It is the first part of “Requirement: Recording monthly transactions” (Instructions & Flowcharts
p.10)For each item in this part, note the following:1. Use Transaction List A (The blue transaction sheet). {put the green one away}2. Use Option 2 – Chronological approach3. Understand the symbols:4. Ignore! You will think about it when you go through each transaction.5. Follow the seven-step process to record a transaction (This is what you need to do for thisSUA 1). Note Step 4 and 5 are done in the excel workbook.1) Read and analyze the transaction2) Find the appropriate flowchart(s) on pages 18 through 24 of the Instruction &Flowcharts book. Study the procedures to follow. Flowcharts details? What documents to be prepared and approved? What accounting entries you need to record? What internal control procedures3) Locate and prepare the documents if any are necessary for this transaction. Fill it outcompletely. You should take the role of the three employees of Waren.4) Record the transaction in journals if necessary. Use general journals only when no otherjournal is appropriate.5) Post individual items to subsidiary ledgers if necessary. Then , place a check mark in thepost reference columns to indicate that journal items have been posted6) SKIP this step. For this assignment, you do not need to “File the document inappropriate file tab”. But I suggest you keep your filled documents organized in aseparate folder for later submission7) Proceed to the next transaction and repeat the process.TO BE SUBMITTED2After finishing the 7-steps, fill in the blanks of the Word file called “SUA Transaction Table” foreach transaction (Posted on Canvas). Note that for some transactions, e.g. Transaction #1, Ihave filled out all the cells in the SUA Transaction Table. But you need to record thetransactions in your workbook!1. Submit the complete “Transaction Table” in Word file (to be graded) (85 Points)If a transaction does not require a certain item, type “NA” for that cell. For example, iffor a particular transaction, no journal entries need to be recorded, then put “NA” in thecell under Journals.2. Submit the excel workbook (won’t be graded for this part)3. Submit pictures of documents for those that are required (5 total to be submitted andgraded)You will need to manually fill out the following forms but not all the forms are required to besutmitted–Manually fill out the following forms (note not all forms below need to be submitted):? Doc#5 – 6891BR? Doc#6 – 732? Doc#7? Doc#9? Doc#12? Doc#13? Doc#16-328? Doc#17 – 74,75? Doc#18 – 34719? Doc#21? Submit documents needed for the following transactions only (35 points)? Transaction #10 (Doc#5, no need to submit doc#6)? Transaction #13 (3 docs)? Transaction # 15 (Just submit doc#7, no need to submit Doc#5, 6892R).? Please submit all forms in One single file. If you are not able to submit it in one file,clearly name each file using “A333-Sec1-JamesBond-Tran#1”.Required: For each file, Put the homework title, your section, and your name in the Title of thefile and name the file the same way “HWTitle_01-JamesBond”. Insert page numbers. Introduction
System Understanding Aid
(SUA)
VALERIE LI
SAN DIEGO STATE UNIVERSITY
Overview
• A project assignment designed to help you understand and
visualize the entire accounting process for a hypothetic
wholesaling business named Waren Sports Supply.
• The project uses a manual accounting system (more to
come later)
•Learning Objectives
✓Understand the entire accounting process;
✓Learn about common business documents
✓Learn about flowcharting and key internal controls
Parts of SUA Content Used in Class
Instructions and
Flowcharts
➢ Needed all the
time
Reference Book
➢ Needed all the
time
Document Folder
with real business
documents
➢ Needed for
Requirement I
Journals and Ledgers
➢ Not really needed. We use an excel
workbook (that have all the same
information as these two books).
Instructions and Flowchart Book
•Nature of this system project
•Preparation
Read before starting
the project
•Introduction
•Waren’s Accounting System and Policies
•Requirements
•Flowcharts
Needed for the entire
project
Reference Book
•Chapter 1 & 2 – Read carefully before starting the project
•Chapter 3,4, 5, & 6 – Skim and refer back when working on the project
•Chapter 7 – not required
Document Folder
and Documents
Note
Doc No.
•Doc #1: Transaction list – Use the Blue Transaction List (Doc
#1, Transaction list A). Put the green transaction list away!!!
•Doc #2: Chart of General Ledger Accounts (Very important!!!
As you need this information to record the journal entries (JE)
and post to ledgers.
