Accounting

Introduction to accounting

Where this happens, accounting should show the transaction in accordance with its real substance; that is, on the basis of how the transaction affects the economic situation of the firm. This means that accounting may not reflect the exact legal position concerning that transaction. This most frequently applies to leases and hire purchase transactions. Hire purchase is used by businesses to purchase assets in stages. Take the example of a machine being acquired by hire purchase. Legally, it does not belong to the business until the last installment is paid and an option has been taken up by the business to become the owner of the machine. Effectively, the business has used the machine since it first acquired it in the same way as it would have done had it paid for it in full at that time. The substance over form concept says that the business should show the full value of the machine being bought on hire purchase in its financial statements as though it were legally owned by the business (as an asset), and show the full amount still owing to the supplier of the machine separately as a liability. One aspect that is really important to all accountants is to ensure you are a high level of ethical and principles if you want to practice in Australia. Materiality The accounting concepts already discussed have become accepted in the business world, their assimilation having taken place over many years. However, there is one overriding rule applied to anything that appears in a financial accounting statement – it should be material. That is, it should be of interest to the stakeholders – those people who make use of financial accounting statements. It need not be material to every stakeholder, but it must be material to a stakeholder before it merits inclusion. You also need to ensure you are up to date with all news that is happening in the accounting and bookkeeping industry  Accounting does not serve a useful purpose if the effort of recording a transaction in a certain way is not worthwhile. Thus, if a box of paper clips was bought it would be used up over a period of time, and a cost is incurred every time someone uses a paper clip. It is possible to record this as an expense every time it happens, but obviously the price of a box of paper clips is so little that it is not worth recording it in this fashion. The box of paper clips is not a material item, and therefore would be charged in full as an expense in the period it was bought, irrespective of the fact that it could last for more than one accounting period. In other words, do not waste time in the elaborate recording of trivial items. Accountants distinguish between what they call revenue expenditure (expenditure on items that are not intended to be kept for very long, such as goods for resale and raw materials; or the benefits of which only last a short time, such as labour costs) and capital expenditure (expenditure on non-current assets, i.e. items purchased to be used in the business, such as machines, motor vehicles, and buildings which are not intended to be resold). The definition of revenue expenditure is unhelpful, given that labor is not kept at all but wages are. You can learn about accounting And Bookkeeping Statutory Regulatory information by clicking the following link However, if an item is not material, it will always be treated as revenue expenditure. For example, a stapler would normally be classified as a non-current asset – it is likely to be used for a long time – and, therefore, as an item of capital expenditure. However, in reality, it would be treated as an expense in the period in which it was bought because it is not a material item. Study Accounting can be a creative way to be an accountant or bookkeeper, you can either study a Diploma of account - https://www.edna.edu.au/online-courses/diploma-of-accounting/ or a bookkeeping course https://www.edna.edu.au/online-courses/certificate-iv-in-bookkeeping/. Businesses operate their own individual rules to determine what is material and what is not. There is no law or regulation in the Australia that defines these rules – the decision as to what is material and what is not is dependent upon judgment. A business may decide that all items under $200 should be treated as expenses in the period in which they were bought, even though they may be used for the following ten years. Another business may fix the limit at $500. Different limits may be set for different types of item.   Other helpful accounting resources include:

 

By user23395, ago
Accounting

Accounting Bookkeeping BAS agents

Which course meets the requirements for me to register as a BAS Agent with the TPB?

Do I need to undertake a course with an Australian institution or will my overseas qualifications suffice? What level of education do I need? Will my qualification be accepted? There are many accounting and bookkeeping courses out there on the market, but how do you know which course is accepted by the Taxation Practitioners Board for registration as a BAS Agent?  

What qualification is accepted by the Taxation Practitioners Board?

  According to the Taxation Practitioners Board’s website, an applicant must hold at least a Certificate IV in Accounting and Bookkeeping (or any of the Certificate IV in Accounting or the Certificate IV in Bookkeeping – both of which have now been superseded) to meet the primary qualification requirement if you want to register as a BAS Agent. Visit website here - www.edna.edu.au/online-courses/certificate-iv-in-bookkeeping/ 

Who offers the Certificate IV in Accounting and Bookkeeping course?

