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 financial information, improve the efficiency of the employee, and generate accounting reports. Accounting systems contains an organized set of manual 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 Components A. Business Forms These are the forms used by Fruit Tea Enterprise in recording the different transactions 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 Receipt An 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 Payee Name: Address: Payer Name: Address: No. Receipt Payer Name: Address: City, ST ZIP Code: Amount DATE Amount No.

City, ST ZIP Code: City, ST ZIP Code: Date Description

Subtotal Tax Total Received by:

Subtotal Tax Total

2. Bank Deposit Slip/Receipt A 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 they should be deposited into.

Deposit to the account of:

Name: Date:

Cash Deposits Notes 1 5 Qty Amount

ABC BANK Bank Adress

10 20 50

Account Number :

100 200 500

Control Number:

1000

Total

3. Purchase Slip/Purchase Requisition Slip Document 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 may also contain the authorization to proceed with the purchase.

FRUIT TEA ENTERPRISE 19 San Roque Village, Asin Road, Baguio City Telephone No Requisition Doc. No. VENDOR NAME Address Telephone No Date Department Date Needed Acct No. Charged

Qty

Description

Catalog #

Unit Price

Amount

Total:

4. Petty Cash Voucher A 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 for reference and control. Receipts or other documentation justifying the disbursement should be attached to the petty cash voucher.

5. Payroll sheet A payroll sheet is a record sheet where all the summary of employee time cards are posted for preparation of payroll.
FRUIT TEA ENTERPRISE Payroll Sheet For the Month of XXX
Regular Time Employee I.D. Employee Name Hours Rate Over Time Hours Rate Gross Earnings SSS PAG-IBIG DEDUCTIONS PHILHEALTH Employee Dues Withholding Net Pay

B. Business Records 1. General Journal The 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.

2. Cash Disbursement Journal A 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 tax write-offs and the categorization of other expenses. This journal essentially functions as a checkbook ledger, for all practical purposes.

3. Cash Receipts Journal Cash 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 a product.

4. General Ledger A book of final entry summarizing all of a company's financial transactions, through offsetting debit and credit accounts.

C. Business Reports 1. 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".

2. Income Statement An income statement is a financial statement that measures a company's financial performance over a specific accounting period.

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, and financing 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.

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 financial statements 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 Accounts
ACCOUNT TITLE CURRENT ASSETS Cash on Hand Raw materials Inventory Supplies Inventory Prepaid Rent NON-CURRENT ASSETS Machinery Equipment Tools ACCOUNT NUMBER

110 150 155 170

226 227 228

CONTRA ASSET ACCOUNT Accumulated Depreciation-Machinery Accumulated Depreciation-Equipment Accumulated Depreciation-Tools and Implement CURRENT LIABILITIES Utilities Payable SSS Payable PhilHealth Payable Witholding Tax Payable Income Tax Payable EQUITY Aquino, Ferdinand Capital Caadido, Jonathan Capital Dalisay, Christian Capital Capillar, Joyce Capital Co,Cassandra Capital

326 327 328

420 422 417 415 411

510 511 512 513 514

Aquino, Ferdinand Drawings Caadido, Jonathan Drawings

515 516

Dalisay, Christian Drawings Capillar, Joyce Drawings Co,Cassandra Drawings REVENUE ACCOUNTS Sales EXPENSE ACCOUNTS Cost of Goods Sold Salaries Expense PhilHealth Expense SSS Expense Utilities Expense Communication Expense Rent Expense Supplies Expense Renovation Expense Taxes and Licenses Advertising Expense Administrative Expense Delivery Expense Depreciation-Machinery Depreciation-Tools

517 518 519

611

700 715 716 717 718 719 720 721 722 723 724 725 726 727 728