance: assets, expenses, and dividends are Pencil Pros natural debits. Liabilities and owner’s equity are natural credits. You will see this in detail later in the course. The Account Debit Credit cash and receivable accounts may Cash $300 $000 appear in a different order in student Account Receivable $200 $000 answers; the key is that the amounts Sales Revenue $000 $500 and credit/debit entries match. Totals $500 $500 11 | Domain 1 Lesson 1: Double-Entry Accounting and T-Accounts Intuit Certified Bookkeeping Professional Project Workbook, First Edition Transaction Journal and Project Details Project file General Ledger N/A Estimated completion time A transaction journal is used to record business exchanges in date order as they 5 minutes happen and provides reference information as to where amounts will post in a Video reference general ledger’s chart of accounts. A general ledger maintains account balances Domain 1 for every company account. Topic: The Double-Entry Accounting Method Purpose Subtopic: Transaction Journal and General Ledger Upon completing this project, you will be able to recognize the differences between a transaction journal and a general ledger better. Objectives covered 1 Accounting Basics Steps for Completion 1.2 Summarize the double-entry accounting method 1.2.4 Read and interpret the Date Explanation Reference Debit Credit transaction journal and general ledger in accounting software 2/11/21 Cash GL111 $100 Sales GL211 $100 Notes for the teacher Sold 10 print packages for cash If time permits, discuss the post reference number and journal reference 2/14/21 Utility Expense GL311 $50 numbers. The post reference refers a Cash GL111 $50 bookkeeper to the general ledger page Paid power bill where the post was recorded. The journal reference number refers the bookkeeper to the page of the 1. Is the table above an example of a transaction journal or a general transaction journal that originated a ledger? post. a. Transaction Journal 2. Are debits always displayed on the left and credits on the right? a. Yes 3. What did this company use cash to pay? a. The power bill 4. What is found on general ledger page GL111? a. The cash account 12 | Domain 1 Lesson 1: Transaction Journal and General Ledger Intuit Certified Bookkeeping Professional Project Workbook, First Edition