The institutions approved to deliver the Certificate IV in Accounting and Bookkeeping program include registered training organisations and TAFEs offer these courses and you can look them up here. Generally, the courses cost more at TAFE than they do at a private registered training organization. You will find that the core units are all the same – as they have been set by the Department of Education and Training, but the elective units will vary from institution to institution.   These education institutions are registered and regulated by the Australian Skills Quality Authority or its relevant state authority such as the Victorian Registration and Qualifications Authority or the Department of Training and Workforce Development Apprenticeship Office. If you want to learn more about accounting and bookkeeping you can find out more about studying a diploma of accounting.   The courses they offer are nationally recognised and the outcomes of these qualifications are reported to the National Centre for Vocational Education Research in an effort to monitor quality and data on student satisfaction.  

What are the requirements for me to register as a BAS Agent?

  To register as a BAS Agent as an individual, you must be able to meet the following requirements:  
  • You must be at least 18 years old.
  • You must be a fit and proper
  • You must satisfy the qualification and experience
  • You must maintain, or will be able to maintain, professional indemnity insurance cover that meets the TPB’s requirements.
  • You must complete an online application, provide the required supporting documents and pay the required application fee of $135.
  Important: This information is correct as at the 19thof September 2018 and as available on the TPB website.  

By user23395, ago
Accounting

Study Accounting or Bookkeeping

10 Reasons Why You Should Study Accounting

According to our visitors, accounting is the most popular course over the years. Asan accountant, you are required to give information about the financial position and status of an organisation and it’s a very important job. An organization would not be able to handle financial decisions without them. Accountants are responsible for the financial situation of the company so you’ll have to make sure that money is flowing! Let’s find out why it’s so popular and why you should study it. View more details here for Bookkeeping and accounting course. If you have already completed a certificate IV course in account or bookkeeping you may qualify to study the Diploma of accounting, information available here on how to enrol in that accounting diploma.
  1. You need basic math skills

Accounting, these days is fully computerised. You don’t need to use complex formulas to calculate big numbers. Computers and specialised software do that for you. You still need to be good with numbers. Accountants now need to be able to have strong communication skills to be able to communicate with clients from various industries. If you still like the idea of completing bank reconciliation manually view this article. 
  1. Every industry needs an accountant

Think about it. In a business, they need someone to handle the money and accounts, deal with banks and taxes and so on. They need you if you are a professional with the right qualifications. It is not enough to just be able to have the skills to complete subsidiary accounts and ledgers
  1. You can start your own business or accountancy firm

You can be an entrepreneur if you are an accountant because it simply enables you to know the ins and outs of various industries and markets. If you are a highly qualified and professional accountant with the right skills and qualifications, you can be an independent accountant, have your own firm, and employ others.
  1. You can work abroad

With qualifications like ACCA, you can work in more than 120 countries. You might be attached to big firms that would want to send you to different countries. So, it is kind of a professional passport.
  1. More consultation, less number crunching

Accountants are not mathematicians, but they are advisors and bookkeepers for clients and a communicator. Having said that you still need to ensure you are aware of the latest technology when it comes to accounting or bookkeeping. 
  1. Seasons to make big money

During a financial year, you will be needed for auditing and assessment quarterly or at the end of the financial year. You will have to deal with taxation, speculation/predictions, and financial planning for the following season. This is a very busy time for accountants.
  1. Grow your connection with volunteer work
A lot of big organisations like (WHO, WFO, WWF, UN, Amnesty, and many others) need professionals to help and volunteer to do some work for them because they are always short on funds and get much of their work done through volunteers. You, as a qualified accountant volunteer, will meet high calibre individuals that can help you go far. They can write you a recommendation letter, connect you to other professionals, or even get a job with these organisations.
  1. A degree is not necessary

Accountancy is all about skills and professional qualifications. You can study on your own or enrol at an institution that offers the right qualifications. ACCA is a great way to get a job at a young age. It pays you well, and it is accepted in many countries around the world. One can even start studying accountancy right after SPM.
  1. Your skills are always in demand

Money is a basic requirement so jobs in finance like accountancy is always in demand. A finance professional is always needed by businesses and various industries. Where money is involved, an accountant is needed.
  1. Accounting is your Parachute

When hard times hit, companies tend to cut costs and lay off employees. Usually, the layoff process hits marketing, sales, and other departments. The accounting department is one that cannot afford to lose a member of their staff unless the qualifications are not there. Political changes also don’t impact much. If there is a change in policy, government or regulations, an accountant can always catch up with these changes. In fact, they might be the first to learn about the changes and adapt to them. However, nothing is guaranteed 100%, nothing is full-proof 100%; and in many cases, change might be necessary. If you don't want to study an accredited qualification, consider doing certain accounting and bookkeeping subjects.

