Cooperative Accounting

by | Jan 6, 2024 | Accounting Articles

Co-operative society and accounting system.

Cooperative accounting is the applications of financial accounting principles, concepts and policies to cooperatives in order to ascertain its financial position, promote accountability, efficient management and ensure viable operations of co-operative financial resources.

In other words, the accounting system and bookkeeper accurately record and report the cooperative’s daily business transactions.

Furthermore, the cooperative law makes the keeping of proper sets of accounting records and the preparation of the final accounts compulsory for every registered cooperative society and sets of information that must be disclosed in the final account.

Moreover, the cash books and receipts are source documents, while income and expenditure accounts and balance sheets are final accounts.

ACCOUNTS AND RECORDS OF COOPERATIVE ACCOUNTING.

1.MEMBER’S PASSBOOK

Member’s passbook is opened for every member which serves as a personal account on which all transactions between a member and the society are recorded. Moreover, below is the front- and back-page sample of members passbook.

Sample of members; passbook showing front page and back page of document used in cooperative accounting.

2. ANALYSIS BOOK

Also, analysis book is use for recording members’ contributions, loan disbursed and repayment, membership withdrawal, fine and other incomes on monthly basis. However, this book helps to analyse the transaction on a monthly basis. In addition, this book help cooperative to always spread open in front of members at any general meeting of the society.

Sample of Analysis book were various income received by cooperative are analyzed. It is one key document used in cooperative

3. PERSONAL LEDGER

Personal ledger helps to record member’s contributions of shares, savings, deposits, withdrawals, loan and refunds. In addition, the entries into this book are from the individual’s entries in the analysis book which is also entered in the passbook. With proper recording of transaction, individual cash balances can be seen at a glance.

Sample of personal ledger that shows the total contribution by each member and also their balances. it is one key document used in cooperative

4. LOAN REGISTER

Obviously, Loan register is a source document containing information regarding all loans granted at any time. In addition, such information includes membership personal number; member identity number; committee meeting minute number; cheque number. Also, includes amount authorized and approved; amount applied for and granted; date of approval and refund; period of the loan.

Sample of Loan register used as a key in cooperative accounting.

5. CASH RECEIPT

Also, cash receipt helps to record all money received in cash or in cheque. Also, it is financial transactions used as supporting evidence that money have been received on behalf of the society. Moreover, all receipts must be serially numbered and used in that order.

Sample cash receipt used in cooperative

6. CASH BOOK

Moreover, a cash book is a financial record that shows all cash receipts and disbursements, including bank deposits, withdrawals, and balances.

Cask book used in cooperative accounting

7. INDIVIDUAL MEMBERS’ CONTRIBUTION

Additionally, in co-operative management, recording all transactions and producing financial statements on time is important. Clearly, these statements are the output based on each member’s contributions. By tabulating each member’s share and savings contributions in the individual contribution table, it’s easy to see the breakdown of each member’s contributions. Column A shows the fraction of each member’s share contribution, while column B shows their savings contribution.

8. GENERAL LEDGER

A general ledger is a cooperative financial record-keeping system that uses debit and credit account records. It can validate a trial balance, such as bank charges, telephone, and travelling expenses and asset account.

general ledger used in cooperative accounting

9. INCOME AND EXPENDITURE ACCOUNT

The Income and Expenditure Account summarises all the income and expenses incurred during the current accounting year. Its primary objective is to calculate the surplus or deficit. However, cooperatives only declare surplus or deficit, not profit or loss, since they are exempt from paying taxes.

income and expenditure account, cooperative accounting

10. STATEMENT OF FINANCIAL POSITION

A balance sheet is a financial statement that shows a company’s assets, liabilities, and equity on a specific date. It summarises the business’s overall value at a particular time, like a snapshot.

statement of financial position, Cooperative accounting

11. CASH FLOW STATEMENT

In addition, a cash flow statement is a financial record that presents a company’s incoming and outgoing cash for a specific period. This document shows the cash flows, the money that comes in and goes out of the business. Cooperative uses these statements to keep track of, document, monitor, and report these transactions.

cash flow statement, cooperative accounting.

