All the Best for Your Papers Tomorrow!

Thank you all who came for the crash course for such a wonderful time the last three days. You guys are amazing to have sat through a grueling 15 hours of intensive revision. Hope the Physics paper today was forgiving.

Some final pointers before your POA Paper tomorrow:

1. Revise your theory questions. They weigh 33-42% of the grades. Use the notes given to you all on the Frequently Asked Questions Theory Questions and Common Mistakes Made by Students.

2. Key topics for Revision (besides Trading, Profit and Loss):

– Capital and Current Accounts
– Balance Day Adjustments
– Bank Reconciliation & Updating of Cash Book
– Correction of Errors and Errors not Revealed by Trial Balance
– Control Accounts
– Fixed Assets, Depreciation and Provision for Depreciation and Disposal
– Bad Debts, Doubtful Debts and Provision for Doubtful Debts
– Analysis and Interpretation of Final Accounts

3. Sleep early. Because POA is a conceptual subject. You’d need a clear head and a cool heart to deal with the intensity in that 3.5 hours.

To Your Academic Success,

Signature Caleb

4 Notable Quotes On the Value of Accounting Knowledge from the World’s Richest and Influential People

Warren_Buffett_KU_Visit

 

 

 

 

 

 

 

 

 

 

Image by Mark Hirschey (Work of Mark Hirschey) [CC-BY-SA-2.0], via Wikimedia Commons
 

“You have to understand accounting and you have to understand the nuances of accounting. It’s the language of business and it’s an imperfect language, but unless you are willing to put in the effort to learn accounting – how to read and interpret financial statements – you really shouldn’t select stocks yourself”Warren Buffett

Warren Edward Buffett (born August 30, 1930) is an American investor, industrialist and philanthropist. He is widely regarded as one of the most successful investors in the world. Often called the “legendary investor Warren Buffett” he is the primary shareholder, chairman and CEO of Berkshire Hathaway. He is consistently ranked among the world’s wealthiest people, he was ranked as the world’s second wealthiest person in 2009 and is currently the third wealthiest person in the world as of 2010.

charlie munger on accounting

Image by Nick J Webb

“You have to know accounting. It’s the language of practical business life. It was a very useful thing to deliver to civilization. I’ve heard it came to civilization through Venice which of course was once the great commercial power in the Mediterranean. However, double entry bookkeeping was a hell of an invention.” Charlie Munger

Charles Thomas Munger (born January 1, 1924 in Omaha, Nebraska) is an investment manager and philanthropist. He is Vice-Chairman of Berkshire Hathaway Corporation, the diversified investment corporation chaired by Warren Buffett. Munger is also the chairman of Wesco Financial Corporation, based in Pasadena, California. (Source: Wikipedia)

Alan_Greenspan_on accounting

Image: Alan Greenspan Source: Bureau of Engraving and Imprinting.

“It has been my experience that competency in mathematics, both in numerical manipulations and in understanding its conceptual foundations (accounting), enhances a person’s ability to handle the more ambiguous and qualitative relationships that dominate our day-to-day financial decision-making” Alan Greenspan (parenthesis mine)

Alan Greenspan (born March 6, 1926) is an American economist who served as Chairman of the Federal Reserve of the United States from 1987 to 2006. He currently works as a private advisor and provides consulting for firms through his company, Greenspan Associates LLC. First appointed Federal Reserve chairman by President Ronald Reagan in August 1987, he was reappointed at successive four-year intervals until retiring on January 31, 2006 after the second-longest tenure in the position. (Source: Wikipedia)

robert_kiyosaki

“The only way to get out of the “Rat Race” is to prove your proficiency at both accounting and investing, arguably two of the most difficult subjects to master.”

