Accounting System and Process (Doc)
Added on 2020-02-24
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RUNNING HEAD: ACCOUNTING SYSTEMS AND PROCESSES
ACCOUNTING SYSTEMS AND PROCESSES
ACCOUNTING SYSTEMS AND PROCESSES
ACCOUNTING SYSTEMS AND PROCESSES1
Contents
Q.1......................................................................................................................... 2
Q.2......................................................................................................................... 2
Q.3......................................................................................................................... 3
Q.4......................................................................................................................... 5
Q.5......................................................................................................................... 6
Q.6......................................................................................................................... 7
Q.7....................................................................................................................... 16
Q.8....................................................................................................................... 21
Q.9....................................................................................................................... 23
Q.10..................................................................................................................... 24
Q.11..................................................................................................................... 25
Q.12..................................................................................................................... 26
Q.13..................................................................................................................... 28
REFERENCES........................................................................................................ 35
Contents
Q.1......................................................................................................................... 2
Q.2......................................................................................................................... 2
Q.3......................................................................................................................... 3
Q.4......................................................................................................................... 5
Q.5......................................................................................................................... 6
Q.6......................................................................................................................... 7
Q.7....................................................................................................................... 16
Q.8....................................................................................................................... 21
Q.9....................................................................................................................... 23
Q.10..................................................................................................................... 24
Q.11..................................................................................................................... 25
Q.12..................................................................................................................... 26
Q.13..................................................................................................................... 28
REFERENCES........................................................................................................ 35
ACCOUNTING SYSTEMS AND PROCESSES2
Q.1.
The requirement of replacing cell reference in excel sheet with names is just to make it look
tranquil and simpler and also to make it comprehend the concept of using of formula. With
this function any individual can be able to deal with the data as well as analyse the data very
smoothly and easily. Further naming cells in spreadsheets will be very useful for the
individual for the identification of the values. Therefore, below instances of naming reference
in spreadsheets will be used by the individual for his simplicity (Microsoft, 2017).
Example No name With name
Table A4:A22 =Quarterexpenses
Reference =SUM(A4:A13) =SUM(Quarterperiodexpenses)
Spreadsheet
Example:
Normal View:
Owners’
Equity Liabilities Assets
185000 55000 240000
Formula View:
Owners’ Equity Liabilities Assets
185000 55000
=Owners_Equity+Lia
bilities
Q.2.
Parentheses is called as brackets in spreadsheet. In accountancy, negative numbers normally
disclose credit amounts. Negative figures can be represented in many ways such as minus
signs, applying red colour or using brackets to the values. Although many formats are used
but using of brackets for denoting negative figures is categorized as standard format or
Q.1.
The requirement of replacing cell reference in excel sheet with names is just to make it look
tranquil and simpler and also to make it comprehend the concept of using of formula. With
this function any individual can be able to deal with the data as well as analyse the data very
smoothly and easily. Further naming cells in spreadsheets will be very useful for the
individual for the identification of the values. Therefore, below instances of naming reference
in spreadsheets will be used by the individual for his simplicity (Microsoft, 2017).
Example No name With name
Table A4:A22 =Quarterexpenses
Reference =SUM(A4:A13) =SUM(Quarterperiodexpenses)
Spreadsheet
Example:
Normal View:
Owners’
Equity Liabilities Assets
185000 55000 240000
Formula View:
Owners’ Equity Liabilities Assets
185000 55000
=Owners_Equity+Lia
bilities
Q.2.
Parentheses is called as brackets in spreadsheet. In accountancy, negative numbers normally
disclose credit amounts. Negative figures can be represented in many ways such as minus
signs, applying red colour or using brackets to the values. Although many formats are used
but using of brackets for denoting negative figures is categorized as standard format or
ACCOUNTING SYSTEMS AND PROCESSES3
brackets can easily highlight the credit entries in the calculation. Further, negative amounts
can be identified very easily through using of brackets (Microsoft, 2017).
