Review CBM 2
Accounting
Prepare and maintain payroll
records using computerized and
manual systems (ch 13)
• Where does the employer keep the records of
employee’s payroll?
Payroll register
Understand how to create and
maintain the accounts receivable
subsidiary ledger (ch 11)
• Which transactions are recorded in this ledger
account?
– Money received from customers who owed
money.
• Where do we find the information?
– From Cash receipt Journal (A/Receivable will be
credited.(What is owed gets reduced) Cash will be
debited)
Understand how to post
information from the journal to the
ledger (ch 11)
• What are the steps to post ?
– Date
– Journal page number
– Amount
– Calculate new balance
– Write ledger account number in journal
Describe the advantages and
disadvantages of credit
• Advantages:
– Create a credit history.
– Get items before you actually have the money
• Disadvantages:
– Debt
– Pay late: create a bad credit report
– Interest makes you pay more for an item
Understand the relationship of the
journal to the ledger
• General Journal, Sales Journal, Purchase
Journal, Cash receipts Journal, Cash Payments
Journal From these journals, we post to the
subsidiary ledger accounts which are in the
general journal
Understand how to prepare
federal, state, and local payroll
reports (ch 12 and 13)
• W 2- record of an employee’s Gross Income and
taxes withheld
• W4- Where the employee indicates the number
of withholdings (the more withholdings, the less
taxes paid.)
• W 3- What the employer reports to the federal
govt. what he paid and withheld from employees
Plan investment strategies for
today and for the future
• High (real estate, collectibles, any minerals,
stocks)
• and Low risk investments (cd’s; savings
account, bonds)
Prepare and maintain payroll reports
using manual and computerized
systems (Ch 12 and 13)
• FICA: Social Security and Medicare tax – both
employer and employee pays.
• SS 6.2 % - .062 x gross pay (Has tax base)
• Medicare 1.45% - .0145 x gross pay (no tax base)
• The employer has to match it
• Employer only pays: unemployment taxes – up to
$7000 earnings per employee.
Understand how to post
information from the journal to the
ledger ch 11
• Know the steps.
• Starting a new page: put a check mark in the
post ref column where the balance is brought
forward
Understand how to calculate
employer's payroll taxes and benefits
paid by the employer (Ch 12 and 13)
• Net pay: gross pay minus deductions
• Week has 40 hours. All hours over 40 are paid
1.5 rate
– If someone worked 45 hours at $10 hour.
– $40 x $10 + 5 hours x $15 = $400 + $75 = $475
Analyze the trial balance to determine
the necessary adjustments to prepare
financial
statements (ch 8)
• Trial balance: all the balances from the ledger
accounts
• We use the Worksheet to determine the trial
balance.
• When we take inventory, what has been used in
supplies and pre paid insurance, we adjust it and
it becomes an expense
Demonstrate a basic understanding
of various investment options
• High Risk and Low risk
Calculate employer's payroll taxes
• Employers pay FICA taxes (social security,
Medicare)
• Employers pay unemployment taxes to the
state and to the federal govt.
• Employees pay federal taxes (income tax) and
FICA taxes
Understand how to use credit now
and in the future
• Future: student loans, mortgage loans, car
loans
• Now: credit card or a charge card
Understand how to create and
maintain the accounts receivable and
accounts payable
subsidiary ledgers (ch 9)
• Accounts receivable has a normal debit
balance
• So when cash is received, A/R will get credited
Understand how to calculate
deductions including Social
Security tax (ch 12 and 13)
Explain the purpose of the closing
process and journalize post-closing
entries (ch 8 )
• Supplies expense and insurance expense affect
the Income Summary and will affect the capital
account
• To close an account, we reduce it to a zero
balance
• Permanent accounts: real accounts (assets and
liability accounts)
• Temporary accounts are called nominal accounts
(revenue, expense and drawing accounts) Start
each year with a zero balance
Understand how to prepare payroll
reports (ch 12 and 13)
• Go through the PPT hand outs
Calculate employer's payroll taxes
(Ch 12 and 13)
• Study notes and PPT handouts
Create and maintain the accounts
payable subsidiary ledger; Post
information from the journal
(ch 9)
• Study notes and handouts
Understand how to prepare a postclosing trial balance (ch 8)
• After adjusting Supplies and Insurance
Expenses and closing all accounts, the postclosing trial balance is prepared
Understand the closing process
Ch 8
• Go through Notes and PPT handouts
Analyze the trial balance to determine
the necessary adjustments to prepare
financial
statements
Understand how to create and
maintain the accounts receivable
subsidiary ledger and an
account for credit card sales
Develop a working knowledge of
individual income tax procedures
and requirements
Understand the closing process
• Ch 8
Understand how to prepare payroll
reports
• Ch 12 and 13
Understand how to calculate net
pay
• Ch 12 and 13
Understand how to create and
maintain the accounts receivable
subsidiary ledger
Examine and describe the basic
types of insurance
•
•
•
•
Life Insurance
Health insurance
Liability
Auto