Accounting 2017: Software Installation, Principles, and Analysis

This document presents a detailed solution to an accounting assignment, covering the critical aspects of accounting software installation, key accounting principles, and the structure of a company's chart of accounts. The assignment explores the necessary steps for effective software implementation, emphasizing the importance of planning, market research, hardware configuration, and employee training. It delves into core accounting principles, including the double-entry system, accrual accounting, and the qualities of financial statement information. Furthermore, the solution examines the process of setting up a company's chart of accounts, considering accounting systems, subsidiary accounts, and methods for improvement. The solution is well-structured, and includes a comprehensive list of references to support its claims and analysis.

Accounting

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By student name
Professor
Date: 17 September, 2017.
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Contents
Written Activity 1………………………………………………………………………........3
Written Activity 2………………………………………………………………………........6
Refrences……………………………..……………………………………………..................7
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Written Activity 1
1) Installation of the accounting software requires a lot of skills. And it also includes a lot
of pre and post preparation before and after the installation of the system
There are few steps for the same that the management must follow before installing
such system.
• The first step is effective planning. Planning helps in understanding what is the
need of the company and what are the steps that they can take to make sure that the
company is earning enough profit from the same.
• Once the product is selected, effective market research and analysis must be done
to make sure that they get the software from the best vendor and at the most optimum
cost. There are many vendors in the market that provide the company with the
products, choosing the best one of the lot is what the management needs.
• After that the company must check whether they have the necessary hardware
settings that are needed for the software and after that they must configure the software
and check whether it is functioning properly or not by doing a test check. The
hardware requirements of every software are different and it is important that the
companies must take necessary steps to make sure to comply with the same.
• After that the functioning of the software must be monitored to check how the
software is functioning and what changes are happening in the operations because of
the same. Some companies need high end ERP Packages and some need medium
ranged packages on the basis of their volume of transactions. The companies must
keep that in time before taking such steps of choosing the right software for their
company (Arnott, Lizama, & Song, 2017).
• Once the software is approved, the details of all the resources that include the list
of customers, the raw materials and the other data must be entered into the system. The
company must make sure that all the data that is entered is valid and there is no bugs in
the same. This will help in maintaining the system.
• The integrity of the system must be maintained and the company must see to it
that proper training is provided to the employees to use the system effectively and they
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must be asked if they are facing any problems in the same. Proper employee feedback
is very important for the company.
• Another important step includes maintenance of the overall system that includes
installing proper safety measures in the same. The management must make sure that
the vendor is providing proper safety measures and in case they feel certain danger,
steps must be taken accordingly. This is another important step in case of software
maintenance.
2) The key principles of the following topics include-
a) The double entry system of accounting deals with basic aspect of accounting that includes that
for every transaction there are two accounts involved. It helps in keeping the equation balanced.
Another aspect of double entry system is that the amounts that are entered in the debit side of the
general ledgers must be equal to the total amount of credit. It is one of the oldest concepts of
accounting (Kohtamäki, 2017). For example, if the company is taking some loan from the bank.
The entry will involve two accounts, the accounts payable account and the cash account. With
the loan, the cash amount will be debited by the amount taken and the accounts payable account
is credited with that amount. Both the amount in the ledger in that two account must match with
each other. This is the essence of double accounting system it helps in showing the true picture
of the financials of the business. The AASB 101 deals with presentation of the financial
statements and the same must be followed by the company.
b) Accrual accounting is the method of accounting in which the overall performances of the
business is judged not on the basis of the cash transactions that take place but on the period to
which they relate (Visinescu, Jones, & Sidorova, 2017). For example, if the company receives
prepaid income for the month of April and the books closes on March, than same shall not be
included in the financial statements. This helps in showing the true position of the company and
does not include such income that is related to the future period of the company. The ASSB 107
deals with management of the cash flow of the company, hence these transactions are affected by
the same.
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c) The basic qualities of the information that is included in the financial statements have the
following characteristics.
• It must be accurate and show case the correct data that is derived from the respective
transactions.
• It must be based on accrual basis that means that the data must be related to the period for
which the financial statements are being prepared.
• It is important that the presentation must be effective and people must be able to
understand the same and it must be relevant
• This information must be properly scrutinized and checked before finalization of the
accounts.It must be comparable, such that it helps in comparing the present position of the
company with the other companies and also over the same period of operations
• It must be clear and compact so that people who are dealing with such information finds
it very easy to do so.
• The data that the companies use must be clear, comprise and compact and easily readable
as per the contents of the general ledger of the company. (Laursen & Thorlund, 2016)
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Written Activity 2
1) For setting up the company’s chart of account, the company will first needs to consider
its accounting system. Every company requires different type of accounting system that is based
on their needs and their chart of account is framed on the basis of the same. In order to modify
the system the management needs to consider the loopholes in the present system and than
makes changes on the basis of the same. The charts should be based on the needs of the
management and necessary steps should be taken on the basis of the same. The various hardware
and software system that are related to the accounting software that includes common office
equipment, technology, software and consumables, an integrated commercial financial software
system and associated data must be checked (Mayntz, 2017). This will help in understanding
where the problems lies and then given the solution on the basis of the same. There are little
legislation and rules that the company needs to follow in respect of the same and the same must
be taken care while making the necessary changes. Accounting standards 134 interim financial
reporting lays down guidelines that can be followed while preparation of these charts.
a) A chart of account of the company is a tool that provides a complete list of all the accounts in
the financial system. It is an unique record of all the different types of assets, liabilities, revenue
and expense of any company (Trieu, 2017).
b)Subsidiary accounts are those accounts that prepared in ancillary to the main account and that
helps in providing extra information to the main account. It helps in better understanding of the
main account of the company.
c)The charts of the company can be improved by applying various methods like management of
the accounts by taking expert helps, by reconciling the accounts from time to time. This will help
in betterment of the accounts.
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Refrences
Arnott, D., Lizama, F., & Song, Y. (2017). Patterns of business intelligence systems use in organizations.
Decision Support Systems, 97, 58-68.
Kohtamäki, M. (2017). Real-time Strategy and Business Intelligence: Digitizing Practices and Systems.
Finland: Palgrave Macmillan.
Laursen, G., & Thorlund, J. (2016). Business Analytics for Managers: Taking Business Intelligence Beyond
Reporting (Second ed.). CANADA: Wiley Publisher.
Mayntz, R. (2017). Networked Governance. Springer.
Trieu, V. (2017). Getting value from Business Intelligence systems: A review and research agenda.
Decision Support Systems, 93, 111-124.
Visinescu, L., Jones, M., & Sidorova, A. (2017). Improving Decision Quality: The Role of Business
Intelligence. Journal of Computer Information Systems, 57(1), 58-66.
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