“I have mentioned before that financial intelligence is a synergy of accounting, investing, marketing and law. Combine those four technical skills and making money with money is easier.” Robert Kiyosaki

Robert Toru Kiyosaki (born April 8, 1947) is an American investor, businessman, self-help author and motivational speaker. Kiyosaki is best known for his Rich Dad Poor Dad series of motivational books and other material published under the Rich Dad brand. He has written 15 books which have combined sales of over 26 million copies. Three of his books, Rich Dad Poor Dad, Rich Dad’s CASHFLOW Quadrant, and Rich Dad’s Guide to Investing, have been on the top 10 best-seller lists simultaneously on The Wall Street Journal, USA Today and the New York Times. Rich Kid Smart Kid was published in 2001, with the intent to help parents teach their children financial concepts. He has created three “Cashflow” board and software games for adults and children and has a series of “Rich Dad” audio cassettes and disks. (Source: Wikipedia)

READ MORE:

5 Reasons Why Principles Of Accounts

Really Useful Schooling by Adrian Tan, Author of The Teenage Textbook

Suggested Solutions & Answers to Oct 2010 GCE ‘N’ Level Principles of Accounts

The rough solutions and answers for this morning’s GCE N’ Level Principles of Accounts (Syllabus 7091/02) is out. Please click here to download the pdf file.

All the best, students! POA is the last paper for most of you. O’ Level Students, you’re next. =)

12 Uber-Cool Vintage Accounting & Business Documents

Think accounting records are boring? Written diligently, these 12 uber-cool accounting/business documents provides rich insights to the bookkeeper/accountant’s era.

From an elegantly drawn chicken to a receipt for buying 57 leeches, accounting records contains rich history found nowhere else. There could be fun doing accounting, conservatively speaking. 😉

Title-less book by Thomas Tye (1712-1783)

Thomas Tye's Account book starts in 1737

Thomas Tye (1712-1783) came to London from Derbyshire in 1738 to “seek his fortune”.He was in business, mostly in the City of London and he recorded all expenditure with great care. He also recorded tit bits of news and information. Some of this is fascinating.

His nephew’s wife blogs about this find here.

Donald Paterson’s Journal, January 1835

Donald Peterson 1821 24

Wonderful handwriting! This document appears to be business ledgers and accounts for a firm in London, England but there is nothing to identify the business or the owner. Within these ledgers are workbooks dating from 1821-24 on business, mathematics, etc. and the name Donald Paterson is doodled on these quite a bit.

Larger image here

Source: snap-happy1

Bookkeeper and Accountant Advertisement 1954

Advertisement for Accountant

From Popular Mechanics magazine, October 1954

Source: jackieinmi

George Watt Store Mann Street Gosford, 1885

George Watt Store Mann Street Gosford 1885

The only known surviving photograph from a series taken by Charles Bayliss in 1884/85. The series was commissioned by Boyd and King, for their Gosford Model Farms subdivision prospectus. Fortunately many photographs were reproduced in the prospectus in the form of lithographs, and these survive today. This is a close-up of a larger image. It is one of the earliest surviving images of life in Gosford NSW.

Gosford Coupons

Gosford coupons

Gosford Coupon

Gosford Coupons from a full, unredeemed booklet found in the former Martin family house at Matcham, NSW.

Source: gostalgia

Cash Cheque 1972

cheque 1972

This would be the 1972 equivalent of getting 20 from the ATM. The check was cashed at Studewood Grocery Store which is now part of the Fiesta chain.   Here’s where the bank was located. There is a Chase bank there now, but it’s not the same building.
Source: pmcd9

Unusual Invoice Selling ‘57 Choice Leeches’

1870 57 choice leeches

An unusual Victorian illustrated invoice from Fitch & Nottingham, 16 & 17 St. Peter Street, Hackney Road, London NE. ’57 Choice Leeches’ sold to Swindon businessman Mr John Green, May 12th 1870.

Source: Swindon Collection, Central Library : Scan of original invoice from their ephemera collection. Date: 12/5/1870. Repository: Swindon Collection, Central Library.

Canning & Co’s General Journal, 1928

Canning and Company itemised account Gosford 1928

Canning & Co. Receipt

Canning and Company receipt

Murphy’s Holiday Cottages Receipt, 1939

Murphy holiday cottages receipt 1939

Image a week’s stay at a hotel for just $5.10! See what inflation has done to us!

Source: gostalgia

Motimers Pte Ltd – Store Interior

Mortimers store

Motimers’ Receipt

Mortimers store docket

1918 Liberty Weekly Income Record and Income Tax Record

1918 Liberty Weekly Income Record and Income Tax Record 02

1918 Liberty Weekly Income Record and Income Tax Record ~ ‘The Proper Book of Records of Your Business’. The book’s titled page is dated 1918 & pages follow bookkeeping records from January 1918 through May 1923.

