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11 Cards in this Set
- Front
- Back
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Purpose |
a. record all transactions promptly and accurately b.post transactions to the proper accounts c.maintain the balance of debits and credits d. accommodate necessary adjusting journal entries e.generate timely and accurate financial reports |
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Functions |
a. collect transaction data b.process transaction inflows c.store transaction data d.maintain accounting controls e. generate financial reports f.maintain accounts payable g. post transactions to the general ledger h.misc. |
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collect transaction data |
sales purchases other: including management resources |
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process transaction inflows |
a. check debits v credits b. eligibility of the accounts- is it even appropriate to post anything to this account |
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store transaction data |
a. general ledger is a a master file; journals are transaction files b. journals need to be archived and maintained for audit trail |
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maintain accounting controls |
a. debits v credits b. checking and editing values -debits may match credits, but number may still be inaccurate -software may work of extreme values (example of trend analysis) c.organizational independence -person who disperses cash should not be the person who creates the payable |
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generate financial reports |
a. income statement b.balance sheet c. budget variance analysis d.aging reports e. cash flow statement |
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maintain accounts payable |
do you |
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Post transactions the the general ledger |
batch realtime- manual is always batch; computerized may be either |
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Sources of data |
Routine data is from special purpose journals
non-routine data a. recurring: depreciation occurs annually b.non-recurring:extraordinary events (change in inventory valuation;extraordinary writeoffs)
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Risks: |
a. journal entries were improperly prepared or never posted - never posted would still balance -wrong dating can cause a posting failure b. debits don't total with credits c. control account balance is out of sync- control is only a monthly reconciliation d.unauthorized access e.audit trail is obscured- loss of source documents (obscured means we have a doc that we can't associate with a transaction) |
