1. Creative Cycle Online Entrepreneurship Project Session Three: Introduction to Accounting and Excel

2. Aims of the session Learn basic Excel skills Understand how Accounting works and learn the keywords used in spreadsheets. Make more informed business decisions using what has been taught.CREATIVE CYCLE ONLINE ENTREPRENEURSHIP PROJECT 3. What is Excel? Excel is a program used to organise and manipulatedata. It is possible to either enter some data in or enter a formula in. It is very useful to check what happens when there are changes in the data.CREATIVE CYCLE ONLINE ENTREPRENEURSHIP PROJECT 4. How to use it? Entering data: For example, if you want to change the Paypal fees,click on the corresponding cell (E25 in this case) and enter the new number.CREATIVE CYCLE ONLINE ENTREPRENEURSHIP PROJECT 5. How to use it? Entering a formula:The cell G27, corresponding to total expenses. It has the formula: =E22+E23+E24+E25+E26+E27 (dont forget the equal sign at the start!) That way if any of the expenses changes, total expenses changes automatically. CREATIVE CYCLE ONLINE ENTREPRENEURSHIP PROJECT 6. What is Accounting? Accounting is the process of keeping financial accounts. In the next few slides we will take a step by step approach to gradually teach you the basics of accounting. You will then go through an example question similar to real life conditions.CREATIVE CYCLE ONLINE ENTREPRENEURSHIP PROJECT 7. Accounting: What changes? You spend 50.00 on pearls to make necklaces and manage to sell all the necklaces that were produced for 100.00. Increase Purchases to 50 Increase Sales to 100 Increase Cash at Hand to 100-50=50CREATIVE CYCLE ONLINE ENTREPRENEURSHIP PROJECT 8. Accounting: What changes? Instead of buying the pearls with cash, you buy them on credit. You havent yet received the money for a quarter of the necklaces. Increase Creditors to 50 Increase Debtor to 100*()= 25 Increase Cash at hand to 50+50-25=75CREATIVE CYCLE ONLINE ENTREPRENEURSHIP PROJECT 9. Accounting: What changes? Unfortunately, instead of selling all of the necklaces made this year, you are left with unsold pearls worth 10. As a result your sales are only 80 this year. Of these 80 you are owed 15 . Increase Closing Inventory to 10 Decrease Sales to 80 Change Cash in hand to 65 Change Debtors to 15 CREATIVE CYCLE ONLINE ENTREPRENEURSHIP PROJECT 10. Accounting: What changes? You realise that you forgot to account for pendants that you bought last year for 20 but didnt manage to sell. Fortunately you managed to get rid of them at their face value (20). Sales increase by 20 to100. Opening inventory increases to 20.CREATIVE CYCLE ONLINE ENTREPRENEURSHIP PROJECT 11. Accounting: What changes? Last year you made the acquisition of a machine that allows the making of necklaces faster. It cost 500 which you paid for entirely by borrowing for 10 years. Increase machine to 500 Increase loans to 500CREATIVE CYCLE ONLINE ENTREPRENEURSHIP PROJECT 12. Accounting: What changes? You have to pay interest on your loan. The rate is 4% per year. You pay it using the bank as an intermediary. You also decide to transfer 30 of your cash at hand to your bank account. Interest expense increase by 0.04*500= 20 Cash at hand: 65-30= 35 Cash at bank: 30-20= 10CREATIVE CYCLE ONLINE ENTREPRENEURSHIP PROJECT