•Doc #3: Price lists – find the product price (when you record
sales) and cost (when you record purchases) information
•Doc #4 – 27: Source documents
• Blank documents that you will complete
• Documents that have partially or completely prepared (could be from an external
party)
• Informational documents (Doc #1,2,3)
Journals and
Ledgers
U S E I N STRU C TOR P ROV I DE D
WO R K B O O K TO R ECOR D A L L
T R A NSAC TIO NS
Waren Sports Supply
•Business
• a distributor of sporting goods to colleges and universities
•Personnel (do not need to memorize)
• Ray Kramer : Salaried manager, makes cash deposits, bank reconciliations, signs payment authorization
forms, performs approvals (accounting entries, time record reports, purchase orders, credit sales, etc.)
• Jim Adams: Hourly employee, receives and prelists cash, prepares credit memos, keeps payroll records,
prepares payment authorization forms, and prepares journals and subsidiary ledgers
• Nancy Ford: Hourly employee, prepares purchase orders and sales invoices, ships and receives goods,
prepares shipping and receiving documents, and verifies cash receipts
•Chart of Accounts – in Doc #2 (note that not all accounts in the chart will be used in the project)
Requirements
• Recording monthly transactions that are incurred during
12/16-12/31/2022 – SUA 1
• Waren’s month-end procedures – SUA 2
• Waren’s Year-End Procedures – SUA 3
Flowcharts
•Instructions and Flowcharts book page 18-24
•Need to frequently refer back when working on SUA 1
Accounting Policies
•Inventory – Periodic
• Beginning Inventory (BI) + Purchases – Cost of goods sold (COGS) = Ending Inventory (EI)
• So Waren do not update inventory account each time they make a sale or purchase. Waren conducts a
physical count of inventory items at the end of each year to calculate COGS
•Depreciation
• Straight-line depreciation method for all fixed assets
Credit Terms
•Cash Discount: a discount offered to encourage sooner cash payment
•Waren’s credit terms:
• Customers: 2/10, Net 30
• Venders:
• Velocity Sporting Goods: 2/10, Net 30
• Other vendors do not offer cash discount
•2/10, net 30: 2% discount if paid within 10 days of invoice date, or full
payment if within 30 days.
Journals
•Journals
• General Journal – for non-repetitive transactions
• Special Journals
• Sales Journal
• Cash Receipts Journal
• Purchase Journal
• Cash Disbursements Journal
• Payroll Journal
For repetitive
transactions
Ledgers
• General Ledger – Summarizes the transactions in journals by
account balances
• Subsidiary ledgers
• Accounts receivable subsidiary ledgers – one ledger for one
customer
• Accounts Payable subsidiary Ledgers – One ledger for one major
vendor (transactions with less frequently used vendor are
posted on general ledger)
• Employee Earnings Subsidiary Ledgers – one ledger for each
employee
• Fixed asset subsidiary ledgers – one ledger for each type of fixed
asset
Overview of the Accounting
System
Chapter 1
Reference book
VALERIE LI
SAN DIEGO STATE UNIVERSITY
Accounting
Process
9.
SUA #1
Prepare closing
entries
➢ Requirement 1
(Ins.&Flow p.10)
8.
➢You need to record
the transactions in
transaction list A –
Alt1
➢Covers accounting
process #1 ~ #4
1.
Transactions
occur
2.
Prepare
documents
General
and
Specials
Journals
3.
Prepare
financial
statements
Record in journals
7.
4.
Prepare
adjusted trial
balance
Post to ledgers
6.
Adjusting
entries
5.
Prepare
unadjusted trial
balance
GL and
Subsidiary
Leddgers
Transaction
Occur
•Requirement I (Instructions and
Flowcharts p.10) – SUA 1
• Identify transactions
• Identify documents that you need to
prepare
• Determine if Journals need to be
recorded, and which ones
• Determine if transactions need to be
posted on ledgers, and which one
• Determine Journal entries
More to come later
Prepare Documents
•For each transaction, determine if you need to
prepare any documents
• Doc needed
• Accounting might be
needed
• No Doc needed
• Accounting might be
needed
Prepare Documents
Journals
•Journals
– Initial recording of transactions. All transactions should be recorded in a journal.
•Special Journals
• Sales Journal (SJ) – credit sale
• Cash Receipts Journal (CR)
• Purchase Journal (PJ) – purchase on account
• Cash Disbursements Journal (CD)
• Payroll Journal (PR)
For repetitive
transactions
•General Journal (G) – for non-repetitive transactions and transactions that can not recorded on
special journals.
Ledgers
• General Ledger – Summarizes the transactions in journals by account balances
• Every account has a general ledger.
