Accounting System

Will we need to spend more time understanding the nature of our business as IT becomes more advanced? To the question, "How do you think the world works?", I answer that it is beneficial in the sense that if you can understand the mechanics of business, you can imagine how the world works. If you understand bookkeeping, you can imagine the movement of goods, money, and cash, and you can also imagine the structure of the company's operations.

The Corona pandemic is the perfect opportunity to review cost accounting from the perspective of improving profits, and it is important to have a management accounting element that allows you to see operating income, which is calculated by subtracting operating income from sales by aggregating not only manufacturing costs but also cost of sales and SG&A expenses, and it is necessary to change the mindset from a cost center to a profit center.

We examine ways to improve profitability from an accounting perspective and a supply chain perspective, and consider ways to improve business operations with IT infrastructure. If we try to change the way we work to improve business efficiency, we need to change the flow and structure of business data, and systematization is inevitable.

The three financial tables, the income statement, the balance sheet and the cash flow statement, are the world's standard formats for expressing corporate activities in terms of the movement of goods, money and cash, and they are knowledge that should be systematically understood in order to generate new ideas based on the essence of business operations, even if the systemization of business operations has progressed.

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.

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.

Japan's National Tax Agency has published a tax policy for profits generated by virtual currency trading.

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.

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.

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.

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.

When the inventory based on the actual input in the production control system is in the production control location, the outflow is an incurred expense and the inflow is recorded in the asset account as work in process inventory, but when the inventory is in the sales control location, the inflow is the cost of production and the outflow is recognized as cost of sales.

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.

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.

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.

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.

However, the P/O price issued to the subcontractor includes material cost and processing cost only in the case of paid supply and processing cost only in the case of free supply.

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.

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.

In the case of Indonesian domestic transaction, the month of Faktur pajak should be the same as the month of invoice date, but this means that taxation should be done in the month of invoice date.