Review of Accounting System of Chic Paints Ltd
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- Date Submitted: 02/21/2015 11:28 PM
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ASSIGNMENT-REVIEW AND EVALUATE THE ACCOUNTING SYSTEM
TASK 1
RECORD KEEPING SYSTEMS
1I Financial reports enable an organization know its financial position from time to time or for a particular period. They help an organization keep track of its financial management through reports like cash flow statements, income and expenditure statements, budget monitoring, budgetary information and other key financial indicators or issues.
Relevant Information Technology systems like windows 7 loaded with Microsoft Office 2013 version, Microsoft office excel 2010 are put in place for recording of all accounting transactions.
It is suitable and vital for an organization`s current reports to meet organizational needs otherwise there would be no need to budget. It is worth noting that organizational needs, objectives and goals are presented in a form of budget hence the need for current reports both income and expenditure to go hand in hand with the organization budget in order to give to true financial position.
INTERNAL SYSTEM CONTROL
1II Internal controls support the accounting system by enabling segregation of duties across the organization i.e. no transaction or contract would be started and completed by one employee without interference of another. There will be procurement (inventory control), receivables, payables and payroll, each have its system rights for personnel placed there. However, these systems would be linked at some stage, such that when a transaction is completed the General Ledger and Trial Balance would be updated automaticaly for easy production of financial reports.
Types of internal controls in place are:
* A Sage 50 payroll system put in place to manage company salaries, wages in a more efficient and effective manner. It is deliberately not intergraded with the main accounting system to ensure confidentiality.Intergration is done through journals.
* a standard costing and variance analysis system is used to monitor and...
TASK 1
RECORD KEEPING SYSTEMS
1I Financial reports enable an organization know its financial position from time to time or for a particular period. They help an organization keep track of its financial management through reports like cash flow statements, income and expenditure statements, budget monitoring, budgetary information and other key financial indicators or issues.
Relevant Information Technology systems like windows 7 loaded with Microsoft Office 2013 version, Microsoft office excel 2010 are put in place for recording of all accounting transactions.
It is suitable and vital for an organization`s current reports to meet organizational needs otherwise there would be no need to budget. It is worth noting that organizational needs, objectives and goals are presented in a form of budget hence the need for current reports both income and expenditure to go hand in hand with the organization budget in order to give to true financial position.
INTERNAL SYSTEM CONTROL
1II Internal controls support the accounting system by enabling segregation of duties across the organization i.e. no transaction or contract would be started and completed by one employee without interference of another. There will be procurement (inventory control), receivables, payables and payroll, each have its system rights for personnel placed there. However, these systems would be linked at some stage, such that when a transaction is completed the General Ledger and Trial Balance would be updated automaticaly for easy production of financial reports.
Types of internal controls in place are:
* A Sage 50 payroll system put in place to manage company salaries, wages in a more efficient and effective manner. It is deliberately not intergraded with the main accounting system to ensure confidentiality.Intergration is done through journals.
* a standard costing and variance analysis system is used to monitor and...