The handwriting is in blue, black & red fountain pen & is clear & neat with very few mark-outs. Some ink-ie splotches where the fountain pen blooped but, all in all, a very neat Bookkeeper of Record.

Source: Le Petit Poulailler

Vintage Ledger Paper

vintage ledger paper

A simple, high resolution artwork from autumnsensation. Free for download and use. See source.

Source: autumnsensation

Counting Chickens

Self-expression of a bored accountant? This artwork done with spray paint/ gouache on antique ledger page (about chickens)

Source: Amy Rice

INTERNATIONAL STANDARDS – ACCOUNTING TERMINOLOGY

The terminology for accounting varies across different levels of study. Those of you who have moved on to study accounting at tertiary level would agree – terms like debtors and creditors have a different meaning in ICCI, CAT, ACCA and other accounting diploma/degree programs.

The term Debtors used for O’/N’ Level, for example, becomes Accounts Receiveable at the diploma/degree level. The following table lists the difference between the international usage of accounting terms against that which is used and accepted by The University of Cambridge International Exams (CIE).

Please note: GCE O’/N’ Level candidates will not be penalised for using different terms.

International usage Current CIE/UK usage
Balance sheet Balance sheet
Bank (and other) loans/ Interest bearinq loans and borrowinq Loans repayable after 12 months
Bank overdrafts and loans/ Interest bearinq loans and borrowinq Loans repayable within 12 months
Capital or Equity/

Shareholders’ Equity

Capital
Cash (and cash equivalents) Bank and cash
Cost of Sales Cost of qoods sold
Current assets Current assets
Current liabilities Current liabilities. Creditors: amounts due within 12 months
Finance costs Interest payable
Finance Income/Investment revenues Interest receivable
Financial Statements Final accounts
Gross profit Gross profit
Income statement Tradinq and Profit & Loss account
Intanqible assets Goodwill etc.
Inventory/ Inventories(of raw materials and finished qoods) Stock
Investment property Investments
Non-current assets Fixed assets
Non-current liabilities Long term liabilities. Creditors: amounts falling due after more than one year
pdf
The University of Cambridge International Exams (CIE) released an information brochure on this which is available for download here. [page 19]
A condensed version on the same is available here.

Dump the Monetary Concept – Measure What Makes Life Worthwhile!

“Not everything that can be counted counts, and not everything that counts can be counted.” Albert Einstein, physicist (1879 – 1955)

The principle of monetary concept states that anything which cannot be measured in monetary
terms will not be considered as a part of the accounting data. While accounting captures the numerical performance of a business, many will agree that numbers tell only the part of a business’ story.

Work culture, morale and happiness of workers, teamwork and job satisfaction all play a part in make a business successful.

In this TED Talk, Chip Conley shares on Measuring What Makes Life Worthwhile, some of points Chip covered includes:

– 94% of the business owners believes that the intangible things are important ( things like intellectual property, corporate culture and brand loyalty).

– Only 5% of these leaders have a means to measure these intangibles in the business.

– An alternative definition of success introduced by the King of Bhutan: The Gross Happiness Index. (GHI)

– The science behind the art: the metrics of the GHI.

Enjoy!

[VIDEO LENGTH: 17:40 MINS]

About Chip Conley (from TED.com)

Chip Conley In 1987, at the age of 26 and seeking a little “joy of life,” Chip Conley founded Joie de Vivre Hospitality by transforming a small motel in San Francisco’s seedy Tenderloin district into the now-legendary Phoenix.

Today, Joie de Vivre operates nearly 40 unique hotels across California, each built on an innovative design formula that inspires guests to experience an “identity refreshment” during their visits.

During the dotcom bust in 2001, Conley found himself in the self-help section of the bookstore, where he became reacquainted with one of the most famous theories of human behavior — Maslow’s hierarchy of needs, which separates human desires into five ascending levels, from base needs such as eating to the highest goal of self-actualization, characterized by the full realization and achievement of one’s potential. Influenced by Maslow’s pyramid, Conley revamped his business model to focus on the intangible, higher needs of his company’s three main constituencies — employees, customers and investors. He credits this shift for helping Joie de Vivre triple its annual revenues between 2001 and 2008.