CONCLUSION

Therefore, cooperative laws around the world require the maintenance of proper accounting records. However, seeking assistance from experts with practical experience can help improve your cooperative accounting system. Furthermore, if you are looking for the best way to manage a cooperative society, consider purchasing a revised cooperative book from our book-shop or at Amazon.com.

Download free Excel financial model designed for cooperative accounting management.

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If you are facing any issues related to the financial model, please feel free to contact me for consultancy services.

Alternative Dispute Resolution in Nigeria.

by | Sep 15, 2023 | Accounting Articles

Top Alternative Dispute Resolution (ADR) in Nigeria.

Alternative Dispute Resolution in Nigeria is practiced within Nigeria at the institutional and individual level with and without the involvement of the court system. 

The list of institutions that practiced ADR in Nigeria, namely, The Chambers of Commerce, private enterprises, industry groups etc. In the case of individuals are judges, specially trained practitioners (i.e. arbitrators, mediators, accountants), elders, traditional rulers, chiefs, religious leaders. 

The practitioners involved in ADR is industry-specific that have technical expertise in specific areas like environmental disputes, labour disputes, family law, etc.

Furthermore, the current Nigerian laws have sufficient provisions that have addressed Alternative Dispute Resolution in Nigeria and the methods in resolving disputes.

These provisions of the laws are discussed below.

(1) The 1999 Constitution

The Constitution is the supreme law of the land that endorses arbitration. Section 19(d) of the Constitution states that part of Nigeria’s foreign policy objective is respect for international law and treaty obligations. Nigeria also seeks for settlement of international disputes by negotiation, mediation, conciliation, arbitration and adjudication.

(2) Arbitration Laws

Nigeria, like other progressive countries, has subscribed to many international ADR Laws and Rules. The United Nations Commission on International Trade Law (UNCTRAL Model Law of 1985) and UNCITRAL Arbitration Rules domesticated in Nigeria under the Arbitration and Conciliation Act (ACA).

(3) Other Federal Acts

Nigerian body of laws is replete with several statutes that provide for arbitration or other ADR mechanisms. However, a fewer list is mentioned below of the law and the applicable sections: 

  1. Sections 11 and 30 (4) of the Matrimonial Causes Act (Cap. M7 LFN 2004). This section talks about reconciliation between the husband and wife or parties. As they can get the Marriage conciliator to take an oath of secrecy to settle out of court.
  2. section 2, Consumer Protection Council Act, (Cap C25 LFN 2004), 
  3. sections 29 and 33, of the Environmental Impact Assessment (EIA) Act (Cap. E12 LFN 2004), 
  4. Sections 4, 8, 9, 20, 22 of the Trade Disputes Act (Cap. T8 LFN 2004), 
  5. section 11 of the Petroleum Act(Cap. PI0 LFN 2004), 
  6. section 26 of the Nigerian Investment Promotion Commission Act, (Cap. N17 LFN 2004); 
  7. section 27 of the Public Enterprises (Privatization and Commercialization) Act, (Cap. P38 LFN 2004), 
  8. section 22 of the Nigerian LNG (Fiscal Incentives, Guarantee and Assurance) Act (Cap. N87 LFN 2004), 
  9. Section 49 of the Nigerian Co-operative Societies Act (Cap. N98 LFN 2004); 
  10. section 5 of the National War College Act (Cap N82 LFN 2004); 
  11. sections 3 and 6 of the National Boundary Commission, Etc. Act; (Cap. N10 LFN 2004), 
  12. section 3 of the Advisory Council on Religious Affairs Act (Cap. A8 LFN 2004); 
  13. section 4 of the National Office for Technology Acquisition and Promotion Act( Cap. N62 LFN 2004), 
  14. section 4 of the Nigerian Communications Commission Act (Cap. N97 LFN 2004) etc.

(4) Court Laws and Rules

Lastly, Court laws and rules govern procedures and proceedings for the conduct of business in the court.

