Double Entry System Analysis and Design

Business Process of

Double Entry System, Analysis
and Design

Prepared By Mohsin Yaseen (System Analyst)

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@2012

Double Entry System, Analysis and Design

Contents
Chapter 1: ............................................................................................................................................... 6
Introduction ........................................................................................................................................ 6
Chapter 2: ............................................................................................................................................... 7
Double Entry System ........................................................................................................................... 7
For Example ..................................................................................................................................... 7
Prerequisite of a Transaction (Voucher) ........................................................................................... 8
Chapter 3: ............................................................................................................................................. 12
Accounting Reports and Financial Statements ................................................................................... 12
Accounting Reports ....................................................................................................................... 12
Financial Reports ........................................................................................................................... 12
Chapter 4: ............................................................................................................................................. 13
Data Flow Diagram ............................................................................................................................ 13
Notations....................................................................................................................................... 13
Double Accounting Operation ........................................................................................................ 14
Bank Reconciliation........................................................................................................................ 15
Reporting....................................................................................................................................... 16
Closing and Opening Entries .......................................................................................................... 17
Users ............................................................................................................................................. 17
Data Stores .................................................................................................................................... 18
Documents .................................................................................................................................... 18
Processes....................................................................................................................................... 18
Chapter 5: ............................................................................................................................................. 35
Entity Relationship Diagram............................................................................................................... 35
Chapter 6: ............................................................................................................................................. 37
Table, Data Structure, Security .......................................................................................................... 37
Access Controls Keywords.............................................................................................................. 37
Security Groups ............................................................................................................................. 37
Tables ............................................................................................................................................ 37
Tables and Access Control Summary .............................................................................................. 38
Security Roles ................................................................................................................................ 39
Data Structures .............................................................................................................................. 39

2


Chapter 8: ............................................................................................................................................. 55
Forms, Menus and Workflows ........................................................................................................... 55
Main Forms ................................................................................................................................... 55
Form Control Legends .................................................................................................................... 56
Forms ............................................................................................................................................ 56
Menus and its Hierarchy ................................................................................................................ 66
Chapter 9: ............................................................................................................................................. 68
Architecture Design ........................................................................................................................... 68

3


Figures:
Figure 1: Transaction Cycle ..................................................................................................................................... 8
Figure 2: Voucher Approval Workflow ................................................................................................................... 10
Figure 3: DFD Double Accounting Operation ......................................................................................................... 14
Figure 4: DFD Bank Reconciliation ......................................................................................................................... 15
Figure 5: DFD Reporting........................................................................................................................................ 16
Figure 6: DFD Closing and Opening Entries ............................................................................................................ 17
Figure 7: Forms: Main Window ............................................................................................................................. 55
Figure 8: Forms Control Legend............................................................................................................................. 56
Figure 9: Forms res_currency ................................................................................................................................ 57
Figure 10: Forms: res_company ............................................................................................................................ 57
Figure 11: Forms account_account_type ............................................................................................................... 58
Figure 12: Forms account_account ....................................................................................................................... 58
Figure 13: Forms res_country, res_country_state, res_partner_address ................................................................ 59
Figure 14: Forms res_users ................................................................................................................................... 59
Figure 15: Forms res_partner_category, res_partner_title ..................................................................................... 60
Figure 16: Forms res_partner ................................................................................................................................ 60
Figure 17: Forms res_groups ................................................................................................................................. 61
Figure 18: Forms ir_ui_menu, ir_rule..................................................................................................................... 61
Figure 19: Forms ir_model_access , ir_rule, ir_sequence_type ............................................................................... 62
Figure 20: Forms ir_sequence, account_journal_column, account_journal_view .................................................... 62
Figure 21: Forms account_fiscalyear, account_period ........................................................................................... 63
Figure 22: Forms account_journal ......................................................................................................................... 63
Figure 23: Forms account_bank_statement .......................................................................................................... 64
Figure 24: Forms account_bank_statement_line ................................................................................................... 64
Figure 25: Forms account_move ........................................................................................................................... 65
Figure 26: Forms account_move_line .................................................................................................................... 65
Figure 27: Architecture Design .............................................................................................................................. 68