• Companies design the number of general ledger accounts (Chart of Accounts). Varies across companies. Usually follows the financial
statements format
• All transactions recorded in journals need to be posted on general ledger periodically, in our case, monthly.
• For special journals, such as the sales journal, only post the monthly totals of each account on general ledger.
• For general journals, each individual transaction is posted to the general ledger
• General ledger of Balance sheet accounts includes the accumulated net total of all transactions since the inception f the company.
• Income statement accounts are closed to retained earnings (a stockholder’s equity account) at the end of year.
• Subsidiary ledgers
• Ledger to support the general ledger and keep details of a general ledger account.
• For accounts with subsidiary ledgers, post individual transactions to the subsidiary ledger but only the totals from journal to the general
ledger.
• The total balance of a subsidiary ledger should agree to the corresponding general ledger account.
• Accounts receivable ledgers – one ledger for one customer
• Accounts Payable Ledgers – One ledger for one major vendor (transactions with less frequently used vendor are posted on general ledger)
• Employee Earnings Subsidiary Ledger – one ledger for each employee
• Fixed asset subsidiary ledger – one ledger for each type of fixed asset
1. Credit sales (recorded in Sales journal (SJ), and post on AR subsidiary ledger)
Dr. AR_customer name (post on AR subsidiary ledger)
cr. Sales (in sales journal (SJ))
2. Cash receipts from credit sales (recorded in Cash Receipt Journal (CR), and post on AR
subsidiary ledger)
Dr. Cash (in Cash receipt journal (CR))
cr. AR_customer name (post on AR subsidiary ledger)
Common
Transactions
3. Cash sales (Recorded in CR)
Dr. Cash (in CR)
cr. Sales ( just put the credit in sales column in CR)
4. Purchase on account (recorded in Purchase Journal (PJ) and post on AP subsidiary
ledger for major vendors)
Dr. Purchase (in PJ)
Cr. AP_vendor name (AP subsidiary ledger)
5. Other purchases (recorded in Cash disbursement journal CD)
Dr. various expense acct.
cr. Cash (in CD)
6. Payroll (recorded in payroll journal (PR)) – explain later
At the end of months, all transactions will be posted to general ledger
Flow of Economic Events into the Journals and
Ledgers
Events
Journal
Entry
Post
Journal
GL
Post
Always go from
Journal to legers,
never directly put
transactions to
ledgers !!!
Subsidiary
Ledgers
Thanks to Professor Rebecca Perols for sharing the slide
Credit Sale to
Customer A
All totals should
agree among
journals and
ledgers
Month
End
Month
End
SUA #1 Recording Transactions ( 120 Points)
Required:
Appropriately document and record all transactions in the Transaction List A
Instructions:
It is the first part of “Requirement: Recording monthly transactions” (Instructions & Flowcharts
p.10)
For each item in this part, note the following:
1. Use Transaction List A (The blue transaction sheet). {put the green one away}
2. Use Option 2 – Chronological approach
3. Understand the symbols:
4. Ignore! You will think about it when you go through each transaction.
5. Follow the seven-step process to record a transaction (This is what you need to do for this
SUA 1). Note Step 4 and 5 are done in the excel workbook.
1) Read and analyze the transaction
2) Find the appropriate flowchart(s) on pages 18 through 24 of the Instruction &
Flowcharts book. Study the procedures to follow. Flowcharts details
➢ What documents to be prepared and approved
➢ What accounting entries you need to record
➢ What internal control procedures
3) Locate and prepare the documents if any are necessary for this transaction. Fill it out
completely. You should take the role of the three employees of Waren.
4) Record the transaction in journals if necessary. Use general journals only when no other
journal is appropriate.
5) Post individual items to subsidiary ledgers if necessary. Then , place a check mark in the
post reference columns to indicate that journal items have been posted
6) SKIP this step. For this assignment, you do not need to “File the document in
appropriate file tab”. But I suggest you keep your filled documents organized in a
separate folder for later submission
7) Proceed to the next transaction and repeat the process.
TO BE SUBMITTED
1
After finishing the 7-steps, fill in the blanks of the Word file called “SUA Transaction Table” for
each transaction (Posted on Canvas). Note that for some transactions, e.g. Transaction #1, I
have filled out all the cells in the SUA Transaction Table. But you need to record the
transactions in your workbook!
1. Submit the complete “Transaction Table” in Word file (to be graded) (85 Points)
If a transaction does not require a certain item, type “NA” for that cell. For example, if
for a particular transaction, no journal entries need to be recorded, then put “NA” in the
cell under Journals.