By user23395, ago
Accounting

Top reasons to study accounting

Top reasons to study accounting (it’s more than just numbers…)

What do famous personalities like Sir Mick Jagger (The Rolling Stones), Julia Sweeney (American comedian and actress), Kenny G (saxophone extraordinaire) and Peter Falk (TV’s legendary detective Colombo) all have in common? Accounting – They either studied accounting or were professional accountants! Studying accounting - https://www.edna.edu.au/online-courses/certificate-iv-in-bookkeeping/ gives you a much broader perspective than additions and subtractions. Once you have completed that bookkeeping course you can graduate to a diploma of accounting by undertaking this course and receive an accredited qualification. Ask any student of accounting, and he/she will readily affirm that studying accounting is not just about the numbers. Their influence in business and society in general goes much beyond ledgers, balance sheets and numbers. As a student of accounting, you don’t necessarily need to end up working as a ‘traditional’ accountant, writing ledgers and preparing Profit & Loss Statements. Studying accounting opens the doors to a whole range of allied careers, including:
  • Finance Managers
  • Business Analysts
  • Business Managers
  • Investment Advisors
  • Risk Management Specialist
While the current workforce in accounting and related jobs is estimated at around 188,000 (as of November 2015), a 5-year projection by the Australian Government, in their Job Outlook (to November 2019) had estimated that there would be over 50,000 new job openings for accountants (and associated jobs). A revealing report by the Australian Workforce and Productivity Agency (AWPA), titled Demand and Supply of Accountants, sheds some interesting light on why you may wish to consider studying accounting, and what prospects lay ahead for you if you do decide to pursue a career as an accountant or a related profession.

Numbers DO matter

Australia Bureau of Statistics (ABS) statistics indicate that, not only is there a healthy demand for accountants, but that the median earnings for accountants track roughly 22% higher than the benchmark “All occupations”. These numbers confirm that studying accounting does bring you the benefit of great jobs, but also pay that’s relatively better than many of Accounting’s peer disciplines.

Age doesn’t matter

Accounting students, enrolled in a certificate, diploma or professional degree program today, should be heartened by the fact that they could be absorbed into the workforce shortly upon completing the course. ABS data shows that, while 31% of accountants are in the 25-34 year age group (compared to 22% for all other professions), studying accounting can also bring youngsters in the age group of 20-24 years into the workforce.  The need to fill the imminent void that will be left by retiring accountants (Boomers and Gen X’s) means you are more likely to position yourself to fill that void if you start your Accounting studies now!

Great employment potential

Studying accounting offers you great long-term potential for employment, whether you are an Australian student, or an overseas student studying accounting at an Australian institution. An Australian Department of Employment study indicated that: Studying accounting opens doors to employment: Over 86% of individuals with an accounting qualification were contributing members to the labour force, compared to 82.5% of individuals with other qualifications

By user23395, ago
Accounting

Bookkeeping | Accounting – BAS agents requirements

What are the requirements for me to register as a BAS Agent?

Navigating the BAS Agent registration requirements can be confusing, especially the primary qualification criteria, since the TPB website does not specify exactly which qualification comes under the Certificate IV in Financial Services in bookkeeping or accounting.

Which qualifications are accepted?

According to the TPB website, an applicant must hold at least:   Higher qualifications are also accepted – meaning if you hold a Diploma of Accounting, a Bachelor of Accounting or a Master of Accounting, it will satisfy the primary qualification requirement.

