Modified Professional Accounting System by acceleration69

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									        MODIFIED
PROFESSIONAL ACCOUNTING
         SYSTEM




             Written By
             Masood Uz-zaman Shamsi
             BS (Information technology),
             MS (Computer Science),
             Certified the Accounting Course
                                                         ABSTRACT

Accounting system is calculation system those spent the money in the organization, institution,
and industries. The debit and credit rules are followed. This spent the money, is called
expense. Expense is record the money of business cycle of the organization. Also other, in the
accounting system there are four different branches in the account. The accounts are revenue,
capital, liability and assets. The detail of five types accounts are explained in the Professional
Accounting System. For that Professional Accounting System, you have seen the text book
degree level to long explain the theory of accounting.

The voucher system is explained, defined the vouchers type. How created the vouchers in the
different manner, also taxation accounting is handled. Bank is recorded the account customer
transection and utility billing transection of customers. In the advance 20th century, different
credit card system and ATM system transections are recorded.

By five accounts types, we enter the entries and records in the General Ledger. The general
ledger is fundamental building of accounting, after we generate the reports of accounting.
There are different reports in the accounting, Income statement and Balance Sheets and are
generated. I discussed how to generate the entries, income statement and balance sheets by
different software.




                                                                      i
Note: The paper is advance, for this paper studied to should buildup the knowledge of accounting.
                                              Index
Chapter 1 Accounting Equation and debit credit rules        Pg 1

1.1 Accounting equation                                    Pg 1
1.2 Accounting Banking equation                            Pg 1
1.3 Type of Account                                        Pg 2
1.3.1 Asset                                                Pg 2
1.3.2 Expense                                              Pg 3
1.3.3 Revenue                                              Pg 3
1.3.4 Equity (Capital)                                     Pg 3
1.3.5 Liabilities                                          Pg 3
1.4 Rule of Debit and Credit                               Pg 4

Chapter 2 Manual Accounting                                 Pg 5

2.1 Voucher                                                Pg 5
2.1.1 Type of vouchers                                     Pg 5
2.1.1.1 Debit/Payment voucher                              Pg 5
2.1.1.2 Credit/Receipt voucher                             Pg 6
2.1.1.3 Journal voucher                                    Pg 8

Chapter 3 Account Registers Function and Taxation Rules     Pg 9

3.1 Registers requirement                                  Pg 9
3.1.1 Cash Book                                            Pg 9
3.1.2 Payment Ledger                                      Pg 10
3.1.3 Receipt book                                        Pg 10
3.2 Register Rule                                         Pg 10
3.3 Sale Tax Calculation                                  Pg 11
3.3.1 Sale Tax Documents                                  Pg 12
3.3.2 Tax Report for employee salary                      Pg 13

Chapter 4 Computerized Accounting                           Pg15

4.1 How to work in the Peachtree Accounting                Pg 16
4.1.1 Microsoft FoxPro Accounting                          Pg 16
4.1.2 QuickBook Enterprise                                Pg 18
4.1.3 Tally ees (6.3 Version)                             Pg 18
4.2 Register Maintain                                     Pg 20
4.3 Voucher Maintain                                      Pg 20
4.3 CHART OF ACCOUNT                                      Pg 20-22
Chapter 1
Accounting Equations And Debit Credit Rules
1.1 Accounting Equation
The equation of accounting is

                             Assets = Liabilities + Capital + (R – E)

This is the basic equation of above equation which shown in above.
Putting the value in this equation and found the calculation of Assets and other for find arrange
the value.

For example
The arrange of equation are possible

                             Liabilities = Assets – Capital + (R – E)

                             Capital = Assets – Liabilities + (R – E)

Assets is the objects, non living things are taken the assets. In the few cases, the living things
are taken the assets, expected Human being. Human being fulfills the functionality nature of
working.

