Btn 7 - Geiger

Topics: Accounts receivable, General ledger, Accounting software Pages: 2 (735 words) Published: August 19, 2011
BTN 7-4 – Page 312
TO: Wendy Geiger
DATE: June 19, 2011
SUBJECT: Manual Accounting Modifications for Expanded Business M E M O R A N D U M
This memo is to advise you of the best possible ways for you to modify your current manual accounting system to accommodate the expanded business activities for your retail store. Pursuant to our conversation, you generally obtain your goods on credit using purchase orders, and your sales are primarily cash. You currently keep your manual accounting system using a general journal and a general ledger, and you make one summary entry for cash sales at the end of each business day. Due to increased demand for your products and higher sales volume, including credit sales, maintaining the accounting records has become time consuming, but you would like to continue with your manual system. Allow me to provide pertinent information that will assist you in continuing your manual system in the most efficient way. The accounting information system is one that collects and processes relevant data from transactions, and organizes them into relevant reports. This system is also used to report and record the exchange of goods and/or services. It is critical for you to understand how and what transactions are occurring in your business. A small business like yours can be effective with a manual process and with the use of special journals and subsidiary ledgers. With the issues you mentioned in mind, most of your transactions can be categorized into the special journals with the use of four individual journals to complement the general journal you are currently using. Special journals are used to record and post transactions, and are uniquely designed for each business, but for most merchandising companies, the journals used are sales journals, for recording sales on credit; cash receipts journals, to record sales made by cash; purchases journals, for recording goods obtained on credit; and cash disbursements journals, for recording...
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