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Accounting Reports Classified Reports: Are reports which have been modified in presentation in an attempt to highlight the key aspects of the business, which provide more detail for decision making. For example, in each specific business area ratios and trends can be established, and managerial responsibilities can be accounted for. Classified Statement of Financial Position: [...]

Closing Entries As a process in the preparation reports, closing entries are required as to: allow revenue and expense accounts to be closed off to one account to determine profit/loss for a period. This can then be transferred to the capital account. prepare the accounts for the new period by returning all revenue and expense [...]

Perpetual Stock System Stock Control: A process whereby we monitor the inflow and outflow of stock on hand. Perpetual System: [Used in this accounting study course.] A continuous control system performed at the point of sale, which enables user to know how much stock is on hand at all times. Advantages of this as distinct [...]

Journals Because the quantity of data to be recorded is so much, it is ‘easiest’ to summarise the information before posting the transactions in the general ledger. Journals facilitate this purpose by recording data from source documents and summarising this information before it goes to the general ledger. General Journal: Used to record irregular ‘one-off’ [...]

Accounting System Effect on ledger accounts: A/C Increase Decrease Asset (A) Debit Credit Liability (L) Credit Debit Owner’s Equity (OE) Credit Debit Revenue (R) Credit Debit Expenses (E) Debit Credit (See below for notes on:  Journals, Ledgers, Trial Balance, Balance Day Adjustments, Accounting Reports, Evaluation of reports, Budgeting for future). Source Documents: [Used as verification [...]