1.2 Accounting Banking Equation
The banking equation is
                                       Debit – Credit = Balance
In the debit, credit transections to record the five type accounts. After calculate to find the
balance. By banking equation are recorded the PLS and Current accounts of bank customers.
The cycling of bank transection, customer is deposited the amount and deposited BANK
CHEQUE then record the credit transection. The company is maintaining the debit transection
for regarding. In banking system, one system is the credit card system to maintain the
transection of customer is used the equation.

Current Balance = Previous Balance + Purchase + Balance Transfer/Cash
                  Advance + Fee Charged – Payment Received - Credits

In the credit card system, the bank is provided the credit cash balance and bought the products
in the credit and payment the bill facilities of customer. Customer is withdrawn the cash by
credit card then the bank is generated the bill with due date.

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1.3 Type of Accounts
There are different accounts describe in below
1.3.1 Asset
1.3.2 Expense
1.3.3 Revenue
1.3.4 Equity (Capital)
1.3.5 Liabilities

1.3.1 Asset
Asset is kept the two natures, Tangible Assets and Non- Tangible Assets. Tangible Assets are kept the
physical instance. Physical instance is naturally enabled characteristic. For example, land, machine,
cash and each type of products. Non - Tangible Assets are not the physical instance. Those are the
ideas.
The Asset account types are the following,

Current Assets

Petty cash
Cash on hand
Regular checking account
Payroll checking account
Saving Account
A/R and Other Receivable
Allowance for Doubtful Account
Inventory
Prepaid Expenses
Employee Advances
Note Receivable
Other current assets

Inventory Record

Items ID – service
Description – Labor
Item class – activity
Inactive – charge
Non- stock/inventory
Stock/Inventory

Field in Inventory

The fields of inventory are may be Item ID, Name, Reference, Date, Job, GL source

                                                 2
Account Unit Cost, Quantity on hand, and Adjust Quantity by Reason to adjust.

Fixed Assets

Fixed assets is the assets, those are not changeable. The types of fixed assets are Land,
Machine and etc.

1.3.2 Expense

Expense is spent the amount on the business, bought the machine or other products. In the
expense, amounts are countable and profit or loss is recorded those spent the amount on the
business, bought the machine or other products.
The many type of expenses are Time/Expense report, Accrued Expense,
Apply Tickets/Reimbursable expanses, Destination b/w assets and Expanse
Reimbursable Expanse (apply to sale invoices), Apply Tickets/Reimbursable and Expanse
tickets.

1.3.3 Revenue
Revenue is the income. The Business owner is invested the amounts in the business. After
business cycled, is amount on hand. The amounts will be loss or profit or non-profit in the
business.
In the revenue, there are different categories of revenue, Accrued Revenues, Deferred
Revenues, Income, Timing of Revenue recognition, estimated job revenue report, Income
statement, Interest income, and Net income, Relation of balance sheet, income statement,
Income tax accounting and Earned.

1.3.4 Equity (capital)

Equity is the detection of amount any bank account. Also equity is the spent amounts any
office and industries, the accountant of the office and industries are record the expenses those
are spent.
There are different categories of equity.
Retained earnings - owner - Equity
Doesn’t close - Equity
Close - Equity.
This represents the earned (Retained earning) capital of the company

                                  Equity = Assets – Liabilities

1.3.5 Liabilities
Liabilities are the cycling/process amounts, other is an outstanding amount. The example of

                                                3
liabilities are, the office and industries are deposited the cheques in the bank, the three days
clearing CHEQUE time duration. The offices or industries are recorded the cheque in the
liability category. After three days clearing duration, the amounts are transferred in the
account.
The categories of liabilities are Accrued liabilities, Long-term liabilities, Payroll tax Liability
report, Net amount due, Date due (Receipts) and Net amount due (payment).

1.4 Rules Of Debit And Credit
Debit is recorded to take amounts and all type of products. Credit is recorded to release
amounts and all type of products. There are five types of accounts, asset, expanse, capital,
liabilities and revenue.




