Spread sheet recordings

After studying this module the trainees will be able to understand:

• Concept of Spreadsheet and its features.

• How to use excel Spreadsheet for accounting especially payroll recording

What is a spreadsheet?

A spreadsheet is a computer program that can capture, display and manipulate data arranged in
rows and columns. Spreadsheets are one of the most popular tools available with personal
computers.

A spreadsheet is generally designed to hold numerical data and short text strings. In a
spreadsheet program, spaces that hold items of data are called spreadsheet cells. These can be
renamed to better reflect the data they hold and can be cross-referenced through row numbers
and column letters.

Rows are horizontal vectors while columns are vertical vectors. A spreadsheet is also known as a
worksheet. It is used to record, calculate and compare numerical or financial data. Each value
can either be an independent (i.e. basic) value or it may be derived on the basis of values of other
variables. The derived value is the outcome of an arithmetic expression and/or a function (i.e. a
formula). Spreadsheet application (sometimes referred to simply as spreadsheet) allows us to add
(i.e. enter) and process data. We shall understand spreadsheet with the help of MS-Excel (or
simply, Excel), which is one of the Microsoft Office Suite of software.

A file in Excel is known as a “Workbook”. A workbook is a collection of a number of

“Worksheets”. By default, three sheets, namely Sheet 1, Sheet 2, and Sheet 3 are available to
users. At a time, only one worksheet can be made as “Active Worksheet” and that worksheet is
available to a user for carrying out operations. An active worksheet’s name will be shown in bold
letters in the “Sheet Tab” at the bottom left of the screen. Additional sheets can be added, if
required.
. Computerized spreadsheets have changed the way companies handle the information of their
business operations. Microsoft Excel is the primary spreadsheet program used in business today
for managing and reporting information. Spreadsheets are primarily used for financial
information reported from business operations, greatly improving the accuracy of the accounting
department. Some businesses also create invoices from the accounting spreadsheets.

Most financial spreadsheet functions are relatively easy to perform. Accountants are able to
process large amounts of data by using spreadsheets that perform basic calculations, saving time
and creating fewer mathematical errors. Spreadsheets can also be emailed to other departments
or saved on a network system for use by other workstations in a company.

Almost all accounting functions can be processed by financial spreadsheets: budgets,

depreciation schedules, account reviews and financial statements. Preparing this information
usually requires a standard spreadsheet form to be created, and then the financial information can
be input from department paperwork. The standard form is then saved each month for ease of
review on a monthly or yearly basis.

Analyzing financial information from spreadsheets is a quick and simple process once the
accounting process is complete. A standard spreadsheet of financial ratios can be created with
the information filling directly from the accounting spreadsheets. This saves management
countless hours of poring through information to find the numbers needed for the ratios.
Financial statements can also be created by linking the financial statement spreadsheet to other
spreadsheets, automatically filling in the information.

So far we have seen that spreadsheet lends support to a number of areas of accounting and
finance. This section describes its applications in Pay roll accounting, and Depreciation
accounting, to illustrate the capability of spreadsheet to enable computer based accounting.

Group Activity

Using the excel spreadsheet application; prepare a pay roll sheet based on the data given below
considering Ethiopian employment tax law.

Addis Tire factory, a public business organization, pays the salary of its employees according to the
Ethiopian calendar month. The forth-coming data related to the month of Hidar, 20014
S.N Name of Employee Basic Monthly OT hours Duration of work
salary Transport worked
allowance

01 Abebe Kebede 9800 800 15 Up to 10 P.M.

02 Fatuma Ali 6500 400 12 6 hours up to 10 P.M.

6 hours on public holiday

03 G/Medihin Alemu 4600 _____ 6 Weekly Rest days

04 Selamawit Teshome 3500 600 _____ ______

05 Tesema Tollosa 5400 500 20 15 hours on weekly rest days

and

5 hours during public

holidays

Additional information

The management of the organization usually expects all workers to work 160 hours in a month
and during the month of Hidar 2014 all workers have done as expected. Besides, all workers of
the organization are permanent employees except G/Medhin.

Fatuma and Abebe agreed to contribute monthly of Birr 100 each for a charity organization
(Mekedoniya).

Instructions: Based on the above information

1. prepare a payroll register for the organization for the month of Hidar 2014