flagship course

Bookkeeping and Accounting for Small Businesses

Record transactions, reconcile bank and cash, prepare basic statements and meet tax and audit needs for a small business, with entries that balance and evidence that is kept.

about this course

What you will be able to do

L4 Practitioner8 modules · 43 h lessons plus practice

Record transactions, reconcile bank and cash, prepare basic statements and meet tax and audit needs for a small business, with entries that balance and evidence that is kept.

Define assets, liabilities, equity, income and expense.
Apply double entry to everyday transactions.
Analyse a trial balance and find errors.
Evaluate controls, tax obligations and risks of fraud.
Create monthly statements and a filing calendar.

Task, condition and standard

Task

Keep the books of a small business for one month, reconcile the bank, and produce a trial balance, profit and loss and balance sheet.

Condition

About 10 weeks part-time. A spreadsheet or free accounting tool, 40 sample invoices and receipts, a bank statement, a mentor.

Standard

Every entry has a source document and balances, the bank reconciles to zero difference, and the balance sheet agrees with the trial balance.

Who it is for: Bookkeepers, shop owners, commerce students, office assistants. Requirements: Basic arithmetic. Materials: lesson text, templates, rubric, check with answers.

lesson by lesson

8 modules with worked examples

Module 1 Accounts and the equation 4 hDefine

State the equation: assets equal liabilities plus equity.
Group accounts into assets, liabilities, equity, income and expense.
Debit increases assets and expenses; credit increases liabilities, equity and income.
Build a chart of accounts with codes, for example 1000 for assets and 4000 for income.

Worked example. A trader starts with Rs 1,00,000 cash from the owner and buys stock for Rs 40,000 in cash. Cash is Rs 60,000, stock Rs 40,000, equity Rs 1,00,000. Both sides total Rs 1,00,000.

Activity. Build a chart of 25 accounts for a shop.

Standard to meet. Chart covers all five groups and each account has a code.

Module 2 Record source documents 5 hApply

Collect invoices, bills, receipts, bank entries and cash vouchers for every transaction.
Check each bill for date, name, amount, tax number and tax amount.
Number and file documents in date order, paper or scanned.
Keep records for the years the law requires.

Worked example. A purchase bill for Rs 11,800 shows Rs 10,000 goods plus Rs 1,800 tax at 18 percent. A bill without a tax number is flagged and the supplier is asked for a corrected copy.

Activity. Sort and check 40 documents, flagging the faulty ones.

Standard to meet. Number all documents and record every fault.

Module 3 Journal entries 6 hApply

Write the date, accounts, debit, credit, amount and a short narration.
Record a cash sale: debit cash, credit sales.
Record a credit purchase: debit purchases and input tax, credit supplier.
Record the payment of expenses such as rent and wages with evidence.

Worked example. Sale Rs 5,000 cash: debit cash Rs 5,000, credit sales Rs 5,000. Rent paid Rs 8,000: debit rent Rs 8,000, credit bank Rs 8,000.

Activity. Record 30 entries from the documents.

Standard to meet. Check that total debits equal total credits in every entry.

Module 4 Ledger and trial balance 6 hAnalyse

Post each entry to its ledger account and find the balance of each account.
List all balances in a trial balance with debit and credit columns.
If the totals differ, check the difference for a missing posting or a flipped entry.
Divide the difference by nine to see if two digits were swapped.

Worked example. Trial balance debits Rs 4,38,200 and credits Rs 4,38,020. Difference Rs 180 is divisible by nine, so a swap such as 240 posted as 420 on the debit side is found in the wages account.

Activity. Prepare a trial balance and trace one planted error.

Standard to meet. Check that totals agree, and correct the error with a dated entry.

Module 5 Bank and cash reconciliation 5 hAnalyse

Match each bank line to the cash book entry.
List cheques issued but not cleared and deposits not yet credited.
Record bank charges and interest found only in the statement.
Count physical cash and compare with the book balance.

Worked example. Cash book Rs 92,400 less charges Rs 300 gives Rs 92,100. Bank statement Rs 97,600 less unpresented cheques Rs 7,500 plus deposits in transit Rs 2,000 also gives Rs 92,100, so they match.

Activity. Reconcile a month of bank entries.

Standard to meet. Show that the difference after adjustments is zero.

Module 6 Profit and loss and balance sheet 6 hCreate

List income, then cost of goods sold, then expenses to reach net profit.
Adjust for closing stock, prepaid and accrued expenses and depreciation.
List assets and liabilities in order of liquidity on the balance sheet.
Check that assets equal liabilities plus equity including profit.