2. Submit the excel workbook (won’t be graded for this part)
3. Submit pictures of documents for those that are required (5 total to be submitted and
graded)
You will need to manually fill out the following forms but not all the forms are required to be
sutmitted–
Manually fill out the following forms (note not all forms below need to be submitted):
•
Doc#5 – 6891BR
•
Doc#6 – 732
•
Doc#7
•
Doc#9
•
Doc#12
•
Doc#13
•
Doc#16-328
•
Doc#17 – 74,75
•
Doc#18 – 34719
•
Doc#21
• Submit documents needed for the following transactions only (35 points)
•
Transaction #10 (Doc#5, no need to submit doc#6)
•
Transaction #13 (3 docs)
•
Transaction # 15 (Just submit doc#7, no need to submit Doc#5, 6892R).
• Please submit all forms in One single file. If you are not able to submit it in one file,
clearly name each file using “A333-Sec1-JamesBond-Tran#1”.
Required: For each file, Put the homework title, your section, and your name in the Title of the
file and name the file the same way “HWTitle_01-JamesBond”. Insert page numbers. Points will
be deducted if not following the instructions and you will receive a 0 if not submitted in a
WORD file.
2
SUA 1 – Transaction Table (85 points)
The table below lists what you need to do for each transaction. Please assume the employee role of Waren Sports and fill in each missing cell
with appropriate actions. If no action is needed for that transaction, type in “NA” in the corresponding cell.
For each transaction, I have completed some tasks. You only need to fill in the blank cells. Fill in the blank cells in different color please.
Instructions:
1. Source Documents – Fill in the documents you need to prepare for this transaction . Clearly write out Document #, and name, and the
specific number of that particular document because some documents have multiple copies. Manually complete all document required
in (SUA 1 Assignment).
2. Journals
– Fill in the name of journals you use to record this transaction. Also specify what accounts to debit, what accounts to credit, and the dollar
amount. You do not need to put the customer account number or vendor account number here. If a transaction needs to be recorded under
“Other G/L”, you need to write out the account number based on the Chart of Accounts.
– Record the transaction in corresponding journals in the workbook.
3. Ledgers (These are all subsidiary ledgers)
– Fill in the name of the subsidiary ledger to record the transaction.
– Also fill in the name of customer or vendor names
– Specify debit or credit and the dollar amount
– Record the transaction in the subsidiary ledgers in the workbook
4. JE
– Write out the complete journal entries for this transaction.
– Nothing to be recorded in the workbook regarding this column
Tran# Source Documents
1
-Doc #5: Bill of lading 6890BR
-#6: Sale invoice # 731
2
#9 cash receipts prelist
3
4
#16 purchase order No.328
Journals (Fill in here and
workbook)
Sales Journal:
12/16 Rosemount U:
Dr. AR G/L $15,490
Cr: sales $15,490
NA
Purchases Journal:
Other G/L 40300: Dr. 830.25
Cr. AP G/L $830.25
Ledgers (Fill in here and
in the workbook)
AR subsidiary ledge:
(Rosemont) Dr. 15490
JE
AR subsidiary ledge:
(Branch College)cr. 1656
Cash:
1622.88
Sales discount $33.12
AR_Branch College
$1656
Office supplies 830.25
AP_Chicago Office
830.25
NA
Ap subsidiary (Chicago
office): cr 830.25
5
#9 cash receipts prelist
NA
6
7
#12 return request (sign)
#20 checks#1152
Need to write “paid” on vendor
invoice (Doc #18, first security
insurance)
N/A
NA
NA
8
9
#17 receiving report NO.74 (note
everything is received except only
Cash Disbursements Journal:
Cr. $1710
Dr. Other GL (41000) : $1710
N/A
NA
Update the pay rate for
each employee (in the
“Pay Rate History” tab in
your workbook. In your
hard copy SUA packet,
the pay rate history is on
the page of Employee
Earnings Sub ledger.