BAS Agent Registration Requirements

To register as a BAS Agent as an individual, you must satisfy a certain set of criteria, not just holding the accounting and bookkeeping certificate:
  • You must be at least 18 years old.
  • You must be a fit and proper person – this takes into account:
    • whether you are of good fame, integrity and character;
    • whether you have been convicted of an offence involving fraud or dishonesty;
    • whether you have been penalised for being a promoter of a tax exploitation scheme;
    • whether you have been penalised for implementing a scheme that has been promoted on the basis of conformity with a product ruling in a way that is materially different from that described in the product ruling;
    • whether you are an undischarged bankrupt; and
    • whether you have been sentenced to a term of imprisonment, or served a term of imprisonment in whole or in part.
Click here to find out more about this requirement and the definitions that apply.
  • You must satisfy the qualification and experience requirements – you must have:
    • successfully completed a Certificate IV in Accounting and Bookkeeping (or one of its superseded qualifications or higher) from a registered training organization or an equivalent institution;
    • must have completed a board-approved course in basic GST/BAS taxation principles (which may be included in the Certificate IV in Accounting and Bookkeeping); and
    • completed 1,400 hours of relevant work experience in the past 4-years.
  • You must maintain, or will be able to maintain, professional indemnity insurance cover that meets the TPB’s requirements.
  • You must complete an online application and provide the required supporting documents.
 

What happens after I submit my application with the TPB?

After you have submitted your application, the TPB will respond with a decision to either grant or reject your application for registration. You will usually hear from them within 30-days of submitting your application. If your application is approved, details of your registration will be recorded and published on the TPB register, you must inform the TPB of your professional indemnity insurance details within 14-days of approval, and the Australian Taxation Office will be notified that your registration has been approved. Alternatively, if your application is rejected, you will be advised of the reasons and of your appeal rights; and the ATO will be notified of the TPB’s decision to reject your registration. Important: This information is current as at the 19th of September 2018 and as available on the TPB website.  

By user23395, ago
Accounting

Accounting student Tax Guide to superannuation.

What is Superannuation?

Superannuation is payments made by your employer to a designated fund meant for your retirement. Your employer is required to pay 9.5% of your ordinary time earnings once you earn more than $450 in a calendar month, and up to $54,030 per quarter. This payment is a tax effective way for you to save up for your retirement and these funds can only be accessed once you have met preservation age.

Preservation age

Preservation age is the age you need to be before you are able to access your superannuation funds. If you were born before the 1st of July 1960, your preservation age is 55. This means when you reach the age of 55, you can access your superannuation benefits. If you were born between the 1st of July 1960 and 30th of June 1961, your preservation age is 56. If you were born between the 1st of July 1961 and 30th of June 1962, your preservation age is 57. If you were born between the 1st of July 1962 and 30th of June 1963, your preservation age is 58. If you were born between the 1st of Jul 1963 and 30th of June 1964, your preservation age is 59. Finally, if you were born after the 30th of June 1964, your preservation age is 60. There has been a lot of talk amongst the members of parliament to increase this preservation age right up till 70. However, this is not yet law and the change may never eventuate.

Can I add additional funds to my superannuation?

The answer is not a simple yes or no. You, as a superannuation account holder, can utilise several ways to add funds onto your super – pre-tax salary sacrifice, personal after-tax contributions, government contributions and by transferring funds from any of your foreign superannuation accounts. There are caps that you should be aware of before contributing extra funds into your superannuation account so be sure to take note of them and do not over-contribute or risk being penalised.

What are contribution caps?

Contribution caps limit the amount that can be added to your superannuation account each financial year. These caps are indexed annually and should you contribute more than the allowable cap, you may be liable for additional tax on the excess contributions. Learning more about contribution gaps and other related finance topics  by studying a Diploma of Accounting Online by visiting edna.edu.au to find out more about diploma of accoutning qualification Contribution caps vary depending on the type of funds you are adding to your superannuation account. For example, the concessional contributions cap from the 1st of July 2017 onwards is $25,000 for all individuals regardless of their age. From the 1st of July 2018, you can make ‘carry-forward’ concessional super contributions if you have a total superannuation balance of less than $500,000. Any unused concessional contribution caps can be rolled over for 5-years. With non-concessional contributions, from the 1st of July 2017, if you are between the age of 65 and 75, you have a yearly cap of $100,000. If you are under 65-years old, you are entitled to contribute up to $300,000 over a 3-year period. You can refer to the table at the bottom here for more information. If you exceed this cap, there is a tax of 47% levied on the excess contributions and will be personally liable for this tax. Speak to your accountant or financial adviser for individual advice.