Conley has written three books, including his most recent, PEAK: How Great Companies Get Their Mojo from Maslow, and is at work on two new ones, Emotional Equations and PEAK Leadership. He consults widely on transformative enterprises, corporate social responsibility and creative business development. He traveled to Bhutan last year to study its Gross National Happiness index, the country’s unique method of measuring success and its citizens’ quality of life.

National Accounting Quiz 2010

Ngee Ann LogoThe National Accounting Quiz (NAQ) 2010 is the biggest annual accounting quiz organised in Singapore since 2004! NAQ 2010 promises to be a fun-filled event. Students will be immersed in a series of accounting-related activities to revise their accounting concepts and to stimulate their passion for accounting.

The event will take place on 21 July 2010, from 1.00pm to 5.00pm, at the Ngee Ann Polytechnic Convention Centre. Click on the button below for more information!

National Accounting Quiz 20102

Looking for Trainers and Facilitators!

Jump Grades Education rebels against boring, dry, sleep-inducing accounting coaching offering schools and private education institutions customised coaching/ tutoring services which clients say brings incredible, measurable results.

With an excellent background in training/coaching, the company brings talented and experienced teams of tutors, web technologists, useful publications and industry practitioners to help students learn accounting with amazingly clear understanding.

“Jump Grades” delivers its name and differentiates coaching businesses with clear positioning to stand apart from the crowd.

We are looking for folks who share the same passion to help students understand accounting the way we do. If you are an educator, private tutor, accounting-trained person with interest in teaching, (ex) school teachers, bookkeeper, freelancer, CPAs or business owners – we would like to hear from you!

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Source Document – the Returned Cheque Advice

IRD Returned Cheque Advice DBS

Image courtesy of The Association of Banks in Singapore

Reasons for Dishonoured Cheques

Whenever a cheque given to a business bounces, the bank will send notice to the business that the customer/ debtor’s cheque was dishonoured. The cheque may not have been cleared for one or more of the following reasons:

1. There is insufficient funds in the payer’s bank account.

2. The cheque was not written in the form that it was supposed to

a. Differing/missing signature(s). It is not uncommon for companies to have more than one signatories.

b.  Amount in words and numbers don’t tally,

c. “or bearer” was strike off for a cash cheque,

d. Too many corrections made on the cheque.

3. The cheque was post dated.

Image Return Document (IRD), Return Cheque Advice or Refer to Drawer

This notice comes in the form of an Image Return Document (IRD) which contains a scanned image of the dishonoured cheque. The IRD can be re-presented to the bank to receive payment subject to some of these conditions:

Conditions for IRD Presentment, if applicable

1. IRD with any alteration, mutilation or tear will not be accepted
2. To be presented at any of the bank’s branches in Singapore.
3. The IRD will be retained when presented to the bank.
4 To be presented on a clearing day not later that 6 mmonths from the cheque date,

For those taking the GCE O’/N’ Level Principles of Accounts, the IRD is mentioned in the textbooks as notice of dishonoured cheques in the chapters on Cash Book and Bank Reconciliation. The following words/ phrases refer to the IRD:

– Return Cheque Advice

– Refer to Drawer

– Returned by bank marked “insufficient funds”

– Cheque given by xxx (name of debtor) was dishonoured.

Download a sample a real-life Return Cheque Advice in pdf here.

The Association of Banks SingaporeThe Association of Banks in Singapore (ABS) represents and promote the interests of member banks as well as help set standards of good practice and raise  the banking industry expertise in Singapore. The pdf version of the Cheque Return advice first appear in ABS’ website and is reproduced here with permission.

5 Reasons Why Principles of Accounts

this is the closest Creative Commons Licensed Picture I could find! You just finished your final year examinations and are considering your options. The familiar arts (history, literature or geography) and science  (biology, physics and chemistry)

Principles of Accounts (POA) sounds so foreign and you’ have heard from friends that it is boring. But there’s more to debits and credits in POA.

