Advanced Excel template accounting
Advanced Excel template accounting
This article provides details of advanced Excel template accounting that you can download now.
The Excel program is an essential tool for accounting a company because spreadsheets allow you to annotate and control a wide variety of data. It combines Excel's multiple functions to perform calculations, perform operations and obtain percentages. Downloadable Excel templates are your greatest allies when managing businesses in an efficient way.
Microsoft Excel software under a Windows environment is required to use this template
These advanced Excel template accounting work on all versions of Excel since 2007.
Examples of a ready-to-use spreadsheet: Download this table in Excel (.xls) format, and complete it with your specific information.
To be able to use these models correctly, you must first activate the macros at startup.
The file to download presents four templates advanced Excel template accounting
If you want to have an organized and easy accounting system, you can keep your business accounting up-to-date with these Excel templates. Just download the template and enter the data specific to your business.
Accounting is the process of recording, reporting and interpreting financial information pertaining to an organization.
According to American Institute of Certified Public Accountants:
Accounting is the art of recording, classifying and summarizing in a significant manner and in terms of money, transactions and events, which are, in part at least of a financial character, and interpreting the results thereof.
If we analyze this definition, we get the following components:
- It is about recording transactions
- Transactions should be only of financial nature
- The recorded transactions are then classified according to set rules
- Results are then interpreted for people who are interested in this information
Purpose of Accounting
The main purpose of accounting is
- To keep a systematic record of business transactions
- To calculate Profit and Loss
- To ascertain the financial position of the business
- To provide financial information to different users of this information.
Who are users of accounting information?
These stakeholders or users might include
- Owner/Shareholders: How much profit?
- Managers: How business performed and how they can improve the performance in future
- Employees: To know the profits so that they could demand better wages?
- Investors: Is it safe and profitable to invest in the business?
- Suppliers: Will the business be able to pay for their supplies?
- Government: How much tax should be collected?
- Lenders: It is safe to lend money to the business?
Types of Accounting
Financial Accounting: It is about recording business transactions in a systematic manner, to ascertain the profits or losses of the business by preparing Profit and Loss Account and Balance Sheet.
Cost Accounting: It involves finding out the total cost and unit cost of goods and services produced by the business.
Management accounting: Accounting table and formats may not make sense to a person other than an accounting. This is where Management accounting comes in. It is presenting the accounting information in a manner which a layman manager could understand. It involves ratio analysis, budgets, cash flows etc.
We will be covering some parts of Management accounting in Analysis of Final Accounts section.
Basic Accounting Concepts
Business Entity Concept/Accounting Entity Concept
According to this concept, the business is considered as a separate business entity from its owner(s). Thus the financial information of the business will be recorded and reported separately from its owner’s personal financial information.
For accounting purposes, it is assumed that the business will operate for an indefinite period of time and thus considered as ‘going concern’. For this reason, the realizable value of the property owned by business will not be relevant.
Only those transactions will be recorded in the financial books which can be measured in terms of money. Anything which cannot be measured in monetary terms will not be considered as a part of the accounting data.
All assets will be recorded at their cost price. This means that machinery purchased years ago will be recorded at its original cost of purchase even though its value is lower now.
The reason for doing so is because the business is considered as a going concern and we need not be worried about the saleable value of the asset.
The life a business is considered to be indefinite. But for accounting purposes, the life of the business is divided into specified periods of time. The period may be a month, a half year, a full year or any length of time.
Accrual concept states that revenue is recognized when it is earned and expenses when they are incurred.
Any income or revenue generated must be recorded in the books of accounts whether the payment for it is received or not. Similarly, any expense done by the business should be recorded irrespective of the fact that the business has paid for it or not.
Any transaction which is recorded in the accounting books should be verifiable. In other words, the transaction should backed by some proof in the form of a receipt, invoice, cheque, voucher etc.
According to this concept, the same accounting method should be applied in each accounting period when preparing financial reports. This makes it easy to compare results of one period with another period and the stakeholders can get a more realistic idea about the performance of the business.
It involves being cautious while reporting accounting information. The assets should not be overstated and the liabilities should not be understated.
This is why closing stock is always valued at the lower of cost or market value so that the profits are not overstated.
This principle is based on accrual concept of accounting. It states that revenue earned during a specific period has to be matched with the expenses incurred with earning that revenue. The following point should be considered:
- If an item of revenue is shown in the Profit and Loss account, all expenses incurred on it, whether paid or not, should be shown as expenses in the Profit and Loss account.
- An expense will be recorded in the books of accounts if the revenue associated with it has not been realized.
- Incomes received in advance should not be shown in Profit and Loss account.
- All the cost and expenses incurred on good remaining unsold at end of the year must be carried forward to next year as these goods will be sold in the next accounting period.