Accounting System and Processes: A Comprehensive Report

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Accounting system and process
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Contents
Introduction.................................................................................................................................................3
Q1................................................................................................................................................................4
Q2..............................................................................................................................................................14
Q3..............................................................................................................................................................17
Conclusion.................................................................................................................................................21
Reference...................................................................................................................................................22
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Introduction
The aim of this report to provide a clear and better understanding of accounting systems and
process within the organization and how accounting standards are helpful for recording
transactions in an appropriate manner so that accounting standards norms can be follow up. This
report contain accounting process from prepare journal to end of the accounting process i.e.
balance sheet and also include ratio which shows company Pete’s Handyman structure. In this
report also discuss origin and history of an accounting and how its standards or practices have
been changed over the period of time. An ethical accounting principles and ethical issues which
are faced by an accountant and show what things are to be doing in order to resolve such ethical
issues by applying and adopting ethical principles.
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Q1
i)
Journal entry in the books of Pete's Handyman Services for the month of july 2019
Date Particular
L.
F Debit Credit
Amount in $ Amount in $
1-Jul Trailer Dr. $ 4,200
To bank $ 4,200
(for trailer is purchased for $4,200)
1-Jul Bank account Dr. $ 4,200
To bank loan $ 4,200
(for bank loan is taken for purchase of
the trailer)
2-Jul accounts payable Dr. $ 300
To bank $ 300
(for outstanding expenses paid from
the bank)
4-Jul Mrs. Jones account Dr. $ 700
To handyman $ 700
(for service is provided to Mrs. Jones in
credit)
7-Jul Bank account Dr. $ 500
To customer $ 500
(for amount received in the bank by the
customer for which services is provided
in June)
8-Jul Mr. smart account Dr. $ 600
To handyman services $ 600
(for service is provided for which the
payment received in the June)
9-Jul purchase account Dr. $ 350
To bank account $ 350
(for purchases made from the bank
account)
10-
Jul Mr. budd account Dr. $ 1,300
To handyman service $ 1,300
(for service provided to the Mr. Budd
on credit basis)
4

12-
Jul Drawing Account Dr. $ 2,500
To bank account $ 2,500
(for amount withdrawn for personal
needs)
14-
Jul Bank account Dr. $ 1,250
To handyman service $ 1,250
(for services is provided on the basis of
electronic fund transfer)
15-
Jul expense account Dr. $ 80
To bank account $ 80
(for expenses occur and payment made
through bank)
16-
Jul bank account Dr. $ 1,300
to Mr. budd $ 1,300
(for amount received on the service
provided on 10 July)
22-
Jul Mr. Diaz account Dr. $ 500
to Handyman service
account $ 500
(for service is provided on the credit to
Mr. Diaz)
23-
Jul bank account Dr. $ 2,600
to Mr. Hatter $ 2,600
(for advance received from the
customer as service is to be provided in
the august)
23-
Jul Prepaid advertisement expenses Dr. $ 2,400
To bank account $ 2,400
(for advance payment for the expenses
are made which are to be occurred in
the future)
23-
Jul bank account Dr. $ 700
To Mrs. Jones account $ 700
(for amount received on the services
provided on 4 July)
26-
Jul drawing account Dr. $ 2,500
5

to bank account $ 2,500
(for amount withdrawn for personal
use.
26-
Jul bank account Dr. $ 280
to handyman services $ 280
(for service provided and amount
received in the bank account)
30-
Jul Prepaid insurance expenses account Dr. $ 320
To bank account $ 320
(for insurance expenses are made for
the august)
31-
Jul bank loan account Dr. $ 400
to bank account $ 400
(for installment of the loan is charged
on the loan which was taken for the
purchase of trailer)
31-
Jul interest account Dr. $ 336
to bank Account $ 336
(for interest is charged at the end on
the loan amount.
31-
Jul outstanding Expenses account Dr. $ 320
to repair expense $ 320
(for expenses recognized but payment
should be made in august)
31-
Jul outstanding Expenses account Dr. $ 150
to telephone expenses $ 150
(For expenses are recognized and it will
happen in future.
31-
Jul depreciation account Dr. $ 190
to equipment account $ 80
to vehicle account $ 110
(for depreciation is recognized on the
fixed assets)
31-
Jul Insurance account Dr. $ 300
to prepaid insurance $ 300
(for insurance paid)
6

ii)
Dr. Bank Account Cr.
Date Particular Amount Date Particular Amount
1-Jul to opening balance $ 3,600 1-Jul by trailer
$
4,200
1-Jul to bank loan $ 4,200 2-Jul by accounts payable
$
300
7-Jul to customer $ 500 9-Jul by purchase
$
350
14-Jul to handyman $ 1,250
12-
Jul by drawing
$
2,500
16-Jul to Mr. budd $ 1,300
15-
Jul by expenses
$
80
23-Jul to Mr. hatter $ 2,600
23-
Jul by advertisement expenses
$
2,400
23-Jul to Mrs. Jones $ 700
26-
Jul by drawing
$
2,500
26-Jul to handyman $ 280
30-
Jul by prepaid insurance
$
320
31-
Jul by bank loan
$
400
31-
Jul by interest
$
336
31-
Jul by closing balance
$
1,044
31-Jul total $ 14,430
$
14,430
Dr. Trailer
Account Cr.
Date Particular Amount Date Particular Amount
1-Jul to bank $ 4,200
31-
Jul by closing balance
$
4,200
total $ 4,200 total
$
4,200
Dr. Bank loan
account Cr.
Date Particular Amount Date Particular Amount
31-Jul to bank $ 400 1-Jul by bank
$
4,200
7

