JAYE'S BOOKKEEPING TIPS #11

Okay, it's the end of the month and you have all of your records posted to date. You have probably figured out by now that there are just so many columns in a CDR....




so use the last two for miscellaneous, next to last for explanation and last for amount. Keep your columns to a 13 columnar pad. Enter your most common income and expenses as your headings.

Your CDR is current and you have totaled all the columns for the month. Your first columns are your cash account so you have both a debit balance (deposits) and a credit balance (checks written). You have made a credit entry in every Income account and a debit entry in every expense account. Add them up, putting them on the calculator as either a debit entry (+) or a credit entry (-). Your total should be zero. If it is, great; your book is in balance. If it is not, then you have a boo boo somewhere and will have to find it before continuing on. If the difference can be divided by nine evenly, you have transposed some numbers somewhere. For example, you may have written a check for $9.29, but in the expense account you entered $9.92. If it can be divided evenly by 2, you have switched a debit for a credit or vice versa. Look at the number; does it match an entry? That may help you find it. Your total has to always be zero in double entry bookkeeping.

Once you have the CDR correct and have made any JE's you need (like adjust your Inventory) or breakdown the miscellaneous entries you made in the column where you listed fixed assets or other accounts, you need to make your entries to your General Ledger. Remember, you have a page for every account!!

Enter each column and each entry in a JE on the General Ledger (GL) page; these pages have a debit, credit and balance column, so be sure to put the numbers in the right column. Give your entry an explanation, i.e. CDR 1000 (October 2000), JE #1 or #2.
Use the last date of the month for each entry. The Cash in Bank account will need only the actual balance in the bank; you don't have to list both the debits and credits. Got it?
Be sure to check off your entries. Remember the orange juice.

Be sure each page has a total in the balance column. Put the credit balances in brackets or use a red pen for these entries. This is the only time you will use red ink!! That way every time you see a red entry, you'll know it is a credit balance. Add all the pages up, same as you did for the CDR. You should have the same total - zero!!

Congratulations!! You did it!! You have the paperwork done. Great feeling isn't it??

Now get ready to start the next month; no, it never ends.

Jaye
jaye@strateshooter.com