Archive for December, 2009

Some of you have taken formal accounting courses and know the debit/credit rules backward, forward & inside out. But the bulk of you have “fell into” a bookkeeping role when your real profession was a butcher, baker or a candlestick maker.

Quite simply there are 5 account types and each one can go up or down as follows.

Account Type      To increase this account       To decrease this account

Asset                                                                  Debit                                        Credit

Liability                                                              Credit                                       Debit

Equity                                                                 Credit                                       Debit

Income                                                               Debit                                        Credit

Expenses                                                            Debit                                        Credit

Or use the cheats guide to debits and credits

D E A D   C L I C

This acronym stands for Debit Expenses, Assets and Drawings, and Credit Liabilities, Income and Capital.

You apply this DEAD CLIC rule if an account goes up in value. If an account goes down value, you apply the opposite. In other words, if an expense increases in value, then you debit the account (because the DEAD CLIC rule says to Debit Expenses). If an expense decreases in value, then you credit the account.

Remember also that every transaction affects two accounts, one is a debit, the other a credit. This is why we call it double entry (not single entry) bookkeeping.

Do you need to know this stuff? Well not if you use MYOB software. Does it help to know – most certainly it does even if it means just having a better understanding of what your accountant is preaching on about.

Been stung with a late payment fee because you’ve forgotton to make IRD payments?

Use IRD software to create a personalised calendar of tax deadlines for your own business. Copy the following link into your browser to start the due date calculator. In MYOB software, set up recurring entries (with due date reminders) to prompt you to make payments.

www.ird.govt.nz/calculators/tool-name/tools-t/calculator-due-dates.html

Tax Calendar 2010 - sample

Changes in payment date

Due date falling on weekend or public holiday – all tax types

If a due date falls on a weekend or public holiday, the date moves to the next working day. Your return or payment will also be treated as being on time if it’s postmarked on the next working day.

Legislation changes

From the start of the 2009 income tax year (1 April 2008 for most people) GST return filing and payment dates, where they are not already, will be aligned to the income tax balance date. Provisional tax payments will also be due on the same day as the GST payment for that period.

For example, if your balance date is March and you pay GST two monthly, your first instalment of provisional tax will be due 28 August with your July GST return and payment.