What Is Accounting Systems? Special Journals & Subsidiary Ledgers
What is accounting systems? Describe about special journals & subsidiary ledgers.
The company under review is the JB Hi Fi and is the leading retailer of the consumer electronics. The company manufactures the video games and also the blu-rays, DVD’s and the CD’s. The company is the leading chain store which is headquartered in Melbourne.
In the smaller accounting treatment, the book keeper may go on to record the various journal entries. In a company, the general leader accountant is duty bound to record the journal entry and ensure the control over the manner in which the journal entries have been recorded.
In respect of the format of the journal entry, at a minimum, the accounting journal entry must include the following:
- Each account has one credit and one debit
- The date on which the journal entry has been passed
- The period of accounting during which the journal entry was prepared
- The name of the person which is making that entry is present
- The managerial authorisations are present
It is very much common for the accountants to commit frauds by the use of various journal entries than through the use of the common transactions that exists. This could include the supplier invoices and the creation of the customer invoices. The main reason behind the same is that there are many of the common transactions that would have the controls of the systems built around them and this is designed for many of the different reasons. There are a very lesser number of controls over the journal entries that makes the creation of the fraudulent transactions easier. These are the transactions that are very difficult for the recording of the amounts that are not material and these are not likely to spot the transgressions.
- Cash and bank
- Accounts receivables
- Plant and equipment
- Land and building
- Accumulated depreciation
- Depreciation expense
- Office supplies expense
- Expense accounts
- Accounts payables
- Loans and borrowings
- Short term investments
- Long term investments
- Shareholders’ equity
- Retained earnings
- Provisions
- Revenue
- Cost of sales
- Income tax expense
- Other assets
- Other liabilities
The following is the statement of the cash flows provided in the annual report of the company:
|
Particulars |
(Amounts in $ in thousands) |
||
|
Receipts from customers |
40,12,130 |
38,32,979 |
|
|
Payment to suppliers and employees |
-37,67,211 |
-37,23,982 |
|
|
Interest and bill discounts received |
552 |
402 |
|
|
Interest and other finance costs paid |
-5,689 |
-7,496 |
|
|
Income taxes paid |
-59,886 |
-60,577 |
|
|
Net cash inflow from operating activities |
1,79,896 |
41,326 |
|
|
Acquisition of non-controlling interests |
-2,400 |
-3,000 |
|
|
Payments for plant and equipment |
-42,466 |
-35,914 |
|
|
Proceeds from sale of plant and equipment |
496 |
674 |
|
|
Net cash (outflow) from investing activities |
-44,370 |
-38,240 |
|
|
|
|||
|
Proceeds from issues of equity securities |
3,125 |
21,523 |
|
|
Proceeds / (repayment) of borrowings |
-40,113 |
54,063 |
|
|
Payments for debt issue costs |
-484 |
-64 |
|
|
Payment for shares bought back |
-4,970 |
-25,830 |
|
|
Share issue and buy-back costs |
-24 |
-118 |
|
|
Dividends paid to owners of the Company |
-87,174 |
-77,183 |
|
|
Net cash (outflow) from financing activities |
-1,29,640 |
-27,609 |
|
|
Net increase / (decrease) in cash and cash equivalents |
5,886 |
-24,523 |
|
|
Cash and cash equivalents at the beginning of the financial year |
43,445 |
67,368 |
|
|
Effects of exchange rate changes on cash and cash equivalents |
-200 |
600 |
|
|
Cash and cash equivalents at end of year |
49,131 |
43,445 |
1. Depreciation expense: this is found in the statement of profit or loss.
2. Amortisation expense: this is found in the statement of profit or loss.
3. Employee benefit expense: this is found in the statement of profit or loss.
4. Financial service fees revenue: this is found in the statement of profit or loss.
5. Lease and occupancy expenses: this is found in the statement of profit or loss.
The following is the statement of profit or loss:
|
|
(Amounts in $ in thousands) |
||
|
Particulars |
2015 |
2014 |
|
|
Revenue |
36,52,136 |
34,83,775 |
|
|
Cost of sales |
-28,53,883 |
-27,27,794 |
|
|
Gross profit |
7,98,253 |
7,55,981 |
|
|
Other income |
631 |
520 |
|
|
Sales and marketing expenses |
-3,74,084 |
-3,55,694 |
|
|
Occupancy expenses |
-1,60,216 |
-1,48,969 |
|
|
Administration expenses |
-27,711 |
-27,600 |
|
|
Other expenses |
-35,414 |
-32,716 |
|
|
Finance costs |
-5,927 |
-8,845 |
|
|
|
|
||
|
Profit before tax |
1,95,532 |
1,82,677 |
|
|
Income tax expense |
-59,021 |
-54,230 |
|
|
Profit for the year |
1,36,511 |
1,28,447 |
|
|
Attributable to: |
|||
|
Owners of the Company |
1,36,511 |
1,28,359.00 |
|
|
Non-controlling interests |
88.00 |
||
|
Earnings per share |
|||
|
Basic (cents per share) |
137.91 |
128.39 |
|
|
Diluted (cents per share) |
136.46 |
126.89 |
|
The following is the Balance sheet of the company:
|
|
(Amounts in $ in thousands) |
||
|
Assets |
2,015.00 |
2,014.00 |
|
|
Current assets: |
|||
|
Cash and cash equivalents |
49,131.00 |
43,445.00 |
|
|
Trade and other receivables |
81,480.00 |
70,745.00 |
|
|
Inventories |
4,78,871.00 |
4,58,625.00 |
|
|
Other current assets |
7,416.00 |
5,332.00 |
|
|
Total current assets |
6,16,898.00 |
5,78,147.00 |
|
|
Non-current assets: |
|||
|
Plant and equipment |
1,76,208.00 |
1,81,564.00 |
|
|
Deferred tax assets |
17,363.00 |
14,909.00 |
|
|
Intangible assets |
84,541.00 |
85,218.00 |
|
|
Other financial assets |
3.00 |
3.00 |
|
|
Total non-current assets |
2,78,115.00 |
2,81,694.00 |
|
|
Total assets |
8,95,013.00 |
8,59,841.00 |
|
|
Liabilities |
|||
|
Current liabilities: |
|||
|
Trade and other payables |
3,25,604.00 |
3,02,979.00 |
|
|
Provisions |
40,585.00 |
36,840.00 |
|
|
Other current liabilities |
4,566.00 |
4,111.00 |
|
|
Current tax liabilities |
9,474.00 |
8,184.00 |
|
|
Other financial liabilities |
107.00 |
79.00 |
|
|
Total current liabilities |
3,80,336.00 |
3,52,193.00 |
|
|
Non-current liabilities: |
|||
|
Borrowings |
1,39,461.00 |
1,79,653.00 |
|
|
Provisions |
6,073.00 |
8,699.00 |
|
|
Other non-current liabilities |
25,664.00 |
24,638.00 |
|
|
Other financial liabilities |
– |
25.00 |
|
|
Total non-current liabilities |
1,71,198.00 |
2,13,015.00 |
|
|
Total liabilities |
5,51,534.00 |
5,65,208.00 |
|
|
Net assets |
3,43,479.00 |
2,94,633.00 |
|
|
Equity: |
|||
|
Contributed equity |
56,521.00 |
58,383.00 |
|
|
Reserves |
17,636.00 |
16,265.00 |
|
|
Retained earnings |
2,69,322.00 |
2,19,985.00 |
|
|
Total equity |
3,43,479.00 |
2,94,633.00 |
|
The following are the required journal entries:
|
Transaction |
Particulars |
Debit |
Credit |
|
|
Cash receipt from customers |
Cash |
|||
|
Sales |
||||
|
Cash paid to suppliers |
Accounts payable |
|||
|
Cash |
||||
|
Dividend paid |
Dividend expense |
|||
|
Cash |
||||
|
Payment for plant and equipment |
Plant and equipment |
|||
|
Cash |
||||
|
Depreciation expense |
Depreciation expense |
|||
|
Accumulated depreciation |
||||
|
Amortisation expense |
Amortisation expense |
|||
|
Asset |
||||
|
Employee benefit expense |
Employee benefit expense |
|||
|
Profit and loss account |
||||
|
Financial service fees revenue |
Cash/Accounts receivables |
|||
|
Financial service fees revenue |
||||
|
Lease and occupancy expenses |
Lease and occupancy expenses |
|||
|
Profit and loss |
||||
References:
Accounting Basics for Students. (2016). Basic Accounting Journal Entries.
Accountingtools.com. (2016). Accounting Journal Entries – Accounting Tools.