[Advacs-discuss] Advacs accounting system

[Oliver Elphick]

On Mon, 2004-08-09 at 12:53, bob parker wrote:
> A couple of points about the Glossary of accounting terms.
> (This is an Australian POV)
>=20
> Accounts PayableUS terminology for the Purchase Ledger (q.v.)

Are you saying it is also standard Australian terminology?  (I suppose
the influence of American accounting packages could have made it so
here, but I'm old-fashioned and I qualified in 1979!)

> Accounts Payable is what you owe aka Creditors, Purchases is what you bou=
ght.
> So debit Purchases, credits Accts Payable (if you bought on credit),=20
> or debit Purchases, credit [Bank | Petty Cash] if you paid cash.
> Moreover Accts Payable is normally confined to money owed by way of norma=
l=20
> trade.
>=20
> Accounts ReceivableUS terminology for the Sales Ledger (q.v.)
> Similarly Sales is what you sold by way of trade - credit entry,
> Accounts Receivable aka Trade Debtors is what is owed to you by customers=
, a=20
> debit entry.

OK, I'll have a look at expanding on those.

> You mention control accounts and subsidiary ledgers. In my experience in=20
> medium sized businesses ( $1 to $4 million/week), those things died out w=
ith=20
> the discarded tabulator machines when the General Ledger went computerise=
d.
> All detail was fully recorded within the general ledger. (A possible=20
> exception to this was Payroll). I'm not an accountant so I can not say if=
=20
> there is some standard enforcing that practice but it certainly was usual=
.

My object is to make this system usable even for small traders, whose
turnover might be less than =A350000 per annum.  I remember when I was
training as an accountant that the trainees with the big accounting
firms found bookkeeping much more difficult, because they spent most of
their time ticking off entries on computer-printed audit reports.  Those
of us with small firms spent most of our time doing small traders'
accounts from incomplete records and so we got a much more hands-on
experience of bookkeeping.  (I only just scraped through the auditing
exam though.)

So while the concept may have fallen out of use in many accounting
systems, I feel it is useful to retain an understanding of it and it is
a useful shorthand for a required entry in the trial balance covering
the associated subsidiary ledger.  The alternative to summarising a
subsidiary ledger on such a report is to print out every account, which
effectively makes the report unusable because of its bulk.  Using the
concept of subsidiary ledgers also helps to explain how other modules
relate to the General Ledger module.

--=20
Oliver Elphick                                          olly@lfix.co.uk
Isle of Wight                              http://www.lfix.co.uk/oliver
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