                                    Fig. 1.1 Debit and Credit Rules




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Chapter 2
Manual Accounting
The manual accounting is the concept to record the business transaction and calculation of
organization and bank. Manual accounting is worked by hand. In the manual accounting, there
are different vouchers, vouchers name are described in the below
Credit Voucher
Debit Voucher
Journal Voucher
Deposit Voucher
Bill payment Voucher

2.1 Voucher
Voucher is an evidence (written) that shows transaction has occurred. Voucher is manual
record system, the whole seller is used the voucher to record the products which are supplied
those are sold the shopkeeper. Voucher is the billing system.
Other trend is, the banker is record the transactions of customers by different vouchers. The
bank vouchers are different deposit voucher, credit voucher, pay order voucher and etc.

2.1.1 Type Of Vouchers
The types of vouchers are Debit/Payment Voucher, Credit/Receiving/Receipt voucher, and Journal
Voucher. The categories of these vouchers are explained in below paragraph.

2.1.1.1 Debit/Payment Voucher
When ever, we pay “CASH” or “CHEQUE”. We make “Debit Voucher”.
    1) If we pay CASH than voucher will be called “Cash Debit Voucher”.
    2) If we pay via CHEQUE than voucher will be called “Bank Debit Voucher”.
In the debit/payment voucher,
The categories of Debit/Payment Voucher are described below
    a) Cash debit voucher
    b) Bank debit voucher
    c) Pay order voucher

a) Cash Debit Voucher

Cash debit voucher is received the cash any organization B. The organization A is maintained
the cash in the debit ledger, organization is the different kinds. Manufacturing finished
products, import and export products, bank and etc.

                                               5
                                 Fig. 2.1 Debit/Payment Voucher

b) Bank Debit Voucher

    Bank debit voucher is record the customer deposit amounts on his/her accounts. Also in
    the bank debit to come record on bank transection is the bank debit voucher.

 c) Pay Order Voucher

    Pay order voucher is to transfer the amounts by bank in the organization account and by
    bank is get the pay order. The organization is collected the pay order, filled and approved
    voucher and is deposited the pay order in the bank account.

2.1.1.2 Credit/Receipt Voucher

Whenever we receive “CASH” or “CHEQUE”. We make “Credit Voucher”.

   1) If we receive CASH then voucher will be “Cash Credit Voucher.
   2) If we receive CHEQUE than voucher will be “Bank Credit Voucher.

                                                 6
                                     Fig. 2.2 Credit Voucher



In the Credit/Receiving/Receipt voucher, there are vouchers
  a) Cash credit voucher
  b) Bank credit voucher

a) Cash Credit Voucher
Cash credit voucher is accomplished, when any products were bought by credit. In this century,
the bank is made the credit card of customer, when customer is bought the products then
shopping center/ Super Market sale person is generated the bill with the reference of credit card
of customer. Also generated the cash credit voucher or bill, one copy of bill is given the
customer and second copy of bill is kept the sale person.

b) Bank Credit Voucher
Bank credit voucher is accomplished, when the customer take the loan by bank, there are

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different type of loan. Business loan, land loan, equipment loan and etc. type loans. When
customer is got the loan then bank is divided the installments of loan return.

2.1.1.3 Journal Voucher
Journal voucher is collected the all remaining entry which no collect in Debit and Credit
vouchers.
There are different functions of journal voucher, the functions are all receivable transaction,
all payable transaction, all Debit Voucher and all Credit Voucher.




                                        Fig 2.3 Journal Voucher




                                                8
Chapter 3
Account Registers Function And Taxation Rules
3.1 Registers Requirement
Register requirement is the manual entry record procedure. In the registers, there are different
registers types cash book, payment ledger and receipt book.


3.1.1 Cash Book

Cash book is the register, in the cash book the company is recorded transection cycling sold
products with profit and deposited to record the amount in the bank. After deposited amount
the finally amount calculated.




