Tale - The Unknown Message I Recieved

WEEK ONE: RIGHT ATTITUDE TO WORK

Work is any activity people engage themselves (Physical or Mental effort) in order earn a living e.g. teaching, barbing, engineering etc.

Right Attitude to work –is having a positive state of mind toward a particular job/work i.e. doing a particular job with a rightful purpose or determination to do good in an organisation.

Characteristics of people with positive attitude

i. Interest

ii. Commitment

iii. Promptness

iv. Consistency

v. Punctuality

Rewards For Positive Attitude to Work

i. High performance

ii. Promotion

iii. Respect

iv. Success

v. Productivity

Negative Attitude To Work

This means having a wrong or bad state of mind towards a particular work.

i. Failure

ii. Anxiety

iii. Depression

iv. Stress

v. Bitterness

Punctuality:- is driving at a place of work before or at an agreed time. Punctuality is said to be soul of business. Cultivate the habit of being punctual

Regularity:- is to at the place of work everyday except when on leave or ill

Punctuality and regularity leads to

1. High performance

2. Smooth running of the business

3. Promotion

4. Increment in salary and wages

Irregularity – is whereby an employees do absent from their duty

Punishment is the discipline given to an irregular employees, irregularity leads to punishment

Irregularity leads

1. Punishment

2. Query

3. Deduction from salary

4. Suspension from work

Dismissal

Devotion to duty:- means spending time or energy in doing something. It has to do with total commitment, showing interest and consistency habit.

To improve the general working The following must be considered

1. Have in mind that something can be done

2. Never give up because you cannot be a failure until you give up

3. Do not complain instead do what you can do and leave the rest

4. Make hardwork your major goal

5. Be organised and be reliable

WEEK 2: INSURANCE

Insurance is a legal contract that protects people from the financial costs that result from loss of life, loss of health, lawsuits, or property damage. Insurance provides a means for individuals and societies to cope with some of the risks faced in everyday life. People purchase contracts of insurance, called policies, from a variety of insurance organizations.

Insurance makes up part of the broader financial services industry. Almost everyone living in modern, industrialized countries buys insurance. 

For instance, laws in most states require people who own a car to buy insurance before driving it on public roads. Lenders require anyone who finances the purchase of a home or car with borrowed money to insure that property. 

Business partners take out life insurance on each other to make sure the business will succeed even if one of the partners dies.

IMPORTANCE OF INSURANCE

Insurance benefits society by allowing individuals to share the risks faced by many people. But it also serves many other important economic and societal functions. Because insurance is available and affordable, banks can make loans with the assurance that the loan’s collateral (property that can be taken as payment if a loan goes unpaid) is covered against damage. This increased availability of credit helps people buy homes and cars. Insurance also provides the capital that communities need to quickly rebuild and recover economically from natural disasters, such as tornadoes or hurricanes.

Insurance itself has become a significant economic force in most industrialized countries. Employers buy insurance to cover their employees against work-related injuries and health problems. Businesses also insure their property, including technology used in production, against damage and theft. Because it makes business operations safer, insurance encourages businesses to make economic transactions, which benefits the economies of countries. In addition, millions of people work for insurance companies and related businesses.

TYPES OF INSURANCE POLICIES

1. VEHICLE INSURANCE: Automobile insurance protects against damage to a policyholder’s car and most liabilities that could arise from operating that car. Most U.S. states allow drivers to satisfy their financial responsibility for the costs of auto accidents by obtaining insurance in three categories of liability coverage: 

(1) for injury to any one person

(2) for injury to two or more people 

(3) for damage to another person’s property. An increasing number of states are requiring drivers to obtain auto insurance by law.

2. FIRE INSURANCE: Insurance obtained by owners of homes and commercial properties to provide reimbursement in case of losses resulting from fire. Such insurance is supplied in exchange for the payment of a premium.

Some business firms, however, are self-insurers; that is, they set aside funds to be used exclusively for indemnifying losses resulting from fire.

In fire insurance the premium rates are of two kinds: class rates and schedule rates. Dwellings are largely class rated; that is, they are grouped into fairly homogeneous categories according to the type of occupancy, type of construction, and type of community fire protection. A uniform rate is applied to all risks in the same category. 

Commercial and industrial properties, which vary greatly in respect to degree of hazard, are usually schedule rated. In schedule rating the individual physical characteristics of each risk are appraised according to a schedule of charges and credits. The elements considered in the rating include occupancy, construction, internal protection, community fire protection, and exposure from neighboring buildings.

