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Accounting training for non accountant

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Alok Kumar
Alok Kumar

The presentation sake to provide basic understanding on accounting equation and journal entry for those non accountants/professionals in microfinanace

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Accounting Training for Non-Accountant By: Alok Kumar aloksingh2@yahoo.com
Mr. X bought a bike worth of Le. 5,000,000 by taking a loan of Le. 3,000,000 and 2,000,000 of his own money to start OKADA business. Accounting Equation = + Le. 5,000,000 Le. 3,000,000 Le. 2,000,000 Asset Liability Equity = + = + - - -
VILLAGE BANK Chart of Accounts Asset Liability Equity Income Expenses
Village Bank Chart of Account and Thumb rule for accounting Asset Cash at Vault Cash at Link Bank Gross Fixed Asset Accured Depreciation Stock Loan Portfolio Other Asset Liabilities Savings Loan from RFF Differed Income Other Liabilities Equity Share Capital Donated Equity CY Donated Equity PY Retained Earning CY Retained Earning PY Income Interest on Loan Loan Processing Fee Registration Fee Penalty Bank Interest on Savings Income from WUMT Income from Stock Withdrawal Fee Other Income Expenses Salary BoD Allowance Motor Bike running Cost Generator Running Expenses Depreciation Other Expenses Other Non Operating Income Grant Income- Fixed Asset Grant Income OC Rule No 1: For any transaction at least two chart of accounts must be involved Rule No 2: Identify which chart of account and then identify which one is increasing or decreasing because of the transaction Rule No 3: Asset DrCr Expenses Liability/Equity Income
EXERCISE 1 Asset Cash at Link Bank Gross Fixed Asset Accrued Depreciation Stock Other Asset Liabilities Savings Loan from RFF Differed Income Other Liabilities Equity Share Capital Donated Equity CY Donated Equity PY Retained Earning CY Retained Earning PY Income Interest on Loan Loan Processing Fee Registration Fee Penalty Bank Interest on Savings Income from WUMT Income from Stock Withdrawal Fee Other Income Expenses Salary BoD Allowance Motor Bike running Cost Generator Running Expenses Depreciation Other Expenses Other Non Operating Income Grant Income- Fixed Asset Grant Income OC Village Bank disbursed loan amounting Le, 30,000,000 to Mr. X. Identify chart of account and which account is increasing and decreasing and accordingly record the transaction Loan Portfolio Cash at Vault CR Dr
EXERCISE 2 Asset Cash at Link Bank Gross Fixed Asset Accrued Depreciation Stock Other Asset Liabilities Savings Differed Income Other Liabilities Equity Share Capital Donated Equity CY Donated Equity PY Retained Earning CY Retained Earning PY Income Interest on Loan Loan Processing Fee Registration Fee Penalty Bank Interest on Savings Income from WUMT Income from Stock Withdrawal Fee Other Income Expenses Salary BoD Allowance Motor Bike running Cost Generator Running Expenses Depreciation Other Expenses Other Non Operating Income Grant Income- Fixed Asset Grant Income OC Village Bank took loan from NPCU amounting to Le, 100,000,000. Identify chart of account and which account is increasing and decreasing and accordingly record the transaction Loan Portfolio Cash at Vault Loan from RFF DR CR
EXERCISE 3 Asset Cash at Link Bank Gross Fixed Asset Accrued Depreciation Stock Other Asset Liabilities Savings Differed Income Other Liabilities Equity Share Capital Donated Equity CY Donated Equity PY Retained Earning CY Retained Earning PY Income Loan Processing Fee Registration Fee Penalty Bank Interest on Savings Income from WUMT Income from Stock Withdrawal Fee Other Income Expenses Salary BoD Allowance Motor Bike running Cost Generator Running Expenses Depreciation Other Expenses Other Non Operating Income Grant Income- Fixed Asset Grant Income OC Mr. X re paid the first loan installment which is 100,000 principal and 50,000 interest. Identify chart of account and which account is increasing and decreasing and accordingly record the transaction Loan Portfolio Cash at Vault Loan from RFF Interest on Loans DR CR CR