4


Tables
Table 1: Voucher Format _______________________________________________________________________7
Table 2: General Journal Format _________________________________________________________________8
Table 3: Ledger Format_________________________________________________________________________8
Table 4: Financial Year 2012-2013 ________________________________________________________________ 9
Table 5: Chart of Accounts With Types _____________________________________________________________ 9
Table 6: Complate Voucher Format ______________________________________________________________ 10
Table 7: DFD Legends _________________________________________________________________________13
Table 8: DFD Processes ________________________________________________________________________34
Table 9: DB Tables, Security Groups and Rights _____________________________________________________38
Table 10: DB Table res_currency_________________________________________________________________39
Table 11: DB Table res_currency_rate ____________________________________________________________ 39
Table 12: DB Table res_company ________________________________________________________________ 40
Table 13: DB Table account_account_type_________________________________________________________ 41
Table 14: DB Table account_account _____________________________________________________________ 42
Table 15: DB Table res_country _________________________________________________________________42
Table 16: DB Table res_country_state ____________________________________________________________ 42
Table 17: DB Table res_partner_address __________________________________________________________ 43
Table 18: DB Table res_users ___________________________________________________________________44
Table 19: DB Table res_partner_category _________________________________________________________ 44
Table 20: DB Table res_partner_titles ____________________________________________________________ 44
Table 21: DB Table res_partner _________________________________________________________________46
Table 22: DB Table res_groups __________________________________________________________________46
Table 23: DB Table ir_ui_menu __________________________________________________________________47
Table 24: DB Table ir_model_access______________________________________________________________ 47
Table 25: DB Table ir_rule______________________________________________________________________47
Table 26: DB Table ir_sequence_type _____________________________________________________________ 47
Table 27: DB Table ir_sequence _________________________________________________________________48
Table 28: DB Table account_journal_column _______________________________________________________ 48
Table 29: DB Table account_journal_view _________________________________________________________ 49
Table 30: DB Table account_fiscalyear ____________________________________________________________ 49
Table 31: DB Table account_period ______________________________________________________________ 50
Table 32: DB Table account_journal ______________________________________________________________ 51
Table 33: DB Table account_bank_statement ______________________________________________________ 52
Table 34: DB Table account_bank_statement_line __________________________________________________52
Table 35: DB Table account_move _______________________________________________________________ 53
Table 36: DB Table account_move_line ___________________________________________________________ 54
Table 37: Hierarchical Menus and Tables __________________________________________________________ 67

5


Chapter 1:

Introduction
The main focus of this document is to explain

1. How double entry system works,
2. Manual workflow,
3. Reports required,
including its analysis and engineering
4. Data Flow Diagram,
5. ER Diagram,
6. Tables and Data Structures,
7. Menus, Forms Designing (List and Edit View) and Workflows
8. Architecture Design.

I have bifurcated these topics as per chapter for this document. I will spend more time to explain
last 5 topics. In First chapter I will explain some basic concept of manual double entry system, in 2 nd
its workflow with diagrams and in 3rd some important reports.

6


Chapter 2:

Double Entry System
Double Entry System represents an business accounting in which, every transaction related to any
financial year (periods) is recorded in books of accounts in such way that balance of both sides should be
equal.

Keywords:

Transaction: Any operation that effects (increases or decrease) the business accounts value like capital,
liability, expense, assets and revenue.

Financial Year: Every organization shows financial value of its organization in a year. Every year splits in
months (3 or6) wise periods.

Books of Accounts: Books are type of accounting registers where transactions are recorded.

Balance: Value of any business account.

For Example
An Owner starts a trading business, and he invests Rs. 500,000 in his business on 18-Sep-2012. How this
business transaction will be recorded in books of accounts?

First he writes his business transaction in a summarize form as a proof called voucher. Example

Company Name
Voucher
No 1
Date 18-Sep-2012
Financial Year Financial Year 2012-2013
Financial Period 12-13- IST Period
Currency PKR

Accounts Dr Cr
Assets - Bank 500000
Transaction
Capital – Owners Equity 500000
Balance Total 500000 500000
Narration Investment from Owner
Table 1: Voucher Format

In second step, transaction from voucher will be recorded in books of accounts, this book known is as
General Journal. Example

General Journal
Date Accounts Dr Cr

7


18-Sep-2012 Assets - Bank 500000
18-Sep-2012 Capital – Owners Equity 500000
Table 2: General Journal Format

In third step using this general journal, entries are classified according to accounts and are recorded in
other book called ledger and the process is known as posting. Example

Assets Bank- Ledger
Date Dr Balance Date Cr Balance
18-Sep-2012 500000 500000

Capital Owners Equity – Ledger
Date Dr Balance Date Cr Balance
18-Sep-2012 500000 500000

Table 3: Ledger Format

Above given example elaborate the basic double entry system from preparation of vouchers to posting.