3. BUGLARY INSURANCE: Residence burglary and outside theft insurance, offering the broadest coverage ever obtainable in this line, has proved very attractive in the past year. Its popularity is expected to continue despite an expected premium rate increase soon after the first of the year. The broad form money and securities policy also gained considerable favor and is serving a useful purpose.

4. MARINE INSURANCE: Insurance that generally applies to the risk associated with the transportation of goods. Over time, marine insurance has become a mixture of broad property coverages, divided between land risks (inland marine) and sea risks (ocean marine).

Inland marine insurance covers domestic risks associated with some element of transportation. It has been broadened to include perils incidental to transportation of property and now deals mostly with personal and commercial property of a mobile nature. Its most familiar form is the personal articles “floater,” which offers an opportunity to insure many valuables, such as jewellery, furs, silverware, and fine arts, in a single policy.

Ocean marine insurance is broken into three basic types: hull (involving loss or damage to the ship); cargo (involving loss or damage to cargoes); and protection and indemnity (involving liability of ship-owners to others).

Hull insurance affords protection to owners of all types of ships for loss or damage to their waterborne property. Typical perils insured against are stranding, sinking, fire, and collision. The hull policy offers an unusual coverage under its collision clause, which provides liability insurance for loss or damage to the other vessel involved in a collision, as well as to its cargo.

Cargo insurance is available for shippers of goods moving by sea or air in international trade. The terms of insurance can be specific (for example, loss or damage resulting from sinking or fire) or “all risk” and can be underwritten for a single transaction (special policy) or on an open-ended contract (open cargo policy) for the international trader. The open cargo policy is the most common form used and usually covers the cargo “warehouse to warehouse,” thus including exposure to those risks that are associated with land transportation as well.

When a ship is imperiled at sea because of fire, storm, or other danger, all efforts must be made to keep the ship afloat. Such efforts often cause damage to portions of the ship or cargo. To prevent inequity, each owner assumes a share of the property damaged or lost as a result of actions taken to save the ship. This method of apportioning losses is known as general averaging.

5. LIFE ASSURANCE: Life assurance, assumption by an insuring organization of the risk of death of a policyholder. Unlike loss in insurance on property, loss in life assurance is certain to occur and is total. The element of uncertainty is when death will occur. Mortality is subject to the laws of probability, however, and life-assurance premiums can be calculated from mortality tables, which indicate the average number of people in each age and gender group that will die each year. 

A person trained to make such calculations, known as an actuary, determines the amount of premiums to be collected yearly from each group in order for the principal (the premiums) and its earned interest to equal the benefits to be paid to the policyholders’ beneficiaries. The principal payment required annually constitutes the net premium. A loading charge to cover company expenses and contingencies is added to the net premium, yielding the total, or gross premium, which the insured pays.

Types of life assurance

Life assurance may be classified in a variety of ways. A classification depending primarily on the manner in which the premium is collected comprises regular ordinary, debit, and group life insurance.

Regular ordinary insurance can be further classified into:

1. Whole life

2. Limited-payment life

3. Endowment and term.

Debit life insurance can be classified into:

(1) debit ordinary

(2) industrial. 

Life insurance may also be classified as participating and nonparticipating, depending on whether or not the policyholder shares in the savings or the profits of the insurer.

BENEFITS OF INSURANCE:

1. It provides protection for business assets and personal properties against risks of accident, flood, fire, burglary and theft.

2. The insured receives compensation in the event of loss or damage.

3. The families or dependants of the assured receive income or economic security after his death.

4. It can serve as a security for loans from the bank.

5. Funds accumulated by the insurance firms are made available to the capital market for long term investment.

WEEK 3 - 4: LEDGER ENTRIES

A ledger account contains a record of business transactions. It is a separate record within the general ledger that is assigned to a specific asset, liability, equity item, revenue type, or expense type. Examples of ledger accounts are:

• cash

• accounts receivable

• inventory

• fixed assets

• accounts payable

• accrued expenses

• debt

• stockholders’ equity

• revenue

• cost of goods sold

• salaries and wages

• Office expenses

• depreciation

• income tax expense

Information is stored in a ledger account with beginning and ending balances, which are adjusted during an accounting period with debits and credits. Individual transactions are identified within a ledger account with a transaction number or other notation so that one can research the reason why a transaction was entered into a ledger account. 

