Happy Accountant: Accounting Blog & Online Accountant

* Carriage is the cost of transporting goods from the supplier to the business which has purchased them.  Sometimes the supplier pays and sometimes the buyer pays. If the supplier pays, the cost to the supplier is called “carriage outwards” and if the buyer pays, the cost to the buyer is called “carriage inwards”. Carriage [read more]

*The cost of goods sold is calculated as follows:                                                                                                        £  Opening stock value                                                                  X Add cost of purchases (or production, if manufacturing)    X Less closing stock value                                                         (X) Equals cost of goods sold                                                         X  That is, to match sales and the cost of goods sold, you need to adjust the cost of goods sold, [read more]

*Goods may be unsold at the end of an accounting period and therefore, still be in stock.  The purchase cost of these goods should therefore NOT be included in the cost of sales of the period. For example, suppose Widgets & Co (who have no stock at the start of the year) purchase 40,000 widgets for [read more]

*I’ve recently been in the position of choosing accounting software, so this has been forefront of my mind.  This is a (by no means exhaustive) list of things to consider (in no particular order). price functionality ease of use/user friendliness accounting knowledge upgradeability upgrade cost ongoing support costs flexibility does it meet your legal obligations [read more]

*The whole point of using accounting software is to make your life easier by saving you time and money.  Therefore, if it doesn’t and you can meet your legal requirements without it, you should question whether it’s worth the effort. It should save you time because: the whole process of bookkeeping should be faster (although setting [read more]

*In doing a journal, it is important that it is cross referenced properly so that later, if you or your accountant needs to, you can follow the original “logic” for having done the journal.  Accountants refer to this as being able to follow the audit trail.  This applies whether or not you actually have your [read more]

*A journal is usually used to correct errors that have been made.  The errors must be able to be corrected by means of a double entry, to be able to put it right by journalling. So, if £500 of sales of square widgets had been incorrectly posted to sales of round widgets, the correcting journal [read more]