Account System and Process

Running head: ACCOUNT SYSTEM AND PROCESS
Account system and process
Name of the student
Name of the university
Student ID
Author note

1ACCOUNT SYSTEM AND PROCESS
Table of Contents
Question 1..................................................................................................................................2
(a) Memo...........................................................................................................................2
(b) Journal entries..............................................................................................................3
Answer 2....................................................................................................................................8
Introduction............................................................................................................................8
XERO cloud based accounting system..................................................................................8
Using Xero for tracking business...........................................................................................9
Using Xero in accounting for inventory...............................................................................10
Other features beneficial to Mr and Mrs Spot......................................................................10
Conclusion............................................................................................................................11
Answer 3..................................................................................................................................11
Question 4................................................................................................................................13
Question 5................................................................................................................................13
Reference and bibliography.....................................................................................................16

2ACCOUNT SYSTEM AND PROCESS
Question 1
(a) Memo
To: Mr and Mrs Spot
From: Accountant
Subject: explaining different methods of inventory
I am writing this report to explain you different types of inventory management systems those
can be used for inventories. These are as follows –
Periodic inventory system – under this, the updates are made only to the closing inventory
while the count for physical inventory is performed. As the physical counts are time taking
this is done more than once in a year.
Perpetual inventory system – perpetual inventory method for accounting records all the sales
and purchases immediately when they take place. It provides detailed view regarding changes
in the inventory with the immediate reporting of inventory amount in the stock.
First in first out method – under this method the goods purchased 1st are sold removed 1st
from the inventory count. Hence, the remaining stock of inventory is priced at most recent
cost incurred for purchasing them.
Weighted average method – under this method total COGS of available goods is divided by
number of units available and it yields weighted average cost per unit.
Hope the above provided solution will help you is understanding difference among different
systems of inventory management.
Sincerely,
Andrew Johnson, Accountant

3ACCOUNT SYSTEM AND PROCESS
(b) Journal entries
Journal entries as per periodic inventory
Date Particulars Debit Credit
01-Jan-18 Cash a/c $ 20,000.00
Share capital $ 20,000.00
01-Jan-18 Bank a/c $ 20,000.00
Cash $ 20,000.00
03-Jan-18 Inventory $ 2,400.00
Accounts payable $ 2,400.00
06-Jan-18 Accounts receivable $ 1,600.00
Raibow prescholl $ 1,600.00
09-Jan-18 Inventory $ 2,100.00
Bank $ 2,100.00