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Accounting Process - Coggle Diagram

- - - - Single entry system - simple narrative/memorandum entry only, capital maintenance approach
      - double entry system - each transaction is recorded in 2 parts, debit and credit (regardless of gaano karaming transaction basta parehas meron ang debit and credit; concept of duality and equilibrium
    - - Special journal - promotes efficiency in recording similar transactions e.g SJ, CR, PJ, CDJ inventories related only
      - general journal - to record transaction not recorded in special journal e.g dep'n, PRA/SRA, discounts, stc...
  - - - General ledger - all accounts appearing in chart of accounts, usually maintained by general accountants
      - Subsidiary ledger - device used storing details of certain general ledger account
        
        note: all subsidiary ledger account are GL account, but not all accounts in GL has subsidiary ledger and are controlling accounts
        
        break down of amounts in GL per customer
        
        maintained by dep't e.g AP dep't, AR dep't
    - - real, nominal, mixed (for adjusting entries)
      - contra, adjunct: for valuation purpose
  - - - control device that helps eliminate accounting errors like transposition and transplacement
    - - journalizing/posting an entry twice
      - classification error (wrong account but same side)
      - omitting entire entry of transaction (both debit and credit side)
  - - - unadjusted t-bal
      - adjusting entries
      - adjusted t-bal
      - IS
        
        total debits > total credits = net loss
        
        total debits < total credits = net income
      - BS
        
        total debits < total credits = loss
        
        total debits > total credits = net income (yung kulang nasa credit side from IS)
  - - - recording prepaid expense
        
        expense method
        
        orig payment - dr. expense account
        
        cash basis
        
        adjusted based on UNEXPIRED PORTION
        
        asset method
        
        orig. payment - dr. asset account
        
        accrual basis
        
        adjusted on EXPIRED PORTION
        
        BOTH METHOD WILL COME UP WITH SAME BALANCE
      - recording unearned income
        
        income
        
        receipt of income - cr. income account
        
        cash basis
        
        adjusted for UNEARNED PORTION
        
        Liability method
        
        receipt of income - cr. liability account
        
        accrual basis
        
        adjusted for EARNED PORTION
        
        BOTH METHOD WILL COME UP WITH SAME BALANCE
  - - - promote consistency of accounting procedure
      - promote convenience in recording next period year end e.g imprest fund
      - facilitate recording of cash receipts/disbursement in next accounting period (promotes cash basis of accounting)
    - - required:
        
        prepaid expense under expense method
        
        accrued income
        
        accrued expense
        
        deferred income under income method