Financial accounting 12th warren duchac chapter 05

Accounting Systems Chapter Student Version These Theseslides slidesshould shouldbe beviewed viewedusing usingthe thepresentation presentation mode mode(click (clickthe the icon icontotostart startpresentation) presentation) © 2011 Cengage Learning All Rights Reserved May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use Prepared by: C Douglas Cloud Professor Emeritus of Accounting Pepperdine University Learning Objective 1 Define and describe an accounting system © 2011 Cengage Learning All Rights Reserved May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use LO Basic Accounting Systems An accounting system is the methods and procedures for collecting, classifying, summarizing, and reporting a business’s financial and operating information © 2011 Cengage Learning All Rights Reserved May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use LO Basic Accounting Systems As a business grows and changes, accounting systems also change in the following three-step process  Analyze user information needs  Design the system to meet the user needs  Implement the system © 2011 Cengage Learning All Rights Reserved May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use LO Basic Accounting Systems Internal controls are the policies and procedures that protect assets from misuse, ensure that business information is accurate, and ensure that laws and regulations are being followed  Processing methods are the means by which the accounting system collects, summarizes, and reports accounting information These methods may be either manual or computerized © 2011 Cengage Learning All Rights Reserved May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use Learning Objective Define and describe an accounting system Journalize and post transactions in a manual accounting system that uses subsidiary ledgers and special journals © 2011 Cengage Learning All Rights Reserved May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use LO Subsidiary Ledgers  A large number of individual accounts with a common characteristic can be grouped together in a separate ledger called a subsidiary ledger.which contains  The primary ledger, all of the balance sheet and income statement accounts, is called a ledger ledger is general Each subsidiary represented in the general ledger by a summarizing account, called a controlling account © 2011 Cengage Learning All Rights Reserved May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use LO Subsidiary Ledgers  The individual customer accounts are arranged in alphabetical order in a subsidiary ledger called the accounts receivable subsidiary ledger, or customers ledger  Individual creditor accounts are arranged in alphabetical order in a subsidiary ledger called the accounts payable subsidiary ledger, or creditors ledger © 2011 Cengage Learning All Rights Reserved May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use LO Special Journal One method of processing transactions more efficiently in a manual system is to use special journals Special journals are designed to be used for recording a single transactiontwo-column that occurs frequently kind The of all-purpose journal, called the general journal or simply the journal, can be used for entries that not fit into any of the special journals © 2011 Cengage Learning All Rights Reserved May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use LO Special Journals The revenue journal is used for recording fees earned on account  Cash fees earned would be recorded in the cash receipts journal  Purchases made on account (on credit) are recorded in the purchases journal All cash payments are recorded in the cash payments journal © 2011 Cengage Learning All Rights Reserved May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use LO Exhibit (in steps) Date 2012 Mar 12 19 27 31 Page 11 PURCHASES JOURNAL Accts Other Post Payable Supplies Accounts Post Account Credited Ref Cr Dr Dr Ref Amount Howard Supplies Donnelly Supplies Jewett Bus Sys Donnelly Supplies Howard Supplies 600 420 2,800 1,450 960 6,230 ( 21) 600 420 Off Equip 1,450 960 3,430 ( ) Supplies would be debited for $3,430 GENERAL LEDGER and 14 written in the ACCOUNT Accounts Payable parentheses Date Item P.R Debit P11 2,800 2,800 ( ) No 21 Credit Balance 6,230 1,230 7,460 2012 Mar Bal 31 18 © 2011 Cengage Learning All Rights Reserved May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use 31 LO Cash Payments Journal All transactions involving a credit to Cash are recorded in the cash payments journal © 2011 Cengage Learning All Rights Reserved May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use LO Exhibit (in steps)  All transactions involving a credit to Cash are recorded in the cash payments journal CASH PAYMENTS JOURNAL Date 2012 Mar Ck No 150 Account Debited Rent Expense PAGE Other Accounts Post Accounts Payable Ref Dr Dr 1,600 Cash Cr 1,600 On March 2, 2012, issued Check 150 for rent of $1,600 © 2011 Cengage Learning All Rights Reserved May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use (continued) 33 LO Cash