Spreadsheet
Example:
Particulars Amount
Gross Profit
$
1,00,000.00
Operating Expenses ($26,000.00)
EBIT
$
74,000.00
Interest ($15,000.00)
EBT
$
59,000.00
Taxes ($9,000.00)
EAT/Profit after tax
$
50,000.00
Q.3.
Accountant of the company should always design spreadsheets with a completely separate
data entry area and separate report area because to show clarity about the company’s financial
stability and also to provide a better picture to the users of the financial statements. Further it
can also be said that accountants can use the workbook for the purpose of lengthy
calculations by applying formulae’s and other functions. Another reason is that any data can
be inserted in the spreadsheet without any changes in the whole data and also any deletion in
the data can be made with ease and simplicity. Then all the data will be incorporated into the
report area.
Hence, separation of data entry and report area will fetch benefits and financial stability will
be easily assessed.
Spreadsheet
Example:
brackets can easily highlight the credit entries in the calculation. Further, negative amounts
can be identified very easily through using of brackets (Microsoft, 2017).
Spreadsheet
Example:
Particulars Amount
Gross Profit
$
1,00,000.00
Operating Expenses ($26,000.00)
EBIT
$
74,000.00
Interest ($15,000.00)
EBT
$
59,000.00
Taxes ($9,000.00)
EAT/Profit after tax
$
50,000.00
Q.3.
Accountant of the company should always design spreadsheets with a completely separate
data entry area and separate report area because to show clarity about the company’s financial
stability and also to provide a better picture to the users of the financial statements. Further it
can also be said that accountants can use the workbook for the purpose of lengthy
calculations by applying formulae’s and other functions. Another reason is that any data can
be inserted in the spreadsheet without any changes in the whole data and also any deletion in
the data can be made with ease and simplicity. Then all the data will be incorporated into the
report area.
Hence, separation of data entry and report area will fetch benefits and financial stability will
be easily assessed.
Spreadsheet
Example:
ACCOUNTING SYSTEMS AND PROCESSES4
Normal View:
Century Ltd
Income Statement
For the year ended 31 March 2017
Particulars Amount
Incomes
Revenue 500000
Other Income 78500
Total (A) 578500
Expenses
Wages paid 58000
Depreciation 26500
Advertisement 1500
General Expenses 6900
Light and Power 8500
Audit Fees 9500
Total (B) 110900
Profit Before Tax (A-B) 467600
Tax 5400
Profit after Tax 462200
Formula View:
Century Ltd
Income Statement
For the year ended 31 March 2017
Particulars Amount
Incomes
Revenue 500000
Other Income 78500
Total (A) =SUM(J7:J8)
Expenses
Wages paid 58000
Depreciation 26500
Advertisement 1500
General Expenses 6900
Light and Power 8500
Audit Fees 9500
Normal View:
Century Ltd
Income Statement
For the year ended 31 March 2017
Particulars Amount
Incomes
Revenue 500000
Other Income 78500
Total (A) 578500
Expenses
Wages paid 58000
Depreciation 26500
Advertisement 1500
General Expenses 6900
Light and Power 8500
Audit Fees 9500
Total (B) 110900
Profit Before Tax (A-B) 467600
Tax 5400
Profit after Tax 462200
Formula View:
Century Ltd
Income Statement
For the year ended 31 March 2017
Particulars Amount
Incomes
Revenue 500000
Other Income 78500
Total (A) =SUM(J7:J8)
Expenses
Wages paid 58000
Depreciation 26500
Advertisement 1500
General Expenses 6900
Light and Power 8500
Audit Fees 9500
ACCOUNTING SYSTEMS AND PROCESSES5
Total (B) =SUM(J11:J16)
Profit Before Tax (A-B) =J9-J17
Tax 5400
Profit after Tax =J18-J19
Q.4.
IF Function is considered as a logical function in Excel and can be used as formula in
spreadsheet. IF function evaluates one value if the condition is TRUE and evaluates another
value if the condition is FALSE (Microsoft, 2017).
