Question

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What journal entries do accountants do everyday? What is general ledger reconciliation? How do you reconcile...

What journal entries do accountants do everyday?

What is general ledger reconciliation?

How do you reconcile the general ledger (explain the steps from a real company perspective)?

Why do accountants need to do journal entries when accounting software can automatically create journal entries?

What are daily adjusting entries and give an example?

Expert Solution

Question: What journal entries do accountants do everyday?

Explanation: The Accountant do the journal entry as fall on particular day, either issue of Sale invoice, Receipt of purchase invoice, Advance received, Cash Deposit, Check Issued, Expenses incurred, Fixed Assets purchased and ready for use. Petty expenses incurred. Etc.

Question: General Ledger Reconciliation ?

Explanation: General Ledger reconciliation means reconciling the account balance of different ledger. For example, Whether cash payment of Salary is reflecting in the Cash Ledger book or not. Just like this reconciliation is made, so that double impact shall be therein.

Question: How do you reconcile the general ledger (explain the steps from a real company perspective)?

Explanation:

1. Match the Opening Balance as appearing in the Ledger. ( Same can be matched with the previous year financial Statements)

2. Current year recording: Determine all the transaction as transacted is recorded or not, its not like that only one side effect is been taken.

3. Adjustment review: Adjustment in respect of the closure value transaction shall be taken into account. For Example, Inventory valued at NRV or cost whichever is less. Prepaid expenses as paid in the beginning shall be charged to books pertaining for the period. Expenses not paid but accrued shall be provided in books.

4. Reversal: Where the provision is already made, same if paid during the period shall be reversed.

5. Ending Balance Review: The Ending balance depicts the complete effect of above all transactions, it should match with that of ending account balance. If mismatch persist the above process shall be followed again and again.

Question: Why do accountants need to do journal entries when accounting software can automatically create journal entries?

Explanation: The accountant need to do journal entry even though same is already passed by the ERP or system in place, the Accountant just keep check over such journal entries and check whether further adjustment is required in such statement or not. Adjustment entry or reversal shall be posted by the accountant itself.

Question: What are daily adjusting entries and give an example?

Explanation: The Daily adjustment entries

- Prepaid Expenses

- Advance receipt

- Accrued Expenses

- Depreciation

- Valuation of Inventory

For Example: Prepaid Rent for 12 Month paid at 24000 on 01.01.2020, however rent for one month is 2000.

Hence on end of January Month. Journal Entry is require to be passed to charge the rent expenses in the books

Date	Accounting Description	Debit	Credit
01.01.2020	Prepaid Expenses A/c Dr.	24000
	Cash A/c Cr.		24000
	( Being Rent for Whole Year Paid)
31.01.2020	Rent Expenses A/c Dr.	2000
	Prepaid Expenses A/c Cr.		2000
	( Being Rent Charged for the month of January)

ekkarill92 answered 1 year ago

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