Financial
Data Collection
Statistics & Risk
Management
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A Brief History
 Robert (Bob) Cratchit (Scrooge’s book-
keeper-by hand-Tiny Tim’s Dad)
 Computer Assisted Book-keeping
 Integrated and Automated Accounting
Systems
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Shoe Box Book-keeping
 Small businesses often avoid book-
keeping processes.
 No time
 No expertise
 No funds
 Big Mistake if Employees are involved.
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Shoe Box Book-keeping
 Save Receipts and Bank Statements and
give them to an Accountant at Tax Time.
 Is it unethical/unlawful to hide income to
avoid taxes….
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Book-keeping Vs. Accounting
 Book-keeping is the collection of business
operations data performed on a
hourly/daily basis.
 Accounting is compilation of the collected
statistical data structuring it for high level
analysis.
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Book-keeping Methodologies
 Receivables: Income/Revenue Data
Collection
 Payables: Expenditure Data Collection
 Internal Transaction Data Collection
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Double-Entry General Ledger
• Journals
• Revenue (Credit/Debit Balanced)
• Expenditure (Debit/Credit Balanced)
• Adjustment (Either Order)
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Double-Entry General Ledger
• General Ledger Accounts
•
•
•
•
Assets (Debit Balance +)
Liabilities (Credit Balance -)
Income (Credit Balance -)
Expense (Debit Balance +)
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Financial vs. Managerial
 Financial Accounting refers to industry
accepted accounting practices used for
public accountability.
 Managerial Accounting is company
specific and usually used internally to
identify problems.
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Financial Reports
 Balance Sheet shows the tangible assets,
liabilities, and capital accounts of an
organization (Net Worth).
 Income Statement shows the operating
income and expenditures (Profit or Loss).
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For Who?
 Who will want to read Financial
Statements/Reports
– Owners/Investors
– Managers
– Customers
– Vendors
– Banks
– Governments (Taxes & Agencies)
Copyright © Texas Education Agency, 2012. All rights reserved.
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