Accounting Essay example
With sophisticated accounting software and inexpensive computers, it is no longer practical for most businesses to manually enter transactions into journals and then to post to the general ledger accounts and subsidiary ledger accounts. Today, software such as QuickBooks* will update the relevant accounts and provide more information with a minimum of data entry.
*QuickBooks is a registered trademark of Intuit Inc. AccountingCoach LLC is not affiliated with Intuit Inc. and does not receive any affiliate marketing commissions from Intuit.
In this section we will highlight how the accounting software will capture financial transactions and then automatically update the general ledger and store the information for …show more content…
Another source of financial transactions is the company's payroll. While many companies process payroll on their accounting software, others opt to outsource payroll to companies such as ADP, Paychex, Intuit, or local firms.
(AccountingCoach is not affiliated with any of these companies and it does not receive affiliate marketing commissions from any of them.)
To learn more about payroll use any of the following links: * Explanation * Quiz * Questions and Answers (Q&A) * Crossword Puzzles
The purpose of the bank reconciliation is to be certain that the financial statements are reporting the correct amount of cash and the proper amounts for any related accounts (since every transaction affects a minimum of two accounts).
The bank reconciliation process involves: 1. Comparing the following amounts * The balance on the bank statement * The balance in the company's general ledger account. (The account title might be Cash - checking.) 2. Determining the reasons for the difference in the amounts shown in 1.
The common reasons for a difference between the bank balance and the the general ledger book balance are: * Outstanding checks (checks written but not yet clearing the bank) * Deposits in transit (company receipts that are not yet deposited in the bank) * Bank service charges and other