Accounting System and Process: Excel, Inventory and Financial Reports

This assignment delves into the intricacies of accounting systems and processes, primarily focusing on the application of Excel spreadsheets. The solution provides a detailed analysis of naming cells within a spreadsheet, explaining their utility in referencing data and simplifying formula input. It then elucidates the representation of negative numbers, the differentiation between data and report areas, and the functionality of the IF function. The assignment further explores the concepts of periodic and perpetual inventory systems, providing examples and calculations for each. Finally, it discusses the benefits and limitations of using spreadsheets in accounting, including their role in financial reporting and data management. References are included to support the analysis.

Running head: ACCOUNTING SYSTEM AND PROCESS
Accounting system and process
Name of the university
Subject code and name
Student name and student ID number
Assignment task number
Author note

ACCOUNTING SYSTEM AND PROCESS 1
Table of Contents
Answer 1.................................................................................................................................................................2
Answer 3.................................................................................................................................................................4
Answer 4.................................................................................................................................................................6
Answer 5.................................................................................................................................................................8
Answer 6.................................................................................................................................................................9

ACCOUNTING SYSTEM AND PROCESS 2
Answer to Question 1
Naming cells that are included in the spreadsheet are as follows:
In the spreadsheet of the excel file the cells are provided with names for the users. This would enable
the user to refer to the data. Moreover, it helps the user of the spread sheet to input the various required
formulas easily and it also makes capable of making the needed alterations in a more suitable process, if
required. The example provided in the following table will give the representation of the expenses and revenues
in the spreadsheet (Locock, 2014).
Overview of the Naming cells
Normal view –
Formula view of the same –

ACCOUNTING SYSTEM AND PROCESS 3
Answer to Question 2
The concept of Negative numbers
The Negative numbers present in the in the spread sheet of a spread sheet document are represented
with the help of through red colour along with placing minus sign in front of the data or number. This can also
be shown by putting the relevant numerical or values within the bracket. Although there exists no such
particular regulations regarding the process or procedure in which the numerical data with negative value can
be is to be presented, it can be shown in bracket to make it visible for the users and present the same in a
different manner from that are positive numbers.
The following Example that shows the negative numbers in bracket are represented in the below table –

ACCOUNTING SYSTEM AND PROCESS 4
Answer 3
The Differentiating report area and data area
In the spreadsheet in the excel document the data area and the report area in the excel spreadsheet must
be differentiated to enable the uses to take decisions based on that (Willis, 2016). The data area represents raw
data whereas the report area presents the processed data. It enables the users to extract both unprocessed as
well as processed data from the sale excel sheet.
Normal view –

ACCOUNTING SYSTEM AND PROCESS 5
Formula view –

ACCOUNTING SYSTEM AND PROCESS 6
Answer 4
The IF function in the Excel spreadsheet:
The YouTube reference for IF function in the spreadsheet is given the following link. It shows the various
process and mechanism of the same - https://www.youtube.com/watch?v=iKN-QpBLkyM
The IF function in the spreadsheet is the logical test under spreadsheet and is based on some particular
situation. If the condition is satisfied then it returns the value that is TRUE, else returns the value that is
FALSE.
The Example of the If function:
Normal view –

ACCOUNTING SYSTEM AND PROCESS 7
Formula view –

ACCOUNTING SYSTEM AND PROCESS 8
Answer 5
The concept of periodic inventory and the perpetual inventory
Under the concept of the mechanism of periodic system the physical count are taken infrequently for the
measurement of the inventory level and cost of goods sold whereas under the perpetual system the inventory
balances are are tracked and recorded continuously and the updates are automatically made whenever any
product is sold or received. The given foot video shows periodic inventory.
Example of periodic inventory –
COGS = Opening inventory + Purchases – Closing inventory
Let’s make an assumption that, Opening balance on 01-01-2016 = $ 2,000
Purchases made = $ 8,000
Closing balance on 31-12-2016 = $ 5,000
Hence, COGS = $ 2,000 + $ 8,000 - $ 5,000 = $ 5,000
While providing the example of perpetual inventory it can be said that:

ACCOUNTING SYSTEM AND PROCESS 9
In a grocery shop the inventories are made up to date only at the time when there is a sale or receipt of
the stocks or the inventories.
Answer 6
Financial report and worksheet
Introduction
Spreadsheet is the mechanism that is used for recording the large amounts of data present with in within
the cells that are organized in the columns and rows. The cell may include the data and various calculations like
sums or percentage. It also helps in the system of controlling and handling data for categorization and
segregating the data.
Discussion
There are various benefits along with the limitations of the spreadsheet in the excel that are mentioned in the
below –
Benefits
Spreadsheets assists in copying the format of the paper based sheets that are used by the bookkeepers
and accountants for long times. The benefits of the spreadsheet is that it combines the rigid layout of needed for
maintaining the accounts in clear manner with the inbuilt calculator. Users can further use different formulas
and can state the data based on formulas. Further, it is used to keep the track on various data very easily and
saves lot of time for the employees (Ramachandran Rackliffe, U., & Ragland, L. (2016).
Limitations
The primary disadvantages linked with the spreadsheet it is the system of deskilling. The employees
needs to require a special knowledge for the maintenance and calculation of the data in the spreadsheet.
Moreover, the spreadsheet installed in individual computer generally used by the particular employee to make
his own calculation and data file. It may lead to duplication of data that wastes the efforts of the employees.
Moreover, the spreadsheet structure requires raw data which may not be available all the time (Selwyn, N.,
Henderson, M., & Chao, S. H. (2015)
Conclusion
It can be concluded from the above evaluation that the excel spreadsheet have an vital part in
management and calculation process of the various business data. Though various limitation that are connected
with the spreadsheet, it can be considerably beneficial if utilised proper manner and if proper training is
provided to the user of the spreadsheet.

ACCOUNTING SYSTEM AND PROCESS 10
References
Locock, A. J. (2014). An Excel spreadsheet to classify chemical analyses of amphiboles following the IMA
2012 recommendations. Computers & Geosciences, 62, 1-11.
Ramachandran Rackliffe, U., & Ragland, L. (2016). Excel in the accounting curriculum: perceptions from
accounting professors. Accounting Education, 25(2), 139-166.
Selwyn, N., Henderson, M., & Chao, S. H. (2015). Exploring the role of digital data in contemporary schools
and schooling—‘200,000 lines in an Excel spreadsheet’. British Educational Research Journal, 41(5),
767-781.
Willis, V. F. (2016). A model for teaching technology: Using Excel in an accounting information systems
course. Journal of Accounting Education, 36, 87-99.