Top 55 Balance Sheet Keywords

Top 55 Balance Sheet Keywords

by | Sep 15, 2023 | Accounting Articles

Top 55 balance sheet keywords relevant to business. It all started from account receivables to total non-current liabilities

Top 55 balance sheet keywords are available below.

1. Account Receivables

2. Account Payables

3. Accrual

4. Asset

5. Accumulated Depreciation

6. Bank Account

7. Bank Overdraft

8. Bill Payable

9. Cash and Cash Equivalents 

10. Computer Software

11. Copyrights 

12. Current Asset

13. Current Liabilities(within 1year) 

14. Current tax payable( Unpaid Tax)

15. Customer Lists.

16. Deferred tax 

17. Development Cost

18. Dividend payable(Unpaid Dividend)

19. Equity

20. Furniture and Fixtures

21. Goodwill 

22. Intangibles Noncurrent Asset 

23. Inventories 

24. Investments in Associates 

25. Investments in Equity Instruments 

26. Land and building

27. Liabilities 

28. Long-term Asset.

29. Long-term Borrowings 

30. Long-term Provisions 

31. Mortgage Payable 

32. Motion Picture Firm 

33. Net Assets 

34. Net Worth

35. Non-Controlling Interest 

36. Non-current Liabilities (over one year) 

37. Non-current Asset

38. Notes Payable 

39. Other Components Equity 

40. Other Current Assets 

41. Other Intangible Asset           

42. Patents

43. Prepaid

44. Property, Plant and Equipment

45. Retained Earnings 

46. Salary Payable

47. Share Capital 

48. Share part of Long Term Borrowings 

49. Short Term Borrowings (Short-term debt)

50. Short term provisions 

51. Tangible Non-current Asset 

52. Trade Mark

53. Total Assets 

54. Total current liabilities

55. Total Non-current liabilities    

Moreover, to get more Top 55 balance sheet keywords, get in touch with us

How accountant use drone technology

by | Sep 6, 2023 | Accounting Articles

Drone Techbology relevant to accountant

Introduction

How accountant use Drone technology to achieve their task depends on the sectors or schedule of activities. In addition, drones are unmanned aerial vehicles (UAVs) that can fly remotely.

The global drone market predicts to increase from $26.3 billion in 2021 to $41.3 billion by 2026. Also, in 2020, both US and the UK used drones to deliver drugs during the COVID-19 pandemic (Appelbaum et al., 2020).

Drone technology has proven helpful in war zones and intelligence gathering and also in a civilian role, such as:

  • Accounting and Auditing Profession,
  • Search And Rescue,
  • Traffic Monitoring,
  • Videography,
  • Surveillance,
  • Delivery Services,
  • Weather Monitoring,
  • Drone-Based Photography,
  • Firefighting, Agriculture,
  • Personal Use.
  • Land surveying

These Countries use of Drone Technology

 Countries that make use of drone technology and require permission for all aerial drones through regulation.

Moreover, the regulation addresses different types of civil drone operations and their respective levels of risk as stated by European Union Aviation Safety Agency

  • In Germany, there are limited zones outside protected areas with high urban density or people conglomerations.
  • Also, all EU Member States, including Norway and Liechtenstein.
  • Switzerland and Iceland are also expected to apply this regulation soon.
  • In United States for example, they used drone technology for their operation(Ovaska-Few, 2017).
  • In 2013, Poland passed a law allowing the commercial operation of drones, which led to the birth of Drone Powered Solutions.
  • South Africa that has entirely established drone regulations in place which was carefully integrated into existing aviation law.
  • Lastly, in Australia, Rio Tinto who has its facility in a remote area planned in 2016 to start using drone to monitor mine sites including the staff.

Companies that have used drone in their workplace and in others area of operations.

  • It was recorded that PwC completed its first stock count audit using drone technology. With the assistance of a drone, they were able to capture images at a coal reserve in South Wales and used them to measure the volume of the coal, based on the measurement of volume.
  • Amazon and Google are already testing ways to deliver packages with drones.
  • Facebook has started using drones to provide internet connections in remote locations.
  • Basin Electric’s utilization of drones has enhanced efficiency and safety while concurrently reducing costs.
  • Furthermore, Ford Motor Company filed a patent to start the use of drones for dead bateries. The patent was filed on 3rd February, 2017 and circulated on March 8th, 2022, and assigned serial number 11271420.