EXERCISE 4 Asset Cash at Link Bank Gross Fixed Asset Accrued Depreciation Stock Other Asset Liabilities Savings Differed Income Other Liabilities Equity Share Capital Donated Equity CY Donated Equity PY Retained Earning CY Retained Earning PY Income Loan Processing Fee Registration Fee Penalty Bank Interest on Savings Income from WUMT Income from Stock Withdrawal Fee Other Income Expenses Salary BoD Allowance Motor Bike running Cost Generator Running Expenses Depreciation Other Non Operating Income Grant Income- Fixed Asset Grant Income OC Village Bank repaid its first installment to NPCU amounting to Le. 32,000,000 of which principal is 30,000,000 and interest is 2,000,000. Identify chart of account and which account is increasing and decreasing and accordingly record the transactionLoan Portfolio Cash at Vault Loan from RFF Interest on Loans Other expenses CR DR Dr
EXERCISE FOR PARTICIPANTS Identify chart of account, which account is increasing and decreasing and accordingly record the transaction for the following questions 1. Mr. Kamara purchase shares from village bank of which, Le 30,000.00, as Share Capital, Le 5,000.00 for passbook and Le 2,000.00 for Registration. 2.Mr. Kamara makes a savings of Le 50,000.00. 3. Mr. Kamara increase his shares Capital by Le 20,000.00 and Purchase a loan form for Le 5,000.00 4. Mr. Kamara withdrew his savings of Le 50,000.00 and buy additional shares. 5. Village Bank transfer some of the money in the safe from the link bank amounting to Le 100,000.00. 6. Mr. Kamara received loan from Kandu Leppiama FSA amounting to Le 500,000.00. 7. Village Bank withdrew Le 50,000.00 from link bank for running cost. 8. Mr. Kamara repays his first installment of which Le 50,000.00 principal and Le 7,000.00 interest. 9. Village Bank received grant from NPCU for the salary of the Manager and Cashier amounting to Le 1,500,000.00. 10. Mr. Kamara pays his second installment in the link bank of which Le
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Accounting training for non accountant

  • 2. Mr. X bought a bike worth of Le. 5,000,000 by taking a loan of Le. 3,000,000 and 2,000,000 of his own money to start OKADA business. Accounting Equation = + Le. 5,000,000 Le. 3,000,000 Le. 2,000,000 Asset Liability Equity = + = + - - -
  • 3. VILLAGE BANK Chart of Accounts Asset Liability Equity Income Expenses
  • 4. Village Bank Chart of Account and Thumb rule for accounting Asset Cash at Vault Cash at Link Bank Gross Fixed Asset Accured Depreciation Stock Loan Portfolio Other Asset Liabilities Savings Loan from RFF Differed Income Other Liabilities Equity Share Capital Donated Equity CY Donated Equity PY Retained Earning CY Retained Earning PY Income Interest on Loan Loan Processing Fee Registration Fee Penalty Bank Interest on Savings Income from WUMT Income from Stock Withdrawal Fee Other Income Expenses Salary BoD Allowance Motor Bike running Cost Generator Running Expenses Depreciation Other Expenses Other Non Operating Income Grant Income- Fixed Asset Grant Income OC Rule No 1: For any transaction at least two chart of accounts must be involved Rule No 2: Identify which chart of account and then identify which one is increasing or decreasing because of the transaction Rule No 3: Asset DrCr Expenses Liability/Equity Income
  • 5. EXERCISE 1 Asset Cash at Link Bank Gross Fixed Asset Accrued Depreciation Stock Other Asset Liabilities Savings Loan from RFF Differed Income Other Liabilities Equity Share Capital Donated Equity CY Donated Equity PY Retained Earning CY Retained Earning PY Income Interest on Loan Loan Processing Fee Registration Fee Penalty Bank Interest on Savings Income from WUMT Income from Stock Withdrawal Fee Other Income Expenses Salary BoD Allowance Motor Bike running Cost Generator Running Expenses Depreciation Other Expenses Other Non Operating Income Grant Income- Fixed Asset Grant Income OC Village Bank disbursed loan amounting Le, 30,000,000 to Mr. X. Identify chart of account and which account is increasing and decreasing and accordingly record the transaction Loan Portfolio Cash at Vault CR Dr