Transactions may be caused by normal business activity, such as billing customers or recording supplier invoices, or they may involve adjusting entries, which call for the use of journal entries.

The information in a ledger account is summarized into the account-level totals shown in the trial balance report, which in turn is used to compile financial statements. The ledger account may take the form of an electronic record if an accounting software package is used, or a page in a written ledger, if the accounting records are kept by hand.

The format of ledger account and posting process

The process of posting journal entries to ledger accounts is very simple. No new information is needed to prepare ledger accounts. The information that has already been recorded in the journal is just transferred to the relevant ledger accounts in the general ledger.

For the purpose of posting to the general ledger, we can divide a journal entry into two parts:

1. A debit part

2. A credit part. 

Both the parts essentially contain one or more accounts. The amount of the account (or accounts) in the debit part of the entry is written on the debit side of the respective account and the amount of the account (or accounts) in the credit part of the entry is written on the credit side of the respective account in the general ledger.

To have a better understanding of the posting process and to illustrate the format of ledger accounts, we need to take a transaction, prepare a journal entry and then transfer it to the relevant ledger accounts.

Transaction: on January 1, 2015, our company sold goods to customers for cash #25,000.

 

 

 

The journal entry of the above transaction and its posting to ledger accounts is illustrated below:

The debit part of the above journal entry is "cash account" and the credit part is "sales account". 

So, the amount of the journal entry ($25,000) is written on the debit side of the cash account and credit side of the sales account. All journal entries are similarly posted to accounts in the general ledger.

WEEK 5 - 6: PETTY CASH BOOK

Besides maintaining a main or general cash  book, many companies also maintain a small cash book known as petty cash book to record small day to day expenditures of the business.

Petty cash book is a type of cash book that is used to record minor regular expenditures such as office teas, bus fares, fuel, newspapers, cleaning, pins, and causal labour etc. These small expenditures are usually paid using coins and currency notes rather than  checks. The person responsible for spending petty cash and recording it in a petty cash book is known as a petty cashier.

Petty cash systems

The cash allocated for petty expenditures for a specific period is entered on the credit side of general cash book and on the debit side of the petty cash book.

The cash is given to the petty cashier either on the ordinary system or imprest system which are briefly explained below:

1. Ordinary system

Under the ordinary system, a lump sum amount of cash is given to the petty cashier. When the whole amount is spent, the petty cashier submits the details of petty expenditures recorded in the petty cash book to the head or chief cashier for review.

2. Imprest system

Under the imprest system, a fixed amount of money known as a float is given to the petty cashier to meet petty expenditures for an agreed period which usually consists of a week or month. 

At the end of the agreed period, the petty cashier submits the details of all expenditures incurred by him to the chief cashier. The total cash spent by the petty cashier during the period is reimbursed to him and the total cash available to spend at the start of the next period becomes equal to the original sum (i.e., float). 

At any time, the total of petty cash balance and all expenditures that have not been reimbursed to the petty cashier is equal to the agreed float.

Types of petty cash book

The petty cash book is of the following two types:

1. Simple petty cash book

2. Analytical petty cash book

Simple petty cash book

Simple petty cash book is just like the main cash book. Cash received by the petty cashier is recorded on the debit side and all payments for petty expenses are recorded on the credit side in one column.

Format of simple petty cash book

 

Example of a simple petty cash book

Record the following transactions in a simple petty cash book for the month of January 2019.

Debit & Checking Services

 

Solution

 

Analytical petty cash book

It is the most advantageous method of recording petty cash payments. In this type, a separate column for each petty expense is provided on the credit side. When a petty expense is recorded in total payment column, the same amount is recorded in the relevant petty expense column.

Example of analytical petty cash book

Record the following transactions in an analytical petty cash book for the month of January 2019.

Solution

 

 

The operation of petty cash

When a petty cashier needs money, he is given a cheque by the main cashier. This cheque is recorded on the payments side of the main cash book. The petty cashier gets cash against the cheque from the bank and records the cheque in the receipt's column of the petty cash book.

When a payment is to be made out of the petty cash fund, a petty cash voucher (PCV) is prepared by the petty cashier. This voucher must be authorized by a responsible officer before the petty cashier makes the payment. Upon payment, the petty cashier records the date, details of the payment (in particulars column), PCV no., the amount of the voucher in the total payment column and also in the relevant analysis column.