Worked example. Sales Rs 6,40,000 less cost of goods Rs 4,10,000 gives gross profit Rs 2,30,000. Expenses Rs 1,45,000 leave net profit Rs 85,000, which is added to equity.

Activity. Produce statements for the month.

Standard to meet. Show that net profit flows to equity and that the balance sheet balances.

Module 7 Tax, payroll and controls 6 hEvaluate

Calculate tax collected on sales less tax paid on purchases to find the payable amount.
Deduct tax at source from payments where the law requires and pay it by the due date.
Set controls: two people for cash, approvals for payments, monthly reconciliation.
Keep a calendar of filing dates and avoid late fees.

Worked example. Output tax Rs 54,000, input tax Rs 38,500, so Rs 15,500 is payable by the due date. A late fee for each day of delay is avoided by filing on time (check the current fee and due dates with the tax authority).

Activity. Prepare a tax computation and a filing calendar.

Standard to meet. Check that the computation agrees with the books, and list each due date in the calendar.

Module 8 Capstone: a month of books 5 hCreate

Record all transactions of the month from documents.
Reconcile the bank and count the cash.
Produce the trial balance and statements.
Present findings, errors found and fixes to a mentor.

Worked example. A small shop with 120 transactions, sales Rs 6,40,000 and net profit Rs 85,000, with a reconciled bank.

Activity. Present the month pack.

Standard to meet. Check that entries balance, the bank ties out and statements agree.

assessment

How you are checked

Evidence: the work product from each module, kept in one folder with dates. A mentor and two peers mark it with this rubric. Pass: no criterion at 'Not yet'.

Marking rubric
Criterion	Not yet	Meets	Exceeds
Accuracy	Missing or unclear	Meets the stated check	Entries balance and statements agree
Controls	Guessing	Evidence kept	Reconciled monthly with approvals
Records	Gaps	Complete	Complete and reviewed by a peer
Safety and ethics	Overlooked	Followed	Followed and taught to others

Ten-question check, with model answers

Q1. State the accounting equation.

Model answer: Assets equal liabilities plus equity. (Covered in module 1: Accounts and the equation. To pass that module: Chart covers all five groups and each account has a code.)

Q2. Why must each entry have a document?

Model answer: It proves the transaction for audit and tax. (Covered in module 2: Record source documents. To pass that module: Number all documents and record every fault.)

Q3. What is a narration?

Model answer: A short note explaining the entry. (Covered in module 3: Journal entries. To pass that module: Check that total debits equal total credits in every entry.)

Q4. What does a trial balance prove?

Model answer: That total debits equal total credits. (Covered in module 4: Ledger and trial balance. To pass that module: Check that totals agree, and correct the error with a dated entry.)

Q5. Why do cash book and bank balance differ?

Model answer: Timing items, charges and sometimes errors. (Covered in module 5: Bank and cash reconciliation. To pass that module: Show that the difference after adjustments is zero.)

Q6. What is gross profit?

Model answer: Sales minus the cost of goods sold. (Covered in module 6: Profit and loss and balance sheet. To pass that module: Show that net profit flows to equity and that the balance sheet balances.)

Q7. What is a control?

Model answer: A step that prevents or catches errors and fraud. (Covered in module 7: Tax, payroll and controls. To pass that module: Check that the computation agrees with the books, and list each due date in the calendar.)

Q8. What shows the books are reliable?

Model answer: Documents, balanced entries and a reconciled bank. (Covered in module 8: Capstone: a month of books. To pass that module: Check that entries balance, the bank ties out and statements agree.)

Q9. Why keep cash and bank separate?

Model answer: Each has its own balance that must be reconciled. (Covered in: Task, condition and standard, near the top of this page.)

Q10. What is depreciation?

Model answer: Spreading the cost of an asset over its useful life. (Covered in: Task, condition and standard, near the top of this page.)

seven levels

Your ladder, L1 to L7

This course sits at L4 Practitioner. Each level adds to the one below.

L1 Basic. Know the accounting equation.
L2 Awareness. Record entries from documents.
L3 Foundation. Keep books for a small shop.
L4 Practitioner. Prepare statements and tax computations.
L5 Specialist. Lead accounts for a growing business.
L6 Advanced. Design accounting systems and train teams.
L7 Super expert. Set standards for small business accounting and audit.

Slide by slide

Seven slides, one per level. Open each for the slide text and the speaker notes.

Slide 1 L1 Basic: The accounting equation

State the accounting equation and apply it correctly to 5 sample transactions.