Transaction Voucher Posting General Posting Accounts Transaction
Starts Preparation Journal Ledgers Ends

Figure 1: Transaction Cycle

Prerequisite of a Transaction (Voucher)
Some prerequisite of a voucher are

1. Company’s Currency
2. Company financial years and periods
3. Business Accounts List (Chart of Account)
4. Company’s Books of Accounts
5. Voucher Approval Process

1. Company Currency
Every company uses a currency as its basic unit of account and other currencies are used too in business
process. In all vouchers this basic currency will be used till transactions in other currencies are not
mentioned.

2. Company financial years and periods
Every Company define its start and end dates of financial year and its sub financial periods before
preparing vouchers, like

Financial Year
2012-2013

8


Start Date 1st July 2012 End date 30 June 2013

Period Start Date End date Duration
IST 12-13 1st Jul 2012 30 Sep 2012 3 Months
2ND 12-13 1st Oct2012 31 Dec 2012 3 Months
3RD 12-13 1st Jan 2012 31 Mar 2012 3 Months
4TH 12-13 1st Apr 2012 30 Jun 2012 3 Months
Table 4: Financial Year 2012-2013

3. Business Accounts List (Chart of Account)
Organizations define different accounts under following major type

C: Capital
L: Liability
E: Expense
A: Asset
R: Revenue

Some companies define these accounts in hierarchal nature like parent and child account, some other
related terms used for these accounts are main and sub accounts. This classification of account with
unique number is known as chart of accounts. Below is the example of a small chart of account of
company ABC

Account Code Account Name Account Type
001 Assets Asset
002 Building Asset
003 Furniture Asset
004 Liability Liability
005 Account Payable Liability
006 Expenses Expense
007 Purchases Expense
008 Electricity Expenses Expense
009 Income Revenue
010 Sales Revenue
011 Other Income Revenue
Table 5: Chart of Accounts With Types

4. Company’s Books of Accounts
As explained earlier main book of account is General Journal. After recording voucher General
Journal posting in ledgers is done. Different Organizations use different ledger like:

Cash Ledger
Bank Ledger
Expense Ledger
and others

9


5. Voucher approval process
The process varies according to organization’s hierarchy staff and its approval policy. Generally accounts
officer prepares the voucher and attaches physical proofs if needed. This voucher is then forward to his
senior for approval example

State: Draft State: Approved by Auditor

Auditor/
Posting
Voucher Accounts Officer Manager
Controller
Director Finance Accounts Officer General
Preparation Finnece
Accounts Journal
State: posted

Cancel

State: Approved by Controller Finance State: Approved by Director Finance

Figure 2: Voucher Approval Workflow

In manual accounting system approval signature show the status of voucher. After approval of voucher
from the person in authority as per organization’s and its policy, Account officer is then responsible for
entering and recording vouchers in General Journal with mentioned dates finally are filed vouchers with
proofs.

Company Name
Voucher
No 1
Date 18-Sep-2012
Financial
Financial Year 2012-2013
Year
Currency PKR

Accounts Dr Cr
Business Assets - Bank 500000
Accounts & Capital – Owners Equity 500000
its impact
Balance Total 500000 500000
Narration Investment from Owner

Approved By
Approval Controller Director
Prepared By Auditor
Process Finance Finance
Signature Signature Signature Signature
Table 6: Complate Voucher Format

Any change is required in business account of a posted voucher, the account officer will prepare another
voucher to reset the attributes. This voucher is known as adjustment voucher including adjustment
entries.

10


11


Chapter 3:

Accounting Reports and Financial
Statements

Classifications of reports are

Accounting Reports
Main Ledger Report
Sub Ledger Report
Journal Report
Trail Balance
Payable Balance Reports
Receivable Balance Reports

Financial Reports
Profit and Loss Statement
Balance Sheet
Cash Flow
Changes in Equity Report
Additional Reports

12


Chapter 4:

Data Flow Diagram
General we divide data flow diagram of double accounting system in four sub diagrams;

Double Accounting Operation
Bank Reconciliation
Reporting
Closing and Opening Entries

Notations
Date Store

Flow of Information

Process

Physical Proofs

Files

Users

Report

$

Bank

Cheque Book

Table 7: DFD Legends

13


Double Accounting Operation

2.0
1.0
Attached Proofs
Prepare Voucher
With Voucher

Account Officer
Proofs

Cancel 3.0
Approval

7.0 6.0 Auditor/
File The Record Approved Manager Accounts
Approved Voucher in General
Vouchers Journal
4.0
Approval

