Accounting (A-Levels)

Notes:

Use of computerized accounting:

o A computerized accounting system is a software app that automates
financial records and reporting processes to make it faster and more accurate
and easier.
o It reduces manual entries (double entry automatic), eliminates redundant
operations, and reduces risks.
o The accounting system is a set of procedures and record keeping systems for
managing the financial and operation activities.
o Method of tracking and managing the business finances.

Advantages:
o Calculations are done instantly times saved accurate calculation.
o Security is more tight and organized.
o Documents such as invoices are easily produced.
o Reports can be automatically generated

Disadvantage:
o Required expenditure or hardware, /software, or. Cost of setup
o Training takes time or only experienced people can handle it.
o The opening balances would have to be transferred if data is manually
recorded at the start of the business. Accounts need to be backed up
o Chances of error

Ways to ensure the security of the data with computerized accounting:

 o Make different user ideas. If multiple people are using the same device,
o Use strong passwords.
o Do not leave your device unattended

Manufacturing accounts:
That deal with products that are manufactured,
The purchases parts in the income statement will be replaced by the cost of
production in manufacturing accounts.

IAS 2: types of inventories:

Cost of prod. (working 1): Raw materials
Work in progress

Finished goods (I/S): OP inventory

CL inventory

The purchases part in the income statement will be replaced by the cost of
production in manufacturing accounts.
Trading Business (Income Statement):
Sales xxx
Less: cost of sales (xxx)
OP inventory (F.G) xxx
CL inventory (W1) xxx
Less: cl inventory (F.G) (xxx) (xxx)
____
Gross profit xxx

Add: other income xxx

Less: other expenses (xxx)
____
Profit of the year xxx
Working 1:
Cost of Prod.
Direct material (raw)
OP inventory of raw material xxx
Purchases of raw material xxx
Carriage inwards of raw material or finished goods xxx
Less: purchases returns of raw material (xxx)
Less: personal drawings if any given (xxx)
Less: Closing inventory of raw material (xxx) xxx

Direct labor xxx

Direct expenses xxx
_____
Prime cost xxx

Overhead costs
Indirect material xxx
Indirect labor xxx
Indirect expenses xxx
_____
Production cost xxx
OP work in progress xxx
CL work in progress (xxx)
_____
Factory cost of prod. xxx