31-Jul to closing balance $ 3,800
total $ 4,200 total
$
4,200
Dr. Accounts Payable Account Cr.
Date Particular Amount Date Particular Amount
2-Jul to bank $ 300
31-
Jul by opening balance
$
300
total $ 300 total
$
300
Dr. Mrs Jones account Cr.
Date Particular Amount Date Particular Amount
4-Jul to handyman $ 700
23-
Jul by bank
$
700
Dr. Mrs. smart
account cr.
Date Particular Amount Date Particular Amount
8-Jul to handyman $ 600
31-
Jul by closing balance
$
600
Dr. Mr. budd
account Cr.
Date Particular Amount Date Particular Amount
10-Jul to handyman 1300
16-
Jul by bank 1300
Dr. Mr Diaz
account Cr.
Date Particular Amount Date Particular Amount
22-Jul to handyman services 500
31-
Jul by closing balance 500
Dr. Mr Hatter
account Cr.
Date Particular Amount Date Particular Amount
31-Jul to closing balance 2600
23-
Jul by bank 2600
8

Dr. Handyman
service Cr
Date Particular Amount Date Particular Amount
4-Jul by Mrs. Jones account
$
700
8-Jul by Mrs. smart
$
600
10-
Jul by Mr. budd
$
1,300
14-
Jul by bank
$
1,250
22-
Jul by Mr. Diaz
$
500
31-Jul to closing balance $ 4,630
26-
Jul by bank
$
280
$ 4,630
$
4,630
Dr. Customer cr.
Date Particular Amount Date Particular Amount
31-Jul to closing balance $ 500 7-Jul by bank
$
500
Purchase
Date Particular Amount Date Particular Amount
9-Jul to bank $ 350
31-
Jul by closing balance
$
350
Drawing Account
Date Particular Amount Date Particular Amount
12-Jul to bank $ 2,500
31-
Jul by closing balance
$
5,000
26-Jul to bank $ 2,500
Expenses Account
Date Particular Amount Date Particular Amount
15-Jul to bank $ 80
31-
Jul by closing balance
$
80
9

Prepaid Expenses Account
Date Particular Amount Date Particular Amount
1-Jul to opening balance $ 300
31-
Jul by closing balance
$
300
Interest Expenses Account
Date Particular Amount Date Particular Amount
31-Jul to bank $ 336
31-
Jul by closing balance
$
336
Advertisement Expenses account
Date Particular Amount Date Particular Amount
23-Jul to bank $ 2,400
31-
Jul by closing balance
$
2,400
telephone expenses account
Date Particular Amount Date Particular Amount
31-Jul to outstanding expenses $ 150
31-
Jul by closing balance
$
150
Repair expense account
Date Particular Amount Date Particular Amount
31-Jul to outstanding $ 320
31-
Jul by closing balance
$
320
Outstanding expense account
Date Particular Amount Date Particular Amount
31-Jul by closing balance $ 470
31-
Jul to telephone expenses
$
150
31-
Jul to repair expense
$
320
Depreciation Account
Date Particular Amount Date Particular Amount
10

31-Jul to equipment account $ 80
31-
Jul by closing balance
$
190
31-Jul to vehicle account $ 100
Insurance Expenses Account
Date Particular Amount Date Particular Amount
30-Jul to bank $ 320
31-
Jul by prepaid insurance
$
300
31-
Jul by closing balance
$
20
Prepaid Insurance Expenses Account
Date Particular Amount Date Particular Amount
31-Jul to insurance $ 300
31-
Jul by closing balance
$
300
iii)
Pete's Handyman Services
Trial Balance
as at 31st July 2019
Debit Credit
$ $
Bank $ 1,044
11

Accounts receivable $ 800
Prepaid expenses $ 300
Supplies $ 400
Equipment $ 920
trailer $ 4,200
Motor vehicle $ 8,300
Bank Loan $ 3,800
Mrs. Smart $ 600
Mr. Diaz $ 500
Mr. Hatter $ 2,600
Hnadyman $ 4,630
customer $ 500
purchase $ 350
Drawings $ 5,000
Expenses $ 80
Unearned revenue $ 600
Pete Smith, capital $ 13,600
Advertising $ 2,400
Depreciation $ 180
Insurance $ 20
Interest expense $ 336
Prepaid insurance expense $ 300
Motor vehicle expenses
Repairs $ 320
Outstanding Expense $ 470
Supplies expense
Telephone $ 150
Total $ 26,200 $ 26,200
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