How do i post this journal in my accounts

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Michael

Guest
In a fast food business where i receive cash, my takings for one week was say 6k, out of that i pay wages of 2.5k how do i record this in my accounts. (just new to doing my own accounts and using tas books)
I as such would not have a customer account.
Do i post 3.5k into cash receipts/sales, and how can i do a journal to increase my sales the other 2.5k and post to my net wage account.
Also what are debit and credit journal.
Does sole trader mean the only owner of the business.
When setting up accounts after getting set of accounts from my acountant up to 31/12/03, do i start with my dates 31/12/03 or 01/01/04 (when entering accounts from scratch) Many thanks
 
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rainyday

Guest
I'm no accountant, but if you have 6k of sales, than you have to record 6k of sales. The fact that you give some of it back out in cash wages is irrelevant.

Wouldn't it be easier/safer to pay your staff by cheque or bank transfer?
 
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Michael

Guest
Rainday,
My lodgement to the bank would be 3.5k, not 6k a difference of 2.5k (wages), therefore not giving correct figure of 6k to sales.
 
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rainyday

Guest
Yep - I'm aware of that - so you'll need to show cash coming out for payroll. If your accounts package lets you set up multiple accounts, set up a new account called 'my back pocket'. Show 6k going into your back pocket, 3.5k being transferred out to the bank, and 2.5k being paid out in wages.
 
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zag

Guest
Michael,

This is reasonably straight forward, so if you are stumped at this stage you need to consider going on a course or having someone look over your accounts every so often to ensure you are doing things correctly.

As Rainy and yourself said, you need to to recognise the 6K sales, regardless of what happened to the cash.

Debit bank €6K
Credit sales €6K
I'm ignoring the VAT element for these purposes, but you can't afford to ignore it, unless take-away food sales are VAT exempt, which they might well be.

This shows that you had €6K in cash sales. The fact that some of it never made it to your actual bank account isn't relevant for the moment.

You now need to recognise that you paid wages of €2.5K
Debit wages €2.5K
Credit bank €2.5K
Ta da . . .

You could of course combine these transactions as follows
Debit bank €3.5K
Debit wages €2.5K
Credit sales €6K
Same net effect.

z
 
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oilean

Guest
Your accounts package should have a CASH account

If not set up another bank account and call it CASH

All cash takings are entered in this account
All cash expenditure is also entered into this account

From you amounts

cr sales 6,000
dr cash a/c 6,000

dr bank 3,500
cr cash a/c 3,500

dr wages a/c 2,500
cr cash a/c 2,500

You definetly should get your accountant to set out some standard journals for you

I used to give training on Sage Line 50, in the UK, for the firm I worked for and found setting out on paper a set of commonly used journals very easy to use (and understand) for clients

If not they will spend more of heir time at year end tidying up than anything else
 
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Michael

Guest
Thanks for replies. I haven't yet started accounts properly, but wondering Oilean would this match my statement when doing bank rec. as it would be journals I would be posting rather than through bank
 

Brendan Burgess

Founder
Messages
40,231
Hi Michael
I don't want to appear unhelpful, but Askaboutmoney is not the proper forum for learning how to do basic double entry. You really do need to go on a course or your books will be meaningless.

If you have a good general undersanding of accounts, then you could ask a specific question about a tricky area, e.g. calculation of depreciation or the like.

I agree with Zag's suggestion that you do a course.
 
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temptedd

Guest
Double entry is basic if you are an acocuntant, Brendan! I don't see any harm in asking these sorts of questions.

Of course I completely agree that when one's knowledge is limited, the advice of professional is important. But sometimes it is quite difficult to speak with a professional about these matters unless you have some basic knowledge. Where better than AAM to get/clarify your basic knowledge?

tedd
 
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Tommy

Guest
Brendan and Zag recommended that Michael do a course in book-keeping. They didn't recommend that he seek professional advice. I agree with their recommendation. It would be pointless (and uneconomic) getting professional advice on bookkeeping unless one had a reasonable basic understanding of double entry and other accounting concepts. The subject is simply too wide to gain this understanding piecemeal on AAM or similar sites. The quickest and easiest way to educate oneself in such matters is to do a course on the subject.
 
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temptedd

Guest
You definetly(sic) should get your accountant to set out some standard journals for you
This is what I referred to when agreeing that professional advice is sometimes useful. Of course, as always, you have to choose your professional with care.
 
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