  • 6. EXERCISE 2 Asset Cash at Link Bank Gross Fixed Asset Accrued Depreciation Stock Other Asset Liabilities Savings Differed Income Other Liabilities Equity Share Capital Donated Equity CY Donated Equity PY Retained Earning CY Retained Earning PY Income Interest on Loan Loan Processing Fee Registration Fee Penalty Bank Interest on Savings Income from WUMT Income from Stock Withdrawal Fee Other Income Expenses Salary BoD Allowance Motor Bike running Cost Generator Running Expenses Depreciation Other Expenses Other Non Operating Income Grant Income- Fixed Asset Grant Income OC Village Bank took loan from NPCU amounting to Le, 100,000,000. Identify chart of account and which account is increasing and decreasing and accordingly record the transaction Loan Portfolio Cash at Vault Loan from RFF DR CR
  • 7. EXERCISE 3 Asset Cash at Link Bank Gross Fixed Asset Accrued Depreciation Stock Other Asset Liabilities Savings Differed Income Other Liabilities Equity Share Capital Donated Equity CY Donated Equity PY Retained Earning CY Retained Earning PY Income Loan Processing Fee Registration Fee Penalty Bank Interest on Savings Income from WUMT Income from Stock Withdrawal Fee Other Income Expenses Salary BoD Allowance Motor Bike running Cost Generator Running Expenses Depreciation Other Expenses Other Non Operating Income Grant Income- Fixed Asset Grant Income OC Mr. X re paid the first loan installment which is 100,000 principal and 50,000 interest. Identify chart of account and which account is increasing and decreasing and accordingly record the transaction Loan Portfolio Cash at Vault Loan from RFF Interest on Loans DR CR CR
  • 8. EXERCISE 4 Asset Cash at Link Bank Gross Fixed Asset Accrued Depreciation Stock Other Asset Liabilities Savings Differed Income Other Liabilities Equity Share Capital Donated Equity CY Donated Equity PY Retained Earning CY Retained Earning PY Income Loan Processing Fee Registration Fee Penalty Bank Interest on Savings Income from WUMT Income from Stock Withdrawal Fee Other Income Expenses Salary BoD Allowance Motor Bike running Cost Generator Running Expenses Depreciation Other Non Operating Income Grant Income- Fixed Asset Grant Income OC Village Bank repaid its first installment to NPCU amounting to Le. 32,000,000 of which principal is 30,000,000 and interest is 2,000,000. Identify chart of account and which account is increasing and decreasing and accordingly record the transactionLoan Portfolio Cash at Vault Loan from RFF Interest on Loans Other expenses CR DR Dr
  • 9. EXERCISE FOR PARTICIPANTS Identify chart of account, which account is increasing and decreasing and accordingly record the transaction for the following questions 1. Mr. Kamara purchase shares from village bank of which, Le 30,000.00, as Share Capital, Le 5,000.00 for passbook and Le 2,000.00 for Registration. 2.Mr. Kamara makes a savings of Le 50,000.00. 3. Mr. Kamara increase his shares Capital by Le 20,000.00 and Purchase a loan form for Le 5,000.00 4. Mr. Kamara withdrew his savings of Le 50,000.00 and buy additional shares. 5. Village Bank transfer some of the money in the safe from the link bank amounting to Le 100,000.00. 6. Mr. Kamara received loan from Kandu Leppiama FSA amounting to Le 500,000.00. 7. Village Bank withdrew Le 50,000.00 from link bank for running cost. 8. Mr. Kamara repays his first installment of which Le 50,000.00 principal and Le 7,000.00 interest. 9. Village Bank received grant from NPCU for the salary of the Manager and Cashier amounting to Le 1,500,000.00. 10. Mr. Kamara pays his second installment in the link bank of which Le