MangoAccountingMaterials.docVIP

Introduction to Basic Bookkeeping 1 Introduction This Introduction to Basic Book-Keeping is part of Mango’s guide to financial management for NGOs (available at .uk). It is a simple introduction to bookkeeping for people who are new to the area. It explains the basic principles, and how to put them into practice. (It is not a detailed explanation of how to prepare a full set of accounts.) For instance, it might be useful for non-finance staff who are keeping accounting records for the first time. This introduction is supported by examples in an Excel workbook, which can be accessed here: .uk/Guide/introtobookkeeping. The names of specific worksheets in the workbook are referred to throughout the text. It may be easier to follow the text with the examples open alongside it. 2 Bookkeeping 2.1 The cashbook What is a cashbook? A cashbook is just a list of all your financial transactions. It includes both payments and receipts. A cashbook is the most important single accounting book. If you do not keep any other accounting records (apart from the supporting documents), then you should keep a cashbook. It records the basic information used to build up a complete set of accounts. What should be recorded in the cashbook? The following details should be entered in the cashbook for each transaction: the date a description a reference number an accounts code (see later) and the amount Can I see an example? The sheet ‘Cashbook’ shows the cashbook for a new field project. It has receipts on the left and payments on the right. But it is important to note that this is just one example of how a cashbook can be laid out. Cashbooks can be set out differently, for instance with receipts and payments amounts columns next to each other, and a running balance column. However, they always contain the same basic information. Can you talk me through it? The first entry recorded (on 1 Jan) is the $20,000 cash, which the Office Manager received from a donor in order to set up a new