How Accountant Use Drone Technology to the Accounting Profession.

expert controlling drone technology.

Source: Naira Technology

With the help of drone technology, however, accountants can now complete their work in a shorter amount of time. Technological advancements have significantly changed the accounting and auditing profession in recent years.

In 2017, the emergence of drone technology has revolutionized the accounting and auditing profession. Drones have opened up new possibilities for accountants to perform their tasks more efficiently and effectively.

Emerging technologies like AI, blockchain, big data, the IOT, and drone technology have revolutionized accounting profession (Qasim et al., 21).

For example, accounting and audit firms that work with clients in mining and inventory can utilize drone technology to take thousands of pictures and measurements of a site (Ovaska-Few,2017).

Also, this can aid in accurate assessments of holdings, making tasks like physically measuring coal a thing of the past. An estimated volume can be obtained in less time with just a two-meter GPS Tracking pole.

What are the Benefits of Drone Technology to the Accounting and Audit profession.

Source: djm-aerial.com

These list below are the 18 benefits of how accountant use drone in the accounting and auditing profession.

  1. Revenue Recognition
  2. Perform physical inventory: Drone could recount inventory if required-data feed repeatedly into audit app that re-performs the process. Using drones to automate livestock inventory count reduced count time from 681 hours to 19 hours (Qasim et al., 21).
  3. Asset valuation and Verification: Visually inspect the asset for impairment, safety is not an issue.
  4. Time-efficiency and effectiveness: Drone devices help to improve and increase effectiveness and efficiency in the accounting and auditing profession.
  5. Accuracy: Produce accurate data that can be relevant for future forecast and planning. It depend on how accountant use drone technology to collect insight into the condition of assets. This is faster, cheaper, safer and more accurate than traditional methods (Johnson, 2022).
  6. Save Cost: Drones may save money for accounting clients, who can use them for stock takes, mapping, safety monitoring and to inspect bridges and building.
  7. Productivity: It can enhance productivity
  8. Also, Reduce the risk of injury: he benefit in health and safety as the need for someone to climb over the coal pile are removed.
  9. Speed: Helps speed up some business and accounting processes.
  10. Monitoring strategies . Help monitor staff, operation and some dangerous zone. For instance, drones can assist the firm or staff to take account area difficult to reach.
  11. Storage of Long-term data: Moreover, drone methods allow for storage of long-term data. This is useful to account for physical factors (like weather, light conditions and geomorphology of the beach) for more spatio-temporal analysis.
  12. Automate and accelerate repetitive accounting tasks (Qasim et al., 21).
  13. High Quality Data Acquisition
  14. Enhance Mobility
  15. Reduce Downtime
  16. It improves disaster Recovery situation
  17. Enhance Trend Analysis: It depends on how accountant use drone technology to conduct trend analysis.
  18. Lastly, Enhance Maintenance Standards

The technology produces massive amounts of data that require interpretation and translation into meaningful information for informed business decisions.

Also, as accountants keeping up to date with new technologies and understanding their potential to enhance efficiency and effectiveness is essential. Developing the necessary skills to interpret and present data will enable them to add value to their employers. Since the drones technology are control by expert . However, drones are prone to making mistakes just like any other technology, which is why one can exempt them from errors.

Source: Rewires

Furthermore, competent accountants who are conversant with latest technology, play a crucial role in helping companies thrive and maintain a competitive advantage. It is imperative that organizations have skilled accountants on their team to achieve these goals.