Controller Finance

5.0
Approval
General
Journal
Voucher Files
Director Finance

8.0
Posting in Ledgers
Ledger

Figure 3: DFD Double Accounting Operation

14


Bank Reconciliation

Bank
Statements 6.2 $
6.3
Receive Bank
Bank Reconciliation
Statement (Weekly
or Monthly)

Bank

6.2
Bank
Present Cheque
Reconciliation
and Payment
Statement
Account Officer Transfer

6.0
6.4 6.1
Record Approved
Prepare Adjustment Prepare Cheque for
Voucher in General
Voucher Payment
Journal

Supplier

3.0
Approval

General
Auditor/ Journal
Manager Accounts

4.0 Cheque Book
Approval

Controller Finance

5.0
Approval

Director Finance

Figure 4: DFD Bank Reconciliation

15


Reporting

9.0
Main Ledger
Ledger Reporting
and Sub
Reports

10.0
Journal
Reporting Journal Report

11.0
Trail Balance
Reporting Trial Balance

12.0
Payable and
Ledgers Payable and
Receivable
Receivable
Reporting
Reports

Account Officer

13.0
Profit and Loss Profit and
Reporting Loss
Statement

14.0
Balance Sheet
Reporting Balance Sheet

15.0
Cash Flow
Cash Flow
Reporting
Statement

16.0
Changes in
Changes in
Equity Reporting
Equity Repot

Figure 5: DFD Reporting

16



Current New Year
Year Ledgers
Ledgers

17.0
Prepare Voucher: 18.0
For Closing & Record Opening
Opening Balances Balance
of Current Fiscal
Year
Account Officer

3.0
Approval

Auditor/
Manager Accounts

4.0
Approval

Controller Finance

Figure 6: DFD Closing and Opening Entries

Users
Following roles are used in double accounting system;

Account officer
Audit / manager accounts
Controller finance
Director finance

17


Data Stores
Following data stores are used in double accounting system;

General Journal
Ledgers

Documents
Following documents are used in double accounting system;

Vouchers
Physical Proofs
Bank Statements

Processes
Data Store /
Process
ID User/Role Document/ Process Description
Name
Report
1.0 Prepare Account Officer Voucher In chapter 2, formats, attributes and prerequisites of a voucher
Voucher has been explained. Each voucher can be divided into five
categories. To these categories for every organization is not
obligatory. The number of these categories could be increase or
decrease for our own case. These Five forms are;
Bank Payment Voucher (BPV)
If a transaction includes payment from any bank
account of the organization then the voucher is
termed as BPV.
Bank Receipt Voucher (BRV)
Transaction which includes cash receipt in any bank
account of the organization is termed as BRV.
Cash Payment Voucher (CPV)
The transaction which involved payment from any
cash account (also known as Petty Cash Account) of
the organization is called CPV
Cash Receipt Voucher (CRV)
A transaction including receipt in any cash account
(also known as Petty Cash Account) of the
organization is CRV
Journal Voucher (JV)

18


If any transaction does not includes BPV, BRV, CPV or
CRV then we narrate this voucher as JV. Journal
Voucher is the main category, rest are extracted from
JV to make the operation easy.
2.0 Attached Account Officer Voucher and Each voucher includes some physical proofs. For example any
Proofs With Additional organization who wants to pay a supplier. Now what are the
Voucher Proofs reasons of payment? May be supplier provides some services or
sell some goods to organization. May be this will be some sort of
advance (security) of start transaction. Whatever reason is, there
should be some physical proof. In case of payments of electricity
bills we will attach copy of electricity bill. In case of security to
avail the services of supplier then we will attach the agreement
copy and vice versa.
3.0 Approval Auditors/ Voucher and When Account officer successfully prepare the voucher and
Manager Additional attached the proofs successfully then this voucher will send to
Accounts Proofs Organization Auditors/ Manager Accounts for approval. Approval
level will be varying according to policy of organization. Auditor/
Manager Accounts sign the voucher is this is prepared correctly, IF
an mistake exist then Auditor request Account Officer to correct
the mistake or prepare again with mention correction.
4.0 Approval Controller Voucher and Same voucher will be sign by auditor’s manager like controller
Finance Additional finance. Controller Finance also ensures that either this voucher is
Proofs sign by Auditors/ Manager Account or not.
5.0 Approval Director Finance Voucher and In next approval; Director Finance will sign the voucher after
Additional checking of Auditor and Controller finance approval.
Proofs
6.0 Record Account Officer Voucher and As mention previously this approval flow of voucher can be vary
Approved General according to organization policy. According to approval policy if
Voucher in Journal voucher is completely approved by each responsible then voucher
General will be send back to Account Officer. Account officer record its
Journal transaction detail in General Journal. General Journal is first book
Or of account where every voucher details are recorded.
Journalizing Format of General Journal:
Date- VNo Particulars L/F Debit Credit
2012
18-Sep 1 Bank - 500000
To Capital - 500000
[amount brought
toward capital,

