General Ledger and Reporting System Process
- update G/L
- post adjusting entries
- prepare financial statements
- produce managerial reports
treasurer role in updating G/L`
provides information for journal entries to update the general ledger for nonroutine transactions such as the issuance or retirement of debt, the purchase or sale of investment securities, or the acquisition of treasury stoc
journal voucher file
where individual journal entries used to update the general ledger are stored
validity check
ensure that general ledger accounts exist for each account number referenced in a journal entry
Field (format) checks
ensure that the amount field in the journal entry contains only numeric data
zero-balance check
verify that total debits equal total credits in a journal entry
A completeness test
ensure that all pertinent data are entered, especially the source of the journal entry
audit trail
traceable path that shows how a transaction flows through the information system to affect general ledger account balances
Post adjusting entries process (5 categories of adjusting entries)
- accruals
- deferrals
- estimates
- revaluations
- corrections
accruals
These entries, made at the end of the accounting period, reflect events that have occurred but for which cash has not been received or disbursed
deferrals
made at the end of the accounting period, reflect the exchange of cash prior to performance of the related event. Examples include recognizing advance payments from customers as a liability and recording certain payments (e.g., rent, interest, and insurance) as prepaid assets.
estimates
These entries reflect a portion of expenses expected to occur over several accounting periods. Examples include depreciation and bad-debt expenses.
revaluations
These entries reflect differences between the actual and recorded value of an asset or a change in accounting principle
prepare financial statements
a closing journal entry is made to zero out all revenue and expense accounts in the adjusted trial balance and transfer the net income (or loss) to retained earnings.
XBRL, which stands for eXtensible Business Reporting Language
a programming language designed specifically to facilitate the communication of business information
-encode the data with machine-readable tags that explain what each data item means and then transmit it electronically in various formats to users. Thus, XBRL saves time and reduces the chances for data entry errors.
____ companies are required to use Xbrl
public
benefits of Xbrl
- efficiency
- consistency and accuracy
- accessibility
- enhanced analysis