The syntax of IF function is:
Spreadsheet
Example:
Normal View:
Century Ltd
Trial Balance
For the year 31 March 2017
Account Debit Credit
Share Capital 20,000
Furniture & Fixture 8,000
Building 15,000
Creditor 8,000
Debtors 7,000
Cash 10,000
Sales 28,000
Cost of sales 10,000
General and Administration Expense 6,000
TOTAL 56,000 56,000 TRUE
Formula View:
Century Ltd
Trial Balance
Total (B) =SUM(J11:J16)
Profit Before Tax (A-B) =J9-J17
Tax 5400
Profit after Tax =J18-J19
Q.4.
IF Function is considered as a logical function in Excel and can be used as formula in
spreadsheet. IF function evaluates one value if the condition is TRUE and evaluates another
value if the condition is FALSE (Microsoft, 2017).
The syntax of IF function is:
Spreadsheet
Example:
Normal View:
Century Ltd
Trial Balance
For the year 31 March 2017
Account Debit Credit
Share Capital 20,000
Furniture & Fixture 8,000
Building 15,000
Creditor 8,000
Debtors 7,000
Cash 10,000
Sales 28,000
Cost of sales 10,000
General and Administration Expense 6,000
TOTAL 56,000 56,000 TRUE
Formula View:
Century Ltd
Trial Balance
ACCOUNTING SYSTEMS AND PROCESSES6
For the year 31 March 2017
Account Debit Credit
Share Capital 20000
Furniture & Fixture 8000
Building 15000
Creditor 8000
Debtors 7000
Cash 10000
Sales 28000
Cost of sales 10000
General and
Administration Expense 6000
TOTAL =SUM(M6:
M14)
=SUM(N6:
N14)
=IF(M15=N15,"TRUE","F
ALSE")
Q.5.
The periodic system is an inventory valuation system in which books of accounts are not
updated on every sales and purchases made but books of accounts will be updated at the end
of accounting period. Further in periodic inventory system, no accounting for wastages, loss
and scraps are done. This type of inventory valuation is typically used by the small businesses
(Stevenson & Hojati, 2007).
Spreadsheet
Example:
Date
Particular
s
Amount
($)
01-04-
2017
Opening
inventory
(500 units
at $ 12
each) 6000
15-04-
2017 Purchase
(800 units
at $ 12
each) 9600
22-04-
2017 Sales
(900 units
at $ 20
each) 18000
30-04-
2017
Closing
inventory
(400 units
at $ 12
each) 4800
For the year 31 March 2017
Account Debit Credit
Share Capital 20000
Furniture & Fixture 8000
Building 15000
Creditor 8000
Debtors 7000
Cash 10000
Sales 28000
Cost of sales 10000
General and
Administration Expense 6000
TOTAL =SUM(M6:
M14)
=SUM(N6:
N14)
=IF(M15=N15,"TRUE","F
ALSE")
Q.5.
The periodic system is an inventory valuation system in which books of accounts are not
updated on every sales and purchases made but books of accounts will be updated at the end
of accounting period. Further in periodic inventory system, no accounting for wastages, loss
and scraps are done. This type of inventory valuation is typically used by the small businesses
(Stevenson & Hojati, 2007).
Spreadsheet
Example:
Date
Particular
s
Amount
($)
01-04-
2017
Opening
inventory
(500 units
at $ 12
each) 6000
15-04-
2017 Purchase
(800 units
at $ 12
each) 9600
22-04-
2017 Sales
(900 units
at $ 20
each) 18000
30-04-
2017
Closing
inventory
(400 units
at $ 12
each) 4800
ACCOUNTING SYSTEMS AND PROCESSES7
Periodic inventory system:
Particulars Amount ($) Particulars Amount ($)
Opening Inventory 6000 Sales 18000
Purchase 9600 Closing Inventory 4800
Gross profit 7200
Total 22800 Total 22800
Q.6.
A. Used Camscanner for the handwritten solution.
Report
Periodic inventory system:
Particulars Amount ($) Particulars Amount ($)
Opening Inventory 6000 Sales 18000
Purchase 9600 Closing Inventory 4800
Gross profit 7200
Total 22800 Total 22800
Q.6.
A. Used Camscanner for the handwritten solution.
Report
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