19


cheque no 34564]
19-Sep 2 Advance for Office - 25000
To Bank - 25000
[Advance
Payment of office
rent, cheque no
34565]
20- Sep 3 Purchases - 30000
To Bank - 30000
[Purchases from
Ahmad & Co,
cheque no 34566]
21-Sep 4 Acc Receivable - 6000
To Sales - 6000
[Sales to Sajid &
co]
6.1 Prepare Account Officer Cheque Book For each payment to supplier, Account officer prepares cheque.
Cheque for Following are some payments by cheque and some receipts in
Payments bank account ledger report.
Bank Account Ledger Report (from 1-Sep- 12 to 30-Sep-12)
Date Cheque Particulars Debit Credit Balance

Opening Balance 10000 10000
Payable to
3 343 Dawood & Co 2500 7500

5 3463 Bill Discount 11900 19400
Payable To
9 344 1000 18400
Naeem
Receivable from
10 7564 Rizwan & Co 400 18800

Payable to
16 345 Saleem & Co 1500 17300

Receivable from
20 3446 Crown & Co 1800 19100

21 346 Payable to Asif 2000 17100
Receivable from
24 8695 Rafiq & Sons 4000 21100

27 347 Petty Cash 1200 19900
28 4544 Petty Cash 600 20500
Payable to
30 349 5500 15000
Ahmad

20


Receivable from
30 65454 Naseem & Co 3000 18000

Closing Balance 18000
6.2 Receive Bank Account Officer Bank Bank send monthly bank statement to account officer; below is
Statement Statement the sep-12 bank account statement;
(Weekly or Bank Account Title
Monthly) Bank Statement Sep-2012
Date Cheque Particulars Withdrawal Deposit Balance
Opening 10000 10000
Balance
Cross 2500 7500
Cheque:
4 343
Dawood &
Co
Bill 11900 19400
5 3463
Discount
Rizwan & 400 19800
6 7564
Co
Cross 1000 18800
10 344 Cheque:
Naeem
Cross 1500 17300
Cheque:
17 345
Saleem &
Co
Self 1200 16100
26 347 Cheque:
Self
27 4544 Cash 600 16700
B/R 12000 4700
27 4699
Dishonored
Rehman & 1100 5800
28 4678
Sons
Interest on 300 6100
29
NIT Units
Crown & 1800 7900
29 6799
Co
Bank 100 7800
29
Charges
6.3 Bank Account Officer Bank Book Bank statement is a report that shows why bank account ledger
Reconciliation (Bank closing balance is not matching with bank statement. Few of
Account reasons are;
Ledger) and
Bank Cheques issued but not yet presented for payment
Cheques deposited but not yet collected

21


Statement Bank charges not entered in the bank book
Interest credited by bank not entered in the Bank Book
Amount directly deposited into bank be debtors.
Credit transfer
Standing order
Direct Debit

Format of bank reconciliation is;

Bank Reconciliation Statement as on 30-09-2012 Rs.
Bank Balance as per Bank Book (Dr.) --
Those items which increase the bank
Add: statement balance more than bank
book
a. Cheques Issued but not presented
Interest credited by bank not entered in
b. the cash book
Cash directly deposited into the bank
c. but not recorded in bank book
d. etc
Dr Balance --

Deduct: Those items which decrease the bank
statement balance then bank book
Cheques deposited but not credited by
a. the bank
Bank charges not recorded in the bank
b. book

Direct payment by bank as per standing
c. order not recorded in bank book
d. etc
Cr Balance --
Bank Balance as per Bank statement (Cr.) --

By using the bank ledger report refers in process in 6.1 and bank
statement refer in process 6.2, I will prepare a bank statement.
Starting from bank account ledger report comparing each entry
with bank statement, and writing in below bank reconciliation
report;

Bank Reconciliation Statement as on 31-07-2012 Rs.
Bank Balance as per Bank Book (Dr.) 18000
Add:
1 Two cheques have not been Presented