                                          Fig 3.1 Cash book

                                                9
3.1.2 Payment Ledger

Payment ledger is recorded the transection of the company to company, customer to bank,
customer to company, employees to his/her companies and student fee to institution.
Company is paid for purchasing the products for whole sell dealer. The transection will be
recorded the payment ledger.

In the payment ledger, first type the company name in the ledger line. Second type the account
type in the Account of line. Account type may be account payable (A/P), account receivable
(A/R) and etc. and fitted the data in the columns.




                                      Fig 3.2 Payment Ledger



3.1.3 Receipt Book

Receipt book is recorded the customer transection. Customer transection is belonged to bank
transection. There are different bank transections deposited amount his/her account, fund

                                              10
transfer, withdraw the amount his/her account. For seeing receipt book is seen the Fig. 3.1.
Cash book and receipt book are the approximate same properties.

3.2 Register Rule

Register rule is used to how data enter in the registers. There are different types of registers
Cash book, Ledger and Journal registers and purchased and follow the rules.

    1) A/C entries put in Cash Book.
    2) Cash & bank put in payment ledger
    3) Cash, Bank cheque received in receipt book
    4) In ladger no enter cash, bank.
    5) Purchase, A/P, A/R, sale, with draw, depreciation no entries in cash.

3.3 Sale Tax Calculation
Sale tax is gorvement duty for the products. The products are cycled in the market, the manufacturing companies
are calculated the Retail price for customer. In retail price is calculated the price with sale tax.
The sale tax calculation steps are the following,
Sale tax ACT 1990             Sale tax ACT different in different countries
Income Tax
SALE Tax 15%                 (Account to production sale tax may be different countries)
Customdaty (import)Central Excise duty.VAT (value additional Tax)




                                          Fig 3.3 Sale tax calculation I
                                                        11
                                   Fig 3.4 Sale tax calculation II

3.3.1 Sale Tax Documents

Sale tax documents are maintained the sale taxation process of the offices and production
companies. In the office, sale tax detection of the employee salary. In the production and
manufacturing companies, sale tax detection in the product and is generated the retail price. Sale
tax documents are the following Sale Tax Invoice, Purchase Register (input sale tax register),
Sale register (out put sales tax register), Stock register (summary make)
Sale Tax Return and payment Challan.

Sale tax documents are prepared for different purpose, sale tax invoice is prepared for product
is sold with sale tax gorvement duty the manufacture companies. After sale duty clear the
condition of product price is retail price. Purchase register is used for stock record any
warehouse product of company which are supplied the manufacturer companies in the market
by stock price and the shop keeper is purchase the product in the retail price, entry record the
purchase register which are bought the companies. Sale register is record the products which
are sold by the companies with retail price, in the retail price is included the sale tax and the
customer is bought. Stock register is record the stock in the warehouse companies and is

                                                 12
generated the summary. Sale Tax Return and payment Challan is prepared to purchase and sell
the products. The company is bought the products in the manufacturer dealer and other
possibility whole sale dealer in the whole seller rate, the sale tax payable is recorded.




                                     Fig 3.5 Performa Chalan

3.3.2 Tax Report For Employee Salary

Salary tax is detected the employee salary. The accountant of the company is prepared the
salary report of companies employees. The nature of taxation employee salary is 2% or
accounting rules of companies. From employee salary is detected the salary tax, without tax
detection the salary is the basic salary. Few companies are package of house rent, utilities,
medical and car allowances.

Employee designations is divided the different categories, system analyst, software developer,
and network administrator in the computer field, accountant is calculated of spent expanses of
employees salary and generated the employee salary reports. The tax report is may be possible
which included basic salaries, allowances and with detected the salary tax and calculated, the

                                               13
sum of salary is got.




                        Fig 3.6 Taxation of employee salary




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Chapter 4
Computerized Accounting

Computerized accounting is transections recorded and maintain the account of different
companies and bank by computerized accounting. By computerized accounting is generated
the chart of account, General Ledger, Income report and balance sheet.