Dr. AR_Rosemount 15490
CR. Sale 15490
Cash 90000
N/P 90000
NA
N/A
NA
10
11
12
13
14
15
71 (not the 115) basketball pole
pads received
-#6 Sales invoice No.732, JA needs
to initial the invoice;
-#5 bill of lading No.6891BR, NF
signs
-#18 Vendor invoice from Velocity
(adjust the differences in
quantities and prices, JA initial the
adjusted vendor invoice)
N/A
-#12 return request (complete the
last 4 columns)
-#17 receiving report No.75
-#13 Credit memo No.42
-#8 endorse the check Doc#8
-# 9 Cash receipt prelist (Look for
the original sales amt in SJ)
1) FC p21 “receipt of cash”:
– #9 Cash receipt prelist
2) FC p18 “Shipping and Billing”
-#5 bill of lading #6892R
-#7 Invoice C-30
3) Flowchat p21 “Deposit”
-#10 deposit ticket, front and back
16
17
SJ
12/21: Rosemount U, cr $3960
Dr. AR GL $3960
Purchases journal:
Dr. Purchase GL $22515
Cr. AP GL $22515
Dr. Purchase 22515
Cr: AP_Velocity 22515
AR_sub ledger:
Stevenson, cr, $2900
SJ:
Dr. Sales returns GL (30200)
$4550
Cr. AR GL $4550
Dr. ADA $2900
CR. AR_Stevenson $2900
AR_sub ledger:
Eastern Wisconxin U, cr.
4550
Dr. Cash 12,000
Cr. AR_ewu $12000
Cash receipts Journal:
dr. $12,000
cr. AR GL $12000
Cash receipts Journal
dr. $5835
cr. Sales G/L $5835
Cash Disbursements Journal:
Cr. $1590
Dr. Other G/L (40200) $1590
FC p23:
-#20 Check#1154, sign, write
“paid” on vendor invoice
AR subsidiary ledger:
(Rosemont) : Dr. 3960
Dr. Cash $5835
Cr. Sales: $5835
NA
NA
Dr. Advertising expense (other G/L 40200)
$1590
Cr. Cash
$1590
Dr. Freight-in G/L 30800 $738.15
Cr. Cash
$738.15
18
19
201
1
FC p23
-#21 ACH payment auth. write
“paid” on vendor invoice
-#17 receiving report No.76, note
No quantity differences between
receiving report and vendor
invoice
FC P21:
#22 RK approves and initial
the time record report
– #20 Checks# 1155-1157
AP sub ledger
Velocity dr. 22515
Payroll Journal:
Fill in the three sections of
earnings, deductions,
payments for each
employee
-Fixed Asset Sub Ledger:
Establish a new one for
standing workstations
Dr $1256.10
-AP sub ledger
AP_Chicago Office
Supply : cr. $1256.10
Employee sub ledger, one
for each person
Dr. AP_Velocity 22515
Cr. Pur. Disc. 450.30
Cr. Cash 22064.70
Dr. Fixed assets (10800) $1256.10
Cr. AP_Chicago Office: $1256.10
Dr. wages and salaries expense 7666.83
Cr. FICA 586.51
Cr. Fed income taxes w/h 604
Cr. State income taxes w/h 346.67
Cr. Cash (net pay)
6129.65
Need to use the information in p.8 of Instr. & FC book to get the SS tax rate of 6.2% and medicare 1.45%. Total of SS tax + Medicare is FICA.
SUA Workbook – Student Instructions
Opening the workbook
The workbook contains macros. You must allow macros to operate to use the workbook. When you
open the workbook, if you are asked if you want to enable macros select yes.
Unlock excel workbook
If your workbook is showing locked, try the following:
–
Download the workbook and save to your local folder
Right click the file
Click “properties
–
Check “unlock” in security
F your excel looks different than mine, please try to find security or google it.
Opening the workbook for the first time
When you open the workbook for the first time enter your name at the top of the title page.
How to use this workbook
You use this workbook in place of the SUA journals, Ledgers, and selected documents (Refer to the title
page for a cross reference of forms and documents replaced by this workbook). To use this workbook,
follow all instructions and requirements in the instruction booklet except:
1
Substitute forms in this workbook for forms referenced in the instructions if they are
listed on the title page.
2
Financial statement templates have been prepared for you. Just fill in the numbers
Title Page
You can jump to any schedule in the workbook from the title page. To Jump to a schedule, click on the
link to that schedule in the table of contents. To return to the title page from any schedule press the
shortcut key [Ctrl][h] for Windows users, [Shift][Command][h] for MAC users.
Entering data into the schedules
The worksheets are protected. You can only enter data into the yellow cells on each schedule.
Collapsing and expanding ledgers
The ledgers have been grouped by Account or Name. To expand the Account or Name click on the + in
the left margin. To collapse an account, click on the – in the left margin. If you want to expand all
accounts, click on the [2] at the top of the left margin. To collapse all, click on the [1] at the top of the
left margin.
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Formatting
Title Page
Citation
Outline