Concessional contributions (pre-tax contributions)

Concessional contributions, or pre-tax contributions, are funds you or your employer make into your superannuation account that are taxed at a concessional rate of 15%. The most common type of concessional contributions are employer contributions, such as your superannuation guarantee (which is currently at a rate of 9.5%) and salary sacrifice contributions. These salary sacrifice contributions are not taxed before they are remitted into your superannuation account, this means you are not double-taxed for these funds. Salary sacrifice is a way for you to save up for your retirement and reduce your taxable income. For example, if you earn over $180,000 a year, instead of paying the highest tax bracket for your income, you could salary sacrifice a certain amount each month to reduce it. The funds salary sacrificed into your superannuation are then only taxed at a rate of 15% and not the highest tax rate. Be sure to observe the caps applicable for concessional contributions!

Non-concessional contributions (after-tax contributions)

Non-concessional contributions, also known as after-tax contributions, are funds you contribute into your superannuation account where no income tax deduction is claimed. Many people add more funds into their superannuation accounts through this way to ensure they have a sufficient amount of savings in retirement to live comfortably off. Please note, the information on this page is for educational purposes only and not served to be a guide or advice. Speak to your accountant or financial adviser for individual advice, another option is to become an accountant or bookkeeper yourself by taking accounting courses at edna.edu.au to learn the techniques and skills yourself

By user23395, ago
Accounting

Certificate IV in Accounting and Bookkeeping qualification

Is the Certificate IV in Accounting and Bookkeeping enough for me to register as a BAS Agent?

There have been many questions asked as to whether the new FNS40217 Certificate IV in Accounting and Bookkeeping meets the primary qualification requirement for one to register as a BAS Agent. The answer is, yes. However, there is more to the qualification requirement than simply the completion of the Certificate IV in Accounting and Bookkeeping course. There are more to the registration requirements than just the primary qualification factor. Details available here -www.edna.edu.au/online-courses/certificate-iv-in-bookkeeping/ In February, the Department of Education and Training announced the changes it has decided to make which affects, amongst other qualifications, the Certificate IV in Accounting and the Certificate IV in Bookkeeping. They have decided that, after thorough consultation with the industry, to combine the two qualifications and from the 14th of February 2019, the two qualifications were superseded by the Certificate IV in Accounting and Bookkeeping. You can also study the Diploma of accounting by clicking on the following link https://www.edna.edu.au/online-courses/diploma-of-accounting/  

Primary Qualification – BAS Agent

The Tax Practitioners Board is yet to update the information on their website to reflect the new qualification, although it has been confirmed that it is accepted as a primary qualification.

BAS Agent Registration Requirements

To register as a BAS Agent as an individual, you must satisfy a certain set of criteria, not just holding the accounting and bookkeeping certificate:  
  • You must be 18-years of age – you cannot be under 18 years old to apply.
  • You must be a fit and proper person – which takes into account whether you are of good fame, integrity and character; whether you have been convicted of an offence involving fraud or dishonesty; whether you have been penalized for being a promoter of a tax exploitation scheme; whether you have been penalized for implementing a scheme that has been promoted on the basis of conformity with a product ruling in a way that is materially different from that described in the product ruling; whether you are an undischarged bankrupt; and whether you have been sentenced to a term of imprisonment, or served a term of imprisonment in whole or in part. Click here to find out more about this requirement and the definitions that apply.
  • You must satisfy the qualification and experience requirements – you must have successfully completed a Certificate IV in Accounting and Bookkeeping (or higher) from a registered training organization or an equivalent institution, must have completed a board-approved course in basic GST/BAS taxation principles (which may be included in the Certificate IV in Accounting and Bookkeeping), and completed 1,400 hours of relevant work experience in the past 4-years.
  • You must maintain, or will be able to maintain, professional indemnity insurance cover that meets the TPB’s requirements.
  • You must complete an online application and provide the required supporting documents.
  Now that you know what the requirements are, you can a) start working towards achieving them, or b) register if you already meet the requirements!  

What happens when I finally lodge my application with the TPB?