Chart of account is created the all type of account official name. Chart of account is the engine
of computerized accounting to automatically generated and calculated the values of account,
chart of account is base the computerized accounting.




                                      Fig 4.1Chat Of Account

General ledger is the arch of accounting, after generated the chart of account to generate the
general ledger. By General Ledger is created the account entries. Account entry is base the
debit and credit, debit and credit are always same in the general ledger. Income statement is
the account report to generate the income report of company with complexity.

                                               15
Balance sheet is the final report of accounting and declared, what do it? Financially in monthly
bases and yearly bases.

4.1 How To Work In The Peachtree Accounting
Peachtree accounting is work to step by step, create the setup of new company.
Setup new company [click the option {Build own company, Accural, Real Time}]
Create Chart of Account
Maintain Chart of Account
Tasks General Journal Entries

Reports General Ledger
ReportCompany
Report for Financial statement<standard> Balance Sheet & Income statement.
           1. Dialog Box open, 2. In Time Frame = Range.
               From (period 12,16/1/05)
           2. Bank & Cash(Recon sail)
               Bank & Cash(Recon sail)
               TaskAccount Reconsil.
               Status bar(period select)

               setup C.A. maintain vendors
                reportCompany (Income statement and Balance sheet are created)

4.1.1 Microsoft FoxPro Accounting

Create new account(All account create)

Finance Chart of Account  Creation
Finance Chart of Account  Setup

1st setup

 Creation of A/C  Finance  Chart of A/C  Creation

2nd setup

Setup of A/c Press F2, select F2 Account

Setup  Acc Period
Foxpro (date { (01-07-2005) (10-07-2006) }




                                               16
3rd setup

Esc press, F1 press are saved to work Receipt and other Acc. Saved.
Account name = F2
For save = Esc
Start click.

Finance

Cash Voucher = debit
Bank voucher = credit
Journal Voucher = edit voucher


      Fpd
                                                                       Click Start button

                                    Start


                     FoxPro

See the profit loss summary

Final Account Profit and loss  Detail  working
Setup  Reindexing  Accounting year
Backup enter path D:\Msd\
ReportCompany

Cash voucher, inventory, Bank voucher, journal voucher, edit voucher
Link (final a/c setup, for profit & loss summary.)

Make a link

Link (cash,bank)
Finance chart of a/c. setup
F2  cash , bank
Esc button select
Closing stock record
Final Account  closing stock.




                                             17
  Fpd

                              Start



                                                              Click start button

See the profit loss summary

Final Account Profit and loss  Detail  working
Setup  Reindexing  Accounting year
Backup enter path D:\Msd\
ReportCompany

4.1.2 How To QuickBooks Enterprise

Ver.QuickBooks Enterprise solution: Manufacturing and whole sale Ed. 5.0
CompanyChart of Account  Account New
Company  Make General Journal entries
Reports  Account & Taxes
Reports Company & Financial  Profit & Loss Summary
(bank, cash ,A/R,A/P)
chart of acc.(select bank,cash, A/R,A//P)

4.1.3 How To Tall ees (6.3 version)
 Tally solution Pvt.Ltd.1988-2001
Tally 6.3.1single user
Chart of Account (make in ledger)
Account Info. Ledger
Ledger creation make chart of Account
Voucher= Entries pass
Journal F7, Sales F8, purchase F9, F10 memos
Voucher Entry = pass the Entries
For bank open from contra voucher make entries
Accounts Info.
Configure=In Gateway of Tally= create company
Gate of Tally
For entry pass voucher entry option select.