 

“’Double-entry bookkeeping’ is one of the great discoveries of European civilisation, but five centuries later most people are still muddled about assets and liabilities. Without such knowledge, technical terms like ‘balance-sheet recession’ and ‘rebuilding balance sheet’ are meaningless.” – Robert Skidelsky, member of British House of Lords and Professor Emeritus of political economy at Warwick University* 

Here’s 5 Reasons Why You Should Pick Up POA:

1. Importance of Accounting
2. Valuable Skill for Daily Life
3. Accounting as a Career
4. Dollars and Sense
5. Taking it further – Upward Mobility

1. Importance of Accounting

Accountants are responsible for providing information that is used to determine the present and future economic stability of the organisation. Bosses depend on them to make business more profitable, investors make decisions using accounting information, government tax on the profits and employees read them to find out if they get their bonuses.

2. Valuable Skill for Daily Life

While subjects like geography are interesting, there may be very little opportunities for you to be able to differentiate one rock from another. signContract

Accounting, however, is different. It is a lifeskill;

Whether in budgeting for the groceries, writing cheques, running a blogshop, understanding contracts or with knowing your bank /CPF statements, the ability to read numbers and make a story out of them makes accounting skills something very valuable.

Principles of Accounts in Personal Finance & Investment

Accounting skills becomes essential if you want to be on your way to a stable and growing level of wealth. You will be able track your net worth, manage household expenses, budget for holidays, set up a home-based business and follow on investments (e.g reading company annual reports).  Accounting can also be used to assess interest rates on house mortgages and car payments.

3. Accounting as a Career

Accounting is the language of business. Today, more CEOs are armed with accounting degrees than any other area of study.  Career opportunities associated with a degree in accounting are practically endless due to how broad the subject is.  Jobs where accounting skills are valued include:

Accountant
Actuaries
Auditors
Brokerage Clerks
Budget Analysts
Claims Adjusters, Appraisers, Examiners, and Investigators
Certified Public Accountants
Credit Analysis
Debt Counselors
Economists
Financial Analysts
Financial Managers
Financial Services Sales Agents
Insurance Sales Agents
Insurance / Reinsurance Underwriters
Loan Officers
Personal Financial Advisors
Securities and Commodities Sales Agents
Tax Inspectors, Collectors and Revenue Agents

The “Iron Rice Bowl”

Another reason college students should consider studying accounting is the condition of the economy.  Whether the economy grows or weakens, businesses always need for someone to calculate the profits or the losses. In economic downturns, businesses need to cut down on costs to make their business more profitable.  Businesses also need a strict set of internal controls to make their business more efficient.  The only way to ensure that both of these can happen is through stringent accounting.

4. Dollars and Sense

Job opportunities are not the only reason that university students should consider accounting.  The job can be financially rewarding.  The starting salary of a local accounting graduate averages S$2,600. Good performers can expect an average of S$450 increment in his salary every year.

A partner of a large accounting firm can expect to receive an annual salary of slightly less than S$1 million. This salary, of course, can change based on company, location and industry.

According to Ambition’s 2009 Market Trends and Salaries Report, the Heads of Accounting departments take home salaries in the range of $100,000 – $500,000, excluding performance bonuses, stock option and other allowances.

Accountant Salary Table

5. Taking it further – Upward Mobility

An accounting degree course uses the very same principles you learn in your GCE O/N’ levels POA. It is also not an exaggeration to say you can work as a bookkeeper after your O’/N’ level exams. An accounting degree, however, means you’ll have access to better jobs and more opportunities to advance your career than someone who’s trying to make it in the field without one. With proper training, you can find a worthy entry-level position and step up to greater positions in the future. A skilled accountant is valued in large organisations. Many influential individuals in large organisations are qualified accountants and contribute positively to their communities.

We love to hear from you!

Share your experience and thoughts with us!  Your sharing will allow readers to benefit.  Questions on accounting education? Contact me here. I do my best to help.

—–

*quoted from “The Price of Clarity,” published 24 May 2010 by The Straits Times, Singapore.

 

Read More:

7 Reasons For Becoming An Accountant And Not A Fashion Designer – by Herald de Paris et Cie

Image Credits

5 reasons why accountancy—1953