Payments Journal The amounts listed in the “Other Accounts Dr.” column are posted on a regular basis The $1,600 for Rent Expense is posted to Account No 52 © 2011 Cengage Learning All Rights Reserved May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use LO Exhibit (in steps) CASH PAYMENTS JOURNAL Date 2012 Mar Ck No 150 Account Debited PAGE Other Accounts Post Accounts Payable Ref Dr Dr Rent Expense Cash Cr 1,600 52 1,600 General Ledger Account Rent Expense Date 2012 Mar Item P.R CP7 Account No 52 Dr Cr 1,600 (continued) © 2011 Cengage Learning All Rights Reserved May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use Balance 1,600 LO Exhibit (in steps) CASH PAYMENTS JOURNAL Date 2012 Mar 15 21 22 30 31 Ck No Account Debited 150 151 152 153 154 155 Rent Expense Grayco Supplies Jewett Business Sys Donnelly Supplies Utilities Expense Howard Supplies PAGE Other Accounts Post Accounts Payable Ref Dr Dr 52 √ √ √ 54 1,600 1,230 2,800 420 1,050 √ 600 Cash Cr 1,600 1,230 2,800 420 1,050 600 (continued) © 2011 Cengage Learning All Rights Reserved May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use LO Cash Payments Journal CASH PAYMENTS JOURNAL Date 2008 2012 Mar Mar 2 15 21 22 30 31 Ck No Account Debited 150 150 151 152 153 154 155 Rent Rent Expense Expense Grayco Supplies Jewett Business Sys Donnelly Supplies Utilities Expense Howard Supplies PAGE Other Accounts Post Accounts Payable Ref Dr Dr 52 √ √ √ 54 1,600 1,600 1,230 2,800 420 1,050 600 √ 31 The totals for “Accounts Payable Dr.” and “Cash Cr.” are posted 2,650 (√ ) © 2011 Cengage Learning All Rights Reserved May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use 5,050 (21) Cash Cr 1,600 1,600 1,230 2,800 420 1,050 600 7,700 (11) (continued) 37 Learning Objective Define and describe an accounting system Journalize and post transactions in a manual accounting system that uses subsidiary ledgers and special journals Describe and illustrate the use of a computerized accounting system © 2011 Cengage Learning All Rights Reserved May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use LO Computerized Accounting System  Computerized accounting systems have the following three main advantages over manual systems: 1.Computerized systems simplify the record-keeping process by recording transactions in electronic forms and, at the same time, posting them electronically to general and subsidiary ledger accounts © 2011 Cengage Learning All Rights Reserved May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use LO Computerized Accounting System 2.Computerized systems are generally more accurate than manual systems 3.Computerized systems provide management with current account balance information to support decision making, since account balances are posted as the transactions occur © 2011 Cengage Learning All Rights Reserved May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use Learning Objective 1.Define and describe an accounting system 2.Journalize and post transactions in a manual accounting system that uses subsidiary ledgers and special journals 3.Describe and illustrate the use of a computerized accounting system 4.Describe the basic features of e-commerce © 2011 Cengage Learning All Rights Reserved May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use 41 41 LO E-Commerce Using the Internet to perform business transactions is termed e-commerce  When transactions are between a company and a consumer, it is termed B2C (business-to-consumer) e-commerce © 2011 Cengage Learning All Rights Reserved May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use Learning Objective Define and describe an accounting system Journalize and post transactions in a manual accounting system that uses subsidiary ledgers and special journals Describe and illustrate the use of a computerized accounting system Describe the basic features of ecommerce Use segment analysis in evaluating 43 © 2011 Cengage Learning All Rights Reserved May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use LO Segment Analysis One way to report revenue is by different segments Businesses may be segmented by region, by product or service, or by type of customer © 2011 Cengage Learning All Rights Reserved May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use Accounting Systems The End Student Version Prepared by: C Douglas Cloud Professor Emeritus of Accounting Pepperdine University © 2011 Cengage Learning All Rights Reserved May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use ... for classroom use LO Basic Accounting Systems An accounting system is the methods and procedures for collecting, classifying, summarizing, and reporting a business’s financial and operating information... otherwise on a password-protected website for classroom use LO Basic Accounting Systems As a business grows and changes, accounting systems also change in the following three-step process ... regulations are being followed  Processing methods are the means by which the accounting system collects, summarizes, and reports accounting information These methods may be either manual or computerized