Implications of How Accountant use drone Technology to the Accountants and Auditors

  1. Be part of the at least 95% that will accept this new technology if they must prepare for the future.
  2. Develop a new skill that is all-encompassing for them to be relevant every time and drive the development of accounting profession.
  3. For companies to successfully transform, there will be a great demand for individuals with fundamental knowledge and expertise. For instance, such individuals must possess the necessary skills and understanding to support the company’s transformational goals.
  4. Also, become a consultant in the field to remain relevant and being in change of the world where we live by data.
  5. Become a strategic thinker.
  6. Apply professional judgement whenever is necessary and obtain a better results
  7. Establish Drone-focused department that enable accounting firms to handle all matter related to drone.
  8. Check the impact of drones on client’s business operations.
  9. Lastly, it is vital for every accountant or auditors to be familiar with the present drone regulations in their countries.

Conclusion

In this article, the writer examined how accountant use drone technology and to achieve their work on daily basis. Similarly, drones can improve the accuracy and efficiency of audits. However, how they can use it to collect data and perform inspections in hard-to-reach areas.

Consequently, the article highlighted the potential impact of commercial drones on the accounting profession, with predictions that this technology will revolutionize traditional accounting procedures (Ovaska-Few, 2017). Accounting professionals and academics need to recognize the significance of drone technology and patronize the suppliers as it is here to stay. In addion, the sooner we adapt to this technology and use it to their advantage, the better. Accountants and auditors are condition to embrace this new technology and see it as an improvement to their jobs instead of threat.

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Purchase Order

by | Aug 28, 2023 | Accounting Articles

Purchase order

Purchase Order

Purchase orders (PO) are essential for an accountant to help achieve financial goals and is one of the key Source Documents in Accounting. The buyer sends these orders to the vendor or sellers or suppliers, outlining what they expect for the order and when it should arrive. In contrast, a sales order generated by the supplier and sent to the buyer. Additionally, the supplier generates an invoice to show the buyer how much they owe for the purchased goods.

Benefits of Purchase Orders (PO)

  1. Controlling the procurement of products and services from external suppliers is easier with purchase order.
  2. The inventory process is more accessible with the help of PO. Once the supplier receives the PO, they will retrieve the items listed in the PO from their inventory.
  3. The Purchase Order acts as a legal document that helps prevent future transaction disputes.
  4. It prevent duplicate orders by keeping track of order and from whom, which can be challenging when a company decides to scale its business.
  5. Overall, a well-organized purchase order system helps simplify the inventory and shipping process by keeping track of incoming orders.

The process of initiating a purchase order should begin with:

When a buyer needs goods, they start by creating a purchase requisition. This document helps to keep track of the items ordered and is sent to the purchasing department within the company. It also helps the company keep track of expenses. The acountant can only create purchase order once an authorized manager has approved the purchase requisition.

Once the buyer has confirmed the goods they wish to purchase, they will initiate a PO. This document will include the date of the order, FOB shipping information, discount terms, buyer and seller names, a description of the goods under process, item number, price, quantity, and the PO number as shown in the attachment.

The seller can accept or reject a PO with all the transaction and buyer’s requirements. If the seller agrees with the PO, it becomes a legally binding contract.

Keeping a record of the purchase order is crucial for buyers. The demand remains active until the company receive all or part of the goods.

Goods Receive Note (GRN) is issue after successful delivery from suppliers. Each order has an assigned unique number associated with the Purchase order number. The accountant can use this number to ensure that the goods received match those ordered and listed on the GRN.

Before company accountant make payment, they will verify that the Purchase order number matches the invoice. This ensures that the charges to pay by the buyer are the correct amount for the goods before processing the payment.

Top 35 Source Documents in Accounting

by | Jan 3, 2023 | Accounting Articles

Top 35 Source Documents in Accounting that are relevant to accountant.

Introduction

Top 35 Source Documents in Accounting are relevant to help accountant in their job. Also, it is a document that serves as proof of transaction that is available in apps that provide such services.

Top 35 Source Documents in Accounting stated below:

1.Purchase Order

The buyer sends this to the vendor. They will then outline exactly what the order should contain and when it should arrive.


2. Sales Invoice

This is a process for managing account receivables. When the seller gives out goods, they will provide a document containing all relevant sale details.

3. Purchase Invoice

This is made for account payables. The seller will enter this as sales invoice while the buyer will enter it as purchase invoice.

