You were hired to assist Ashton Fleming in designing an accounting system for S&S. Ashton has developed a list of the journals, ledgers, reports, and documents that he thinks S&S needs (see Table). He asks you to complete the following tasks:
a. Specify what data you think should be collected on each of the following four documents: sales invoice, purchase order, receiving report, employee time card.
b. Design a report to manage inventory.
c. Design a report to assist in managing credit sales and cash collections.
d. Visit a local office supply store and identify what types of journals, ledgers, and blank forms for various documents (sales invoices, purchase orders, etc.) are available. Describe how easily they could be adapted to meet S&S’s needs.
TABLE Documents, Journals, and Ledgers for S&S
TITLE | PURPOSE |
Documents |
|
Sales Invoice | Record cash and credit sales of merchandise |
Service Invoice | Record sales of repair services |
Delivery Ticket | Record delivery of merchandise to customers |
Monthly Statement | Inform customers of outstanding account balances |
Credit Memo | Support adjustments to customer accounts for sales returns and allowances and sales discounts; also support write-off of uncollectible accounts |
Purchase Order | Order merchandise from vendors |
Receiving Report | Record receipt of merchandise from vendors, indicating both quantity and condition of items received |
Time Card | Record time worked by employees |
Specialized Journals |
|
Sales | Record all credit sales |
Cash Receipts | Record cash sales, payments from customers, and other cash receipts |
Purchases | Record all purchases from vendors |
Cash Disbursements | Record all cash disbursements |
General Journal | Record infrequent, nonroutine transactions; also record adjusting and closing entries |
Subsidiary Ledgers |
|
Accounts Receivable | Maintain details about amounts due from customers |
Accounts Payable | Maintain details about amounts due to vendors |
Inventory | Maintain details about each inventory item |
Fixed Assets | Maintain details about each piece of equipment and other fixed assets |
General Ledger | Maintain details about all major asset, liability, equity, revenue, and expense accounts |
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