 Introduction to bookkeeping and accounting

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# 1 Essential numerical skills required for bookkeeping and accounting

Expertise in mathematics is not required to succeed as a bookkeeper or an accountant. What is needed, however, is the confidence and ability to be able to add, subtract, multiply, divide as well as use decimals, fractions and percentages. Competent bookkeepers and accountants should be able to use mental calculations as well as a calculator to perform these numerical skills. The ability to use a calculator effectively is as important- as the ability to use a spreadsheet program.

The material in this section covers the essential numerical skills of addition, subtraction, multiplication, division, through to decimals, percentages, fractions and negative numbers. You are expected to use a calculator for most of the activities but you are also encouraged to use mental calculations. In the modern world, the assumption is that we use calculators to avoid the tedious process of working out calculations by hand or mentally. The danger, of course, is that you may use a calculator without understanding what an answer means or how it relates to the numbers that have been used. For example, if you calculate that 10% of £90 is £900 (which can easily happen if either you forget to press the per-cent key or it is not pressed hard enough), you should immediately notice that something is very wrong.

Using a calculator requires an understanding of what functions the buttons perform and in which order to carry out the calculations. Your need to study this material is dependent on your mathematical background. If you feel weak or rusty on basic arithmetic or maths, you should find this material helpful. The directions and symbols used will be those found on most standard calculators. (If you find that any of the instructions contained in this material do not produce the answer you expected, please follow the instructions of your calculator.)

There are four basic operations between numbers, each of which has its own notation:

• Addition 7 + 34 = 41
• Subtraction 34 – 7 = 27
• Multiplication 21 x 3 = 63, or 21 * 3 = 63
• Division 21 ÷ 3 = 7, or 21 / 3 = 7

The next section will examine the application of these operations and the correct presentation of the results arising from them.

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