Part B: Executive Summary The present report has been developed for demonstrating the use of cloud based accounting system for managing the accounting transactions of a regional accounting firm, that is, ‘Goodie Gumdrops’, a start-up wholesaler. The report is prepared on the perspective of an accountant working in the firm having the responsibility of establishing the AIS (Accounting Information System) and entering the first month accounting transactions into the system. The report has developed and presented the profit & loss, balance sheet, trial balance, aged payable and receivables and inventory item summary though the use of AIS for assisting the business start-up for the client. The use of information technologies and devices are rapidly transforming the ways through which businesses operate and mange their operational activities. The accounting field cannot make an exception for considering the progress realized by the businesses through the use of computing technologies. The Goodie Gumdrops can achieve various benefits through the use of cloud computing systems over traditional accounting. The use of cloud computing can increase the accessibility of the financial information via an internet connection. On the other hand, traditional accounting system will requires the business firm to possess a hard drive for storing and recording the financial data. The cloud computing also enables the employees to work from distant locations and communicate with each other through the use of AIS system that is not possible through the use of traditional accounting. There is also increase in the accuracy, backups, and speed of accounting operations through the use of cloud based accounting system as compared to the traditional approach. The cloud based accounting system will also prove to be cost-effective for the Goodie Gumdrops in long-run in comparison to the traditional accounting system (Rangarajun and Kennedy, 2012). This is because traditional accounting system requires manually recording and storing of accounting data that requires upfront fees for hardware packages and requires a contract commitment. Thus, on the basis of above benefits provided by cloud computing system it is recommended to the Goodie Gumdrops to adopt the cloud based computing system for managing its accounting transactions smoothly and easily. The business firm is a start-up and thus it is essential for it to manage its accounting transactions effectively for achieving growth and
sustainability. As such, cloud based accounting system will help the firm to record its financial transactions properly and ease up managing its business processes. Part A This part of the report depicts the processing of client transactions through the use of cloud based accounting system. The financial reports developed through the use of computerized based accounting system for July 2017 are as follows: Profit & Loss As depicted, the use of cloud based computing system has aggregated all the sales and expenditure in a small number of rows for enhancing the visibility of major issues. The cloud computingsystemhasenabledthegroupingofaccountsofsalesandexpenditurethus streamlining the preparation of financial statements. The sales and expenses are divided into separate categories for ensuring that each row is easily understood by the end-users. The use of cloud based system has enabled the development of an effective reporting structure for depicting the profit and loss statement that can be used at customer, department or a business unit level. The accounting software system also proves to be largely useful in fostering the changes in the reporting structure due to restructuring, new product lines or mergers and acquisitions (Terkper, 2008). Balance Sheet
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