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Pole & Company Completed the following transaction during the Financial year july 1 2004 to june 30, 2005.
    1- 1-7-04 started business with cash US $/other Currency 8000US$
    2- 1-7-04 cash paid office rent US $/other Currency 1500US$
    3- 3-7-04 purchase furniture for cash US $/other Currency 2500US$
    4- 5-7-04 bank account open in Draghi Bank US $/other Currency 800US$
    5- 5-7-04 purchase Merchandise on credit from Pole and company US $/other Currency 500US$
    6- 10-7-04 sold mer. On credit to zaheer trading US $/other Currency 800US$
    7- 22-7-04 Mr. Pole withdraw cash US $/other Currency 200US$ for personal use.
    8- 2-8-04 paid salaries expanse by cheque US $/other Currency 85US$
    9- 30-6-05 15% dep. On furniture US $/other Currency 72 (72*15/100)
                                         M/S Pole and Company
                                      For the month of June 30, 2005
                                         General Journal entries
                                                   Or
                                              Trail Balance
 Date                  Particular                            P.R.    Dr.                    Cr.
 1-7-2004              Cash                                          80000
                           Capital                                                          80000
                       (Started business with cash)
 1-7-2004              Office rent                                             1500
                                   cash                                                     1500
                       (cash paid for office rent)
 3-7-2004              Furniture (pur.)                                        2500
                                cash                                                        2500
                       (furniture purchased on cash)
 5-7-2004              Bank                                                    800
                                Cash                                                        800
                       (bank account open in Draghi)
 5-7-2004              Purchase                                                500
                                A/P                                                         500
                       (Mer. Pur.on credit from Asif & co)
 10-7-2004             A/R                                                     800
                           Sale                                                             800
                       (sold mer. On credit to zaheer)
 22-7-2004             Cash                                                    200
                             Bank                                                           200
                       (Mr. Saqlain withdrew cash)
 2-8-2004              Salaries Exp.                                           85
                                    A/P                                                     85
                       (paid salaries exp. On cheque)
 30-6-2005             Dep.(Furniture& fixture)                                72           72
                                      Cash                                                  72
                       (15% dep. On furniture)

                                        Table 4.1Double entry system
                                                      19
4.2 Register Maintain
Register is maintain different criteria

   1. Journal Register
   2. Receipts Cash book for the Month of June 2005 payments.
   3. Index and Ledger(in ledger different type of accounts are written)

By account computer operator, data are entered the accounting software which are put the
registers.

4.3 Voucher Maintain
Vouchers are Debit voucher, Credit voucher and Journal voucher. In the previous chapters,
how are created the vouchers. When manually generated then data of vouchers are put in the
account software.

4.4 Chart Of Account
Chart of account in computerized accounting of Medico Company are describe in below




                                      Fig. 4.2 Chart of Account

                                                 20
Chart of account in computerized accounting of Mountian Company are describe in below




                                  Fig. 4.3 Chart of Account

Account No.                            Particular
001-000                                Capital
001-001                                Arif Capital
005-000                                CREDITORS/SUPPLIES
005-001                                A/P(LATIF & CO.)
050-000                                FIXED ASSETS
050-001                                FURNITURE & FIXTURE
055-000                                STOCK
055-001                                OPENING STOCK
100-000                                DEBTORS/CUSTOMERS
100-001                                ACCOUNT RECEVIABLE (NADEEM TRADING)
110-000                                CASH & BANK
110-001                                CASH
110-005                                Draghi Bank

125-000                                SALES
125-001                                SALE

123-002                                SALES RETURN & ALLOWANCE
123-003                                PURCHASES
125-005                            PURCHASES
130-000                            PUR. RETURN & ALLOWANCE
130-001                            ADMI.,SELLING & FINANCE CHARGES
130-005                            SALARIES EXP.
135-000                            TELEPHONE EXP.
135-001                            OTHER EXP.
135-005                            ACCOUNT RECEVIABLE (OTHER)
135-010                            DEP. EXP.

          Table 4.2 Tally and FoxPro chart of account are Avest Corporation




                 Fig 4.3 Chart of Account of POAL CORPORATION




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                                    The End

								
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