Bookkeeping Competencies

Definition of bookkeeping, and the order of the bookkeeping process

Chart of accounts – definition and categories, as well as:

• assets (definition, purpose, normal balance, current vs. capital)
• liabilities (definition, purpose, normal balance, short-term vs. long-term)
• equity (definition, purpose, normal balance)
• revenue (definition, purpose, normal balance)
• expenses (definition, purpose, normal balance, grouping (COGS vs. payroll vs. general and admin)
• contra accounts and control accounts (definitions, comprehension)

Determining financial vs. non-financial transactions

Source documents (definition, purpose)

Terms of a sale (definition, types, i.e. 2% 10, Net 30, C.O.D.)

T-accounts (definition, purpose)

GST/HST basics (definitions, separation vs. inclusion in transaction totals)

Recording transactions in sub-ledgers (accounts payable and accounts receivable)

General ledger records (definition, purpose)

Subledger records (A/P and A/R – definition, purpose)

Credit limits (definition, basic comprehension)

Accounts payable: purchase orders, invoices and payments (definitions where applicable, understanding of each type of transaction and its purpose, recording of each transaction type)

Accounts receivable: estimates, invoices and receipts (definitions where applicable, understanding of each type of transaction and its purpose, recording of each transaction type)

Trial balance report (definition, purpose, process to create)

Assets: tangible vs. intangible (definition, purpose)

Accrual vs. cash-basis accounting

Control accounts (definition, purpose, effect of sub-ledger postings)

Different ownership structures (definition, effect on chart of accounts)

Shareholder loans (performing basic transactions for purchases and paybacks)

Accounts payable & accounts receivable (refunds and credits, definition and processing)

Gift cards/gift certificates (definition, basic understanding of process)

Inventory basics:

• definitions of inventory methods
• effects of buying and selling on the chart of accounts
• basic transaction processing for buying and selling inventory items
• understanding of back-orders
• adjustment entries resulting from an inventory count or a customer return

Payroll basics:

• definition of basic payroll terms
• basic payroll processing (EI, CPP and tax deductions, vacation pay calculations/handling)

Payroll remittances (understanding of payroll remittances and thresholds)

GST/HST (processing of remittances that do not require adjustments)

Bank reconciliations (purpose, processing of basic bank reconciliations, knowledge re: inability to reconcile)

General journal (definition, purpose, examples of use)

General ledger (definition, use as a resource)

Month-end closing concepts (including bank reconciliation reporting, entering of prepaid expenses)

Balance sheet (definition, purpose, process to create)

Income statement (definition, purpose, process to create)

Adjustment of prepaid expenses to expenses (purpose, processing)

Loans and lines of credit (current vs. long-term accounts)

Vendor/customer accounts (reconciliations and verification of statements)

Credit card reconciliations (purpose, processing, troubleshoot reconciliation differences)

Owner’s accounts (personal credit card expenses, impact of transactions on owner’s accounts)

Petty cash reconciliations (purpose, replenishing of funds, processing entries, troubleshoot reconciliation differences)

Payroll (processing transactions that include taxable benefits, group benefits, statutory holiday pay and garnishees)

Payroll remittances for thresholds 1 & 2 (definition and knowledge, processing)

Payroll year-end: T4’s and T4 summary (definition, processing, identifying discrepancies)

Employee’s out-of-pocket expenses (understanding of requirements, processing of transactions)

Gift cards (handling customer returns of an item)

Inventory (assist with inventory discrepancies, processing transactions for adjustments)

GST/HST (importance of filing procedures and deadlines, comprehension of remittance forms, quick method of filing)

Due to/from accounts: inter-company relationships (purpose, processing transactions)

Accurately set up a new company’s basic set of books in a software program

Produce a balance sheet and income statement, spot oddities, and know who to speak to about them

Month-end (knowledge of tasks involved and able to carry them out)

Year-ends:

• knowledge of tasks involved
• communicate with accountant re: their requirements
• prepare a preliminary year-end set of books for a supervisor or accountant, including explanations where needed and queries of items needing attention
• posting of accountant’s year-end adjusting entries (to be reviewed by supervisor or accountant)
• comprehension of effects of accountant’s year-end adjusting entries on subledgers

Prepaid expense transactions

Loans and lines of credit (current and long-term reconciliations)

Credit card usage (aware of costs to company, advise on improved processes or options)

Foreign currency (re-value transactions, report balances to accommodate exchange rates)

Owner’s accounts (reconcile and troubleshoot reconciliation differences, advise and educate company owners on management, adverse effects of their actions on these accounts to include sole proprietorships, partnerships, and corporations)

Payroll (process varying levels of payroll with multiple requirements for all thresholds and remittances including reconciliations to CRA balances)

Payroll year-end: T4’s/T4 summary (processing of both, correct discrepancies)

T4A and T5018 reporting (definitions, purpose, processing, correct discrepancies)

Inventory (identify discrepancies and possible causes, process correcting entries)

3rd party software reconciliations (reconcile general ledger accounts to 3rd party software - i.e. point-of-sale software, inventory management software, etc.)

Business processes (identify efficiency improvements for a customer’s company, recommend changes and assist in implementation of changes

GST/HST/PST (awareness of customer claims and their filing requirements, filing amendments, reconcile against federal and provincial governing accounts)

Workers’ compensation groups (information required for filing, deadlines, preparing remittances, handling refunds)

Due to/from accounts: inter-company relationships (reconciling)

Ratios (basic/typical, what they are used for)

Definitions of basic key performance indicators (KPIs). i.e. A/R, A/P, gross margin, etc.

Accurately set up a new or existing company’s complete set of books in a software program or modify/revise a set of books for an existing company where necessary

Produce a set of financial statements, spot oddities, know who to speak to about them when necessary, perform corrections

Month-end (create month-end processes where nonexistent and recommend best practices)

Audits from governing bodies – obtain online access when applicable / identify discrepancies / perform corrections

Year-ends:

• create year-end processes where nonexistent
• recommend best practices
• prepare a draft year-end set of books for an accountant with notes
• process bad debts
• post accountant’s year-end adjusting entries unsupervised
• balance company books to accountant’s set
• identify adverse effects on subledgers
• communicate with accountant regarding any discrepancies
• review year-end books with customer (before or after accountant’s Y/E adjusting entries)
• produce full-cycle bookkeeping reports based on customer/accountant/CRA requirements