Accounting System


Accounting System

Basic knowledge that must be understood even as the system becomes more automated


The other day, my friend who runs an accounting office in Jakarta told me that he was going to start a bookkeeping class for Indonesian accountants of Japanese companies, and I noticed that there are no accounting schools like TAC or Ohara Bookkeeping School in Indonesia.


Accounting System

Accounting that incorporates the time axis into the three-dimensional real world and thinks in four dimensions


The real world is a three-dimensional world of up, down, left and right, front and back, and the transactions that occur in this space are recorded. When you buy something and pay money or pay by credit, the thing becomes your own.


Accounting System

Deciphering events from an accounting perspective


Sales from the business are repeated under the constraint of having to replenish cash in the checking account before funds are shorted, and if you can't get a concrete picture of this basic constraint of company continuity and the flow of money behind the glittering events described above, you'll get a sense of a shade of shenanigans.


Accounting System

Transaction recognition methods on an accrual basis


The reason why sales recognition is made on the date of delivery of goods or provision of services is that the basis for sales recognition is considered to be "the date on which it can be established that the goods can be billed and paid = the date on which a receivable can be recorded", and sales and receivables are inseparable, occurring simultaneously.


Accounting System

Credit economy where intangible values such as brand power and credit are valued


In mark-to-market accounting, total market value, as measured by stock prices, is on-balanced, but invisible values such as brand power, creditworthiness, and know-how still exist off-balance sheet, and the credit economy (valuation economy) has the characteristic of actively valuing these intangible assets and putting them into the market economy.


Accounting System

Adjusting Entries - Deferred Expense, Supplies, Deferred Revenues


We are going to talk about adjusting entries. Specifically in this segment we'll talk about two adjusting entry situations, prepaids and supplies. So let's get right into the material by asking the obvious quesiton what is an adjusting entry. And adjusting entry is merely a journal entry that is made at the end of the month.


Accounting System

Cash basis vs Accrual basis


Revenue recognition   Cash Basis or Accrual Basis We will be comparing and contrasting the cash basis accounting versus accrual basis accounting. What are these accounting systems? These are two different types of accounting methods by which a company can maintain their records. How does a company know which one of these methods to use? Well it depends on their individual circumstances. But as a broad guideline smaller companies and service companies trend to use the cash basis accounting. Larger companies and companies that are selling inventory or maintain inventory trend to use the accrual basis accounting. Completes work in ...


Accounting System

The rules of debit and credit


I am going to show you how to remember the rules of debits and credit, so you will know how to prepare financial statements using these rules. So to help you out I have put some information behind me here on the whiteboard.


Accounting System

Balance Sheet, Profit and Loss Statement, Cash Flow Statement


Balance sheet is nothing but another financial document that we accomplished prepared to provide a user with more information about the financial potition of a company. you can look up your textbooks for a more formal definition.


Accounting System

Closing Entries


Let's talk about why do we close the books. The best analogy is one that I read years back in a textbook it was a sports analogy and I'm going to paraphrase that to help us understand this closing process a little better. Let's assume that the Yankees and the Orioles two baseball professional teams are playing each other.


Accounting System

What depreciation means for cash flow


The factors that reduce cash are the receivables that should have been received at the time of sales, and the factors that increase cash are the liabilities that should have been disbursed at the time of purchase, and the depreciation that was recorded as an expense without expenditure.


Accounting System

Entities in the Indonesian supply chain that bear PPN and PPH value added and income tax


The VAT paid upfront in the supply chain is borne by the end consumer who does not charge 10% VAT due to the sales activity, resulting in the payment from the consumer to the tax office being made on behalf of each business.


Accounting System

Statements of cash flows and foreign exchange gains and losses


Since the direct method calculates the balance of cash and cash equivalents by aggregating the pluses and minuses of cash and deposits (Cash/Bank) into transaction units (showing the total amount), it is necessary to adjust the translation of foreign exchange gains and losses related to cash and deposits among the unrealized foreign exchange gains and losses.


Accounting System

Net income becomes retained earnings and is disposed of as profit.


The reason why it is said that a company's retained earnings do not necessarily exist in the company as cash deposits is that even if net assets increase by transferring profits and losses to retained earnings, accounts receivable, which is the substance of earnings, will eventually be converted into cash and deposits, and the balance will decrease due to capital investment and repayment of loans, etc., independently of the movement of net assets.


Accounting System

The idea of debit and credit


If we consider the source of the payment as the basis, we can say that debit is an asset (debit) and credit is a liability (credit), while debit is a right to claim and credit is an obligation to be claimed, giving the other party the right to issue a debit note to the other party.


Accounting System

Memproses dengan mengirim dan menerima kriteria berdasarkan prinsip akrual


The accrual basis is independent of cash receipts and disbursements. Since revenue and expenses are recorded at the time of transaction occurrence, sales (revenue) and purchases (expenses) are recognized at the time of shipment and arrival, and age management (aging) is also managed based on the recording of receivables and payables, and invoices are only a unit of billing and payment and a unit of money movement.


Accounting System

Capital lease agreements that are depreciated as leased assets


An operational lease is the same as an effective rental of the asset of the leasing company, capital lease (finance lease from the leasing company) = sale and leaseback is your own leased asset, so you will incur depreciation and transfer to the asset at the end of the lease term.


Accounting System

Implementing a business system from the perspective of management


By converting indirect work hours into direct work hours, fixed costs can be converted into variable costs (purchasing costs), and even if the wage rate (how much per hour) is the same for the same working hours and the same cost (salary), increasing the direct work hour ratio can increase volume and increase operating income.


Accounting System

Indonesia's transfer pricing issues reminded me of the name Cayman Islands


If you sell your products at your friend's price or to an overseas branch at a discounted price, your taxable income will be small and you will be suspected of receiving an off-balance sheet back margin, or you will be suspected of transfer pricing because it will be taxable income made by the local company with a large profit margin.


Accounting System

Data discrepancies in business systems that tend to occur at the end of the month


Most of the data discrepancies that occur during the operation of business systems in Japanese manufacturers in Indonesia, such as discrepancies between the balance of receivables and payables and the balance in GL, discrepancies between the list of receivables and sales, and problems with inter-functional coordination of business systems.