Speaker notes. Teacher gives five transactions to place. Covered in module 1.

Slide 2 L2 Awareness: Record from documents

Record 15 entries from source documents with no wrong account.

Speaker notes. Teacher marks the entries against an answer key. Covered in module 3.

Slide 3 L3 Foundation: Books for a small shop

Keep a month of books for a small shop and reach a trial balance that agrees.

Speaker notes. Teacher checks that debits equal credits. Covered in module 8, Capstone: a month of books.

Slide 4 L4 Practitioner: Statements and tax sums

Prepare a profit and loss account and balance sheet, plus a simple tax sum with a stated rate.

Speaker notes. Teacher checks the statements agree to the ledger. Covered in module 6. Check local rules with an expert for tax.

Slide 5 L5 Specialist: Lead accounts

Lead accounts for a growing business with a bank reconciliation done monthly and differences under 1 percent.

Speaker notes. Teacher reviews the reconciliation for open items.

Slide 6 L6 Advanced: Design accounting systems

Design an accounting system with a chart of accounts of 30 lines and 5 controls, and train 3 staff.

Speaker notes. Teacher tests a control with a sample error.

Slide 7 L7 Super expert: Set audit standards

Set standards for small business accounting and audit, with a 10-point checklist applied to 2 files.

Speaker notes. Teacher reviews the findings on two sample files.

jobs this leads to

Where this takes you

Bookkeeper
Accounts assistant
Accounts executive
Payroll clerk
Tax assistant

ten locations and global

Your place

Local rules change licences, data handling, pricing words and names of bodies. Check them for your place before you act.

India (Bengaluru)

Language: English, Hindi, Kannada. Currency: INR. Data rule for what you publish: Digital Personal Data Protection Act 2023. Skills frame to cite: National Skills Qualifications Framework (NSQF) and the national credit framework.

Netherlands (Eindhoven area)

Language: Dutch, English. Currency: EUR. Data rule for what you publish: EU GDPR (Dutch: AVG), supervised by the Autoriteit Persoonsgegevens. Skills frame to cite: the Dutch qualification framework (NLQF) linked to the European Qualifications Framework.

UAE (Dubai and Abu Dhabi)

Language: Arabic, English. Currency: AED. Data rule for what you publish: Federal Decree-Law No. 45 of 2021 (personal data protection). Skills frame to cite: the emirate education and training regulators (for example KHDA in Dubai) and the national qualifications framework.

Brazil (Sao Paulo)

Language: Portuguese (Spanish and English support). Currency: BRL. Data rule for what you publish: LGPD (Lei Geral de Protecao de Dados). Skills frame to cite: the national technical-education catalogue and the national S-system training bodies.

Canada (Toronto)

Language: English, French. Currency: CAD. Data rule for what you publish: PIPEDA, with provincial rules where they apply. Skills frame to cite: the provincial colleges framework and the national credential-recognition guidance.

United States

Language: English, Spanish. Currency: USD. Data rule for what you publish: state privacy laws (for example California), and COPPA for children under 13. Skills frame to cite: state and community-college credit systems.

Singapore

Language: English, Mandarin, Malay, Tamil. Currency: SGD. Data rule for what you publish: Personal Data Protection Act (PDPA). Skills frame to cite: the Singapore national skills frameworks and the national credit system.

Australia

Language: English. Currency: AUD. Data rule for what you publish: the Privacy Act 1988 and the Australian Privacy Principles. Skills frame to cite: the Australian Qualifications Framework (AQF) levels.

Hong Kong (Eastern Asia)

Language: Chinese (Cantonese, Mandarin), English. Currency: HKD. Data rule for what you publish: the Personal Data (Privacy) Ordinance. Skills frame to cite: the Hong Kong Qualifications Framework.

Georgia and Israel (Western Asia)

Language: Georgian, Hebrew, Arabic, English. Currency: GEL or ILS. Data rule for what you publish: the personal data law of the country where the learner lives. Skills frame to cite: the national qualifications framework of that country.

Cayman Islands (Caribbean)

Language: English. Currency: KYD. Data rule for what you publish: the Data Protection Act. Skills frame to cite: the local education and training framework.

Mexico

Language: Spanish, English. Currency: MXN. Data rule for what you publish: the federal law on personal data held by private parties. Skills frame to cite: the national competency certification system and the education ministry levels.

Draft

Draft flagship. Own wording. Not live.

All rupee amounts in the worked examples are rounded estimates for practice, not quotes or advice. Prices, tariffs and taxes change by place and over time: check current local figures before you use them.