4. Debit Note

This is evidence of reduction in purchases and can be useful to support purchases return journal. Furthermore, in customer books, debit note will reduce how much they owe to the seller.

5. Credit Note

This is evidence of reduced sales and support sales return journal. In addition to supplier’s books, credit note reduces the amount owed by the customer.

6. Cheque

This is a special bank note that represents the cash paid by the customer.

7. Revenue receipt

This is used to record the receipt of cash which is a proof that the payment is made.

8. Cash register receipts

This is a business paper that listed the money coming in from customers.

9. Bank or Credit advice

They are debit or credit bank advice. Bank credit advice is bank documents informing the business of an increase made in the business’s bank account. Unlike bank debit advice that is opposite to bank credit advice.

10. Deposit slips

When one receives cheque or cash from customer, the seller will take it to the bank and present.

11. ATM cards

The production of receipt from ATM machine can serve as evidence that money has been taken from the bank account.

12. Bank statements

This is a summary of financial transactions that occurred at a certain institution during a specific time period. For example, a typical bank statement may show your deposits and withdrawals for a certain month.

13. Bill of exchange

This is an unconditional order in writing, addressed by one person to another, signed by the person giving it. It also require the person to whom it is addressed to pay on demand.

14. Payroll report

This can also refer to the list of employees of a business and the amount of compensation due to each of them.


15. Cancelled Cheque

This is a check that has been paid or cleared by the bank

16. Cheque Stubs

This is the check kept by the payee with information such as the check number, date, and amount.

17. Employee Timecard

This is a method for recording and tracking the amount of an employee’s time spent on each job

18. Board minutes or minutes of meetings

The secretary of the board usually takes minutes during meetings.

19. Goods Dispatched Note (GDN)

This a document of the company that lists the goods sent out to a customer. Without a doubt, the company will keep one record of goods dispatched notes.

20. Goods Issues Note (GIN)

This is a physical record of the movement of goods or materials from the warehouse or store to production department.

21. Stock take Records

This is also called stock counting. It is when you manually check and record all the inventory that your business currently has on hand

22. Stock Record

A Bin Card is a card indicating quantitative records of the receipts, issues and balances etc.

23. Goods Received Note (GRN)

This is source document that shows the goods that a business has received from a supplier.

24. Remittance advice

This source document can confirm the amount paid and shows discrepancies that can easily be investigated.

25. Insurance Endorsement Certificates

This is where one party will add the other party as an “additional insured” on their commercial liability insurance policy.

26. Point of Sales Summaries

This can be used to record a number of sales at a cash register.

27. Memorandum

Memo is a written document businesses use to communicate an announcement, policy changes, price increases or notification to take an action, such as attend a meeting, or change a current production procedure.

28. Computer-generated Receipts

This is the kind of receipts is to be generated by the computer.

29. Lease Agreement or Rental Agreement

Lease contracts are formal documents that identify the lessor, lessee, what’s being leased, whether it’s an asset or a property.

30. Sales Tax Returns

This is the taxpayer’s document of declaration. This will enable the taxpayer to furnish the transaction details during a tax period and deposits his Sales Tax liability.

31. Cash Register Tapes

This allowed one to keep a record of all customer transactions and/or provide them with a receipt.

32. Adjustment Notes

This are issued to customers due to damaged, returned or undelivered goods

33. Employee Pay Advice

This source document that can helped to provide written evidence concerning employee income.

34. Payroll Advice Report

This payroll reports helped small businesses understand payroll costs and summarize payroll data.

35. Evidence of Sale or Disposal of Assets

This is the removal of a long-term asset from the company’s accounting records.

Conclusion

Indeed, all these top 35 source documents in accounting are integrated in several apps that offer such accounting services. Moreover, this App made it possible to have all these source documents in one place to make the accountant job easier and simple.

Kindly add your own source documents to the Top 35 Source Documents in Accounting listed above. This will help us to update our records accordingly.

Watch several videos of how to prepare financial statements from source documents

Prepare Financial Statements from Source Documents Part

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