Bookkeeping NC III cheat sheet

Double-entry rule: every transaction affects at least two accounts and total debits must equal total credits.

Normal balances: assets and expenses are debit-balance; liabilities, equity, and income are credit-balance.

Accounting equation: Assets = Liabilities + Equity; expanded: A = L + Capital - Drawings + Income - Expenses.

Debit/credit effects: debit increases assets and expenses, decreases liabilities, equity, and income; credit does the reverse.

Journal entry order: date, accounts and explanations, debit column first, credit column indented below.

Posting: transfer each journal entry to its ledger account, then foot and balance the account.

Trial balance: list all ledger balances; total debits must equal total credits or an error exists.

Source documents drive entries: sales invoice, purchase invoice, official receipt, delivery receipt, cheque stub, petty cash voucher.

Income statement: Revenue - Cost of Sales = Gross Profit; Gross Profit - Operating Expenses = Net Profit.

Statement of financial position: Assets = Liabilities + Equity; classified into current and non-current.

Current ratio = Current Assets / Current Liabilities; quick ratio = (Current Assets - Inventory) / Current Liabilities.

Gross profit margin = Gross Profit / Net Sales x 100; net profit margin = Net Profit / Net Sales x 100.

Return on assets = Net Profit / Total Assets x 100; inventory turnover = Cost of Sales / Average Inventory.

Cost of goods sold = Opening Inventory + Purchases - Closing Inventory.

Closing entries transfer income and expense balances to the income summary, then to equity.

Adjusting entries: accruals, prepayments, depreciation, and allowances for doubtful debts before statements are prepared.

Bank reconciliation: adjusted bank balance = bank statement balance + deposits in transit - outstanding cheques +/- bank errors.

Adjusted book balance = cash book balance + collections by bank not yet recorded - unrecorded charges +/- book errors.

Deposits in transit and outstanding cheques are timing differences; bank charges and direct credits require book entries.

NSF/returned cheques are deducted from the book balance and recorded as a receivable from the customer.

Petty cash imprest system: reimbursement equals total vouchers plus cash on hand shortfall to restore the float.

Cash count: physical cash plus petty cash vouchers must equal the imprest float; shortages are recorded as a cash short/over account.

Bank statement credit balance means the bank owes the depositor; a debit balance on the statement indicates an overdraft.

Reconciliation is complete only when the adjusted bank balance equals the adjusted book balance.

Gross pay = basic pay + overtime + allowances + bonuses; overtime rate is typically 125% of hourly rate.

Net pay = Gross pay - (SSS/PhilHealth/Pag-IBIG contributions) - withholding tax - other deductions.

SSS contribution is shared by employer and employee based on a salary bracket; employer share is a payroll expense.

PhilHealth premium is a percentage of monthly salary split between employer and employee.

Pag-IBIG contribution is a fixed percentage of salary subject to a maximum monthly fund salary.

Withholding tax on compensation uses the BIR withholding tax table: tax = (taxable income x rate) - exemption.

Taxable compensation income = gross compensation - non-taxable benefits - mandatory contributions.

Payroll register records gross pay, deductions, net pay, and employer contributions per employee; the payroll journal records the liability.

VAT payable = Output VAT - Input VAT; output VAT is 12% of gross sales, input VAT is VAT on purchases.

Percentage tax (non-VAT registered) is generally 3% of gross receipts; it is not the same as VAT.

Withholding tax remittance: expandable withholding tax on compensation is filed and paid monthly (BIR Form 1601-C).

Quarterly income tax return for individuals is BIR Form 1701Q; annual is 1701; corporations use 1702Q and 1702.

VAT returns are filed monthly or quarterly (BIR Form 2550M/2550Q) depending on registration; input VAT must be supported by receipts.

Filing deadlines: monthly returns are generally due by the 10th or 15th of the following month; quarterly and annual deadlines follow BIR issuance.

Statutory returns must reconcile to the general ledger control accounts for output VAT, input VAT, and withholding tax payable.

Penalties for late filing: surcharge of 25% plus 12% annual interest and compromise penalty.

Chart of accounts is set up first in accounting software; every account has a type (asset, liability, equity, income, expense).

System access control: unique user IDs, role-based permissions, and password policy prevent unauthorized entries.

Audit trail must log user, date, time, and amount of every entry; entries are never deleted, only reversed.

Backup schedule: data must be backed up regularly, stored off-site or in the cloud, and restore-tested.

Period-end procedures: reconcile sub-ledgers to the general ledger, lock the period, then run reports.

Quality check: every transaction must have a source document, be authorized, and be posted to the correct account.

Workplace safety: report hazards, use correct lifting technique, keep walkways clear, and know emergency exits and first-aid points.

Data privacy: client financial data is confidential; disclosure requires authorization and secure handling of records.