Accounting System (1)

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CHAPTER

ACCOUNTING SYSTEM

An effective accounting system is needed by Fruit Tea Enterprise for it supports basic

and advanced accounting modules to simplify the accounting process, centralize financialinformation, improve the efficiency of the employee, and generate accounting reports.

Accounting systems contains an organized set ofmanual and computerized accounting

methods, procedures, and controls established to gather, record, classify, analyze, summarize,interpret, and present accurate and timely financial data for management decisions.

I. Accounting System ComponentsA. Business Forms

These are the forms used by Fruit Tea Enterprise in recording the differenttransactions they entered into. These forms can also be used as evidences to support

assertions of the company regarding its results of operation and financial status.

1. Official ReceiptAn official receipt is a written acknowledgment. It is a specified note that shows money

which has been received as an exchange for products or services. The receipt aims to provide

an assurance that the party has paid the expenses of the products which it has purchased.

FRUIT TEA ENTERPRISE

19 San Roque Village, Asin Road, Baguio City

Tel No.

OFFICIAL RECEIPT

Date:

Receipt No. Receipt No.

Payee Name: Payer Name: Payer Name:

Address: Address: Address:

City, ST ZIP Code: City, ST ZIP Code: City, ST ZIP Code:

Date Description Amount DATE Amount

Subtotal Subtotal

Tax Tax

Total Total

Received by:
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2. Bank Deposit Slip/ReceiptA deposit slip is a printed form which accompanies bank deposits. The depositor fills out

the deposit slip to indicate what types of funds are being deposited and which accounts theyshould be deposited into.

Deposit to the account of:

Name: Cash Deposits

Date: Notes Qty Amount

1

ABC BANK

5

10

Bank Adress 20

50

Account Number : 100

200

500

Control Number: 1000

Total


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3. Purchase Slip/Purchase Requisition SlipDocument generated by a user department or storeroom-personnel to notify the

purchasing department of items it needs to order, their quantity, and the timeframe. It mayalso contain the authorization to proceed with the purchase.


19 San Roque Village, Asin Road, Baguio City

Telephone No

Requisition Doc. No.

VENDOR NAME Date

Address Department

Telephone No Date Needed

Acct No. Charged

Qty Description Catalog # Unit Price Amount

Total:


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4. Petty Cash VoucherA petty cash voucher is a small form that is used to document a disbursement (payment)

from a petty cash fund. Some petty cash vouchers are prenumbered and will be assigned forreference and control. Receipts or other documentation justifying the disbursement should be

attached to the petty cash voucher.

5. Payroll sheetA payroll sheet is a record sheet where all the summary of employee time cards are

posted for preparation of payroll.


Payroll Sheet

For the Month of XXX

EmployeeI.D.

EmployeeName

Regular Time Over Time

GrossEarnings

DEDUCTIONS

Net PayHours Rate Hours Rate SSS PAG-IBIG PHILHEALTH Employee Dues Withholding


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B. Business Records1. General JournalThe general journal is used to record transactions which do not fit the requirements of the

specialist journals such as the cash receipts journal, the cash payments journal, the sales

journal and the purchases journal. It records all other transactions.


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2. Cash Disbursement JournalA record kept by accountants to record all financial expenditures made by a company.

Cash disbursement journals serve a number of functions, such as a source for recording taxwrite-offs and the categorization of other expenses. This journal essentially functions as a

checkbook ledger, for all practical purposes.


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3. Cash Receipts JournalCash Receipts Journal is used to record all transactions involving the receipt of cash. The

cash receipts journal is an important way to track any cash you receive in exchange for aproduct.


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4. General LedgerA book of final entry summarizing all of a company's financial transactions, through

offsetting debit and credit accounts.


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C. Business Reports1. Balance Sheet

A balance sheet contains a list of summary of the financial balances of

assets, liabilities and ownership equity on a specific date, such as the end of its financial year.

A balance sheet is often described as a "snapshot of a company's financial condition".


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2. Income Statement

An income statement is a financial statement that measures a company's financial

performance over a specific accounting period.


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3. Cash Flows

A financial statement that shows how changes in balance sheet accounts and income

affect cash and cash equivalents, and breaks the analysis down to operating, investing, andfinancing activities. Essentially, the cash flow statement is concerned with the flow of cash in

and cash out of the business. The statement captures both the current operating results and the

accompanying changes in the balance sheet.


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4. Notes to Financial Statements

Notes to financial statements are additional information added to the end of financial

statements. Notes to financial statements help explain specific items in the financialstatements as well as provide a more comprehensive assessment of a company's financial

condition. Notes to financial statements can include information on debt, going

concern criteria, accounts, contingent liabilities or contextual information explaining the

financial numbers.

D. Chart of AccountsACCOUNT TITLE ACCOUNT NUMBER

CURRENT ASSETSCash on Hand 110

Raw materials Inventory 150

Supplies Inventory 155

Prepaid Rent 170

NON-CURRENT ASSETSMachinery 226

Equipment 227

Tools 228

CONTRA ASSET ACCOUNT

Accumulated Depreciation-Machinery 326Accumulated Depreciation-Equipment 327

Accumulated Depreciation-Tools and Implement 328

CURRENT LIABILITIESUtilities Payable 420

SSS Payable 422

PhilHealth Payable 417Witholding Tax Payable 415

Income Tax Payable 411

EQUITYAquino, Ferdinand Capital 510

Caadido, Jonathan Capital 511Dalisay, Christian Capital 512Capillar, Joyce Capital 513

Co,Cassandra Capital 514

Aquino, Ferdinand Drawings 515Caadido, Jonathan Drawings 516


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Dalisay, Christian Drawings 517

Capillar, Joyce Drawings 518Co,Cassandra Drawings 519

REVENUE ACCOUNTS

Sales 611

EXPENSE ACCOUNTS

Cost of Goods Sold 700Salaries Expense 715

PhilHealth Expense 716

SSS Expense 717Utilities Expense 718

Communication Expense 719

Rent Expense 720

Supplies Expense 721

Renovation Expense 722Taxes and Licenses 723

Advertising Expense 724Administrative Expense 725

Delivery Expense 726

Depreciation-Machinery 727Depreciation-Tools 728

Accounting System (1)

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