Preface

Who should read this book?

This book is aimed squarely at the small business operator, often a home-based business, with an annual turnover of less than $2 million. Why less than $2 million? Because that is what the Australian Taxation Office (ATO) uses to define a small business entity that can use cash accounting methods for the purposes of calculating its goods and services tax (GST) and income tax liability. Small businesses with a turnover in excess of $2 million but less than $20 million, classified as small to medium enterprises (SMEs), are required to use accrual accounting, both for Tax Office purposes and to conform with Australian accounting standards. As the concept of accrual accounting is covered in this book, SME operators will also find this book an invaluable resource.

What will I learn?

This book will teach you how to keep cash-based manual accounting records that satisfy your needs for the calculation of your quarterly GST liability and can also be used by your accountant when preparing your annual income tax return. Helpful examples are included, along with useful exercises, all accompanied by a full worked solution. Each exercise has its own set of blank forms, formatted specifically for the requirements of that task. A full set can also be downloaded from my website www.tpabusiness.com.au.

This book as a lecturer’s resource

If you are intending to use this book for a nonaccredited introduction to bookkeeping course, the duration of which is most likely to be six weeks, the seven-day structure that I have designed can still be organised into a six-session module according to your students’ needs. Since most students will not be purchasing inventory or making sales on credit terms, the topics discussed under day 5 can be referred to in passing and the material in day 7 can form the basis of your final class. On the other hand, if you have students who need to know how to account for credit purchases and sales, then include day 5 in your course and explain that the material covered under day 7 is for additional reading after the course is completed.

Additional resources such as PDF versions of the exercise solutions and an online computer-based learning tool are available on my website www.tpabusiness.com.au.

Rod Caldwell

Perth

March 2010