After you have lodged your application, the TPB will respond with a decision to either grant or reject your application for registration. If your application is approved, details of your registration will be recorded and published on the TPB register, you must inform the TPB of your professional indemnity insurance details within 14-days of approval, and the Australian Taxation Office will be notified that your registration has been approved. Alternatively, if your application is rejected, you will be advised of the reasons and of your appeal rights; and the ATO will be notified of the TPB’s decision to reject your registration.   Important: This information is correct as at the 19th of September 2018 and as available on the TPB website. This information may change at any time. Please refer to the TPB website for more information.    

By user23395, ago
Accounting

Learning Accounting – declaring income tax in Australia

Income You Must Declare on your Tax Return

In Australia, when you earn an income, most likely you will have to declare that income on your tax return. With the advancement of data matching and reporting, most of this information is already pre-filled on your income tax return if you were to lodge your tax return online. However, at times, especially where you are a sole trader or you undertake cash jobs on the side, you will need to declare this income manually on your tax return. Let’s look at the different types of income you might have received.

Employment and foreign income

Simply put, employment income is money you earn from working. For some, they are paid cash in hand, others, directly into their nominated bank accounts. Regardless of whether you have one, two or three jobs; full-time, part-time or casual; it is your responsibility to make sure all of your employment income is included on your tax return.   Salary and wages include your normal weekly, fortnightly or monthly pay; commissions; bonuses; money for part-time or casual work; parental leave pay; payments from an income protection policy, sickness or accident insurance policy or a workers compensation scheme; pay and allowances for continuous full-time service in the Australian Naval, Army or Air Force Reserve; and foreign employment income.   Many people forget that the income they earn overseas must also be declared on your Australian tax return. Heavy penalties apply for not accurately declaring income on your tax. it can be a good idea to take basic accounting courses at edna.edu.au  if you are thinking about doing your taxes without the help of an accountant. Once you have mastered the basics you can move onto learning more advanced accounting principles by enroling in a diploma of accounting - details about this qualification can be found here.   

Super pensions and annuities

Any pensions and annuities received must be declared in your tax return. A superannuation pension generally is a series of regular payments made as a super income stream made by an Australian superannuation fund, life assurance company or retirement savings account provider. In each super income stream payment, there are three components which need to be declared – the taxed element, the untaxed element, and the tax-free component.   An annuity payment is generally a series of regular payments to you by a life insurance company in return for a lump sum payment. Most annuities have both taxable and tax-free components and the taxable portion of the payment will be included in your assessable income when received, this includes annuities received by you as a reversionary beneficiary.

Government payments

Any income received from the Australian Government such as the aged pension, carer payments, Austudy, Newstart and Youth Allowance must be declared on your tax return and can be taxable. Other payments such as the disability support pension, child disability allowance, carer adjustment payment and Veterans’ Affairs disability pensions and allowances must also be declared but you won’t have to pay any income tax on these payments.  

Investment income

Investment income needs to be declared whether or not it is paid directly to you or through distributions from a partnership or trust. Investment income such as interest payments, dividends, rent, managed investment funds and capital gains must be declared in your income tax return.  

Business, partnership and trust income

The net income you receive from carrying on a business is assessable income and you need to declare when submitting your tax return, this includes business you run as a sole trader and as a partnership. So whether you are an artist, a trades person, a jewelry maker, a baker, you will need to declare this income.   It is important to note that whilst a business partnership does not pay any tax on its income, it must lodge a partnership tax return declaring all income earned and all deductible expenses. It will show how the net income or loss was distributed between the partners and the individual partners must declare their individual share in their individual tax returns.   In a trust, the trustee is required to lodge a tax return for the trust. It is the beneficiaries’ duty to declare the amount of income they receive in their own tax returns and pay tax on it. The only exception to this is a family trust distribution tax has already been paid. It is best to speak to your accountant about this.  

Crowdfunding

Interestingly, as more and more people use crowdfunding for their own personal purposes, the tax office has now released guidelines as to whether you are required to pay income tax on the amount received. If you earn or receive money through crowdfunding, some or all of it may be assessable income. This will depend on the nature of the agreement, your role in it and your circumstances. Speak to your accountant for more information. Still want to learn more check out this article  how bookkeeper and accoutnattns laern subsidiary accounts and ledgers

By user23395, ago