22


Asif 2000
Ahmad 5500
Two Amounts are not recorded in Bank
2 Book
Rehman & Sons 1100
Interest on NIT Units 300
Dr Balance 8900
Deduct:
1 Two cheques have not been Collected
Rafiq & Sons 4000
Naseem & Co 3000
2 Two Amounts are not recorded in Bank
Book
Dishonored Bills Receivable 12000
Bank Charges 100
Cr Balance 19100
Bank Balance as per Bank statement (Cr.) 7800

Bank Balance as per Bank statement (Cr.)= Bank Balance as per
Bank Book (Dr.) + Dr Balance - Cr Balance

6.4 Prepare Account Officer Bank Now those entries from bank statement which are not matched
Adjustment Reconciliation with Bank Account Ledger. These Entries are;
Vouchers Statement Bank Statement Sep-2012
and Voucher Date Cheque Particulars Withdrawal Deposit

12000
B/R
27 4699
Dishonored

Rehman & 1100
28 4678
Sons
300
Interest on
29
NIT Units

Bank
29
Charges 100

Total
12100 1400

First select all the deposit entries and debit the bank account
equal to its deposit sums. Similarly select all the withdrawal

23


entries and credit the bank account equal to its withdrawal sums.
Following is the Journal Voucher;

Company Name
Journal Voucher
No 65
Date 30-Sep-12
Currency PKR

Accounts Dr Cr
Bank Account 1400

Rehman & Sons 1100

Interest on NIT Units 300

Bank Charges 100

B/R Dishonored 12000

Bank Account 12100

Total 13500 13500
Narration Adjustment Entries after
Bank Reconciliation

7.0 File The Account Officer Voucher and After recording the voucher details in general journal then this
Approved Its Files voucher will be filed. Also account officer write the keyword
Vouchers ‘posted’ at the top corner of voucher. The filing of voucher again
varies according to organization policy.
Voucher Categories File Name
Option 1
BPV, BRV, CPV, CRV Vouchers File
and JV
Option 2
BPV and CPV Payment Voucher File
BRV and CRV Receipt Voucher File
JV Journal Voucher File
Option 3

24


BPV Bank Payment
Voucher File
BRV Bank Receipt Voucher
File
CPV Cash Payment
Voucher File
CRV Cash Receipt Voucher
File
JV Journal Voucher File
Option 4
JV Voucher File
8.0 Posting in Account Officer General After recording all the voucher detail in General Journal, Account
Ledger Journal and Officer Post each day entry in respected ledger as mention in
Account Chapter 2 example. This step can be performing side by side in
Ledger whole day or at the end of the evening. It’s depending upon the
daily exercise of Account Officer, but this should be ensure that
each posted voucher should be recorded in respect ledger.
Format of Account book is just like a T. Left side (page) represent
the debit side of ledger and right side (page) represent the credit
side of ledger.
Ledger Title
Debit Side Credit Side

Below I will show u each side of ledger separately because of
limited space available. Let explain this by below example;

Bank- Ledger
Date Detail Dr Balance
Balance B/F 0
18-Sep-2012 Investment from Owner 500000 500000

Date Detail Cr Balance

19-Sep-2012 Paid Advance for Office 25000 25000
20-Sep-2012 Purchases 30000 55000

Balance C/F 445000

Calculation of Balance C/F= Sum of All Debit Entries – Sum of All
Credit Entries
Where to Write Balance C/F (Left Side or Right Side)=

25


If the difference is positive: Write on right side (credit side) by
taking absolute
If the difference is negative: Write on left side (debit side) by
taking absolute.
In above example bank ledger: Balance c/f= 500000-
55000=445000, write on credit side of page.
Now other ledger’s examples;

Capital Owners Equity – Ledger

Balance C/F 500000
Balance B/F 0
18-Sep-2012 Investment from Owner 500000 500000

Advance of Office Rent– Ledger
Balance B/F 0
19-Sep-2012 Paid Advance for Office 25000 25000


Balance C/F 25000

Purchases – Ledger
Balance B/F 0
20-Sep-2012 Purchases 30000 30000


Balance C/F 30000

26


Sales – Ledger

Balance C/F 6000

Balance B/F 0
21-Sep-2012 Sales 6000 6000

Acc Receivable– Ledger
Balance B/F 0
21-Sep-2012 Sales to Sajjid & co 6000 6000


Balance C/F 6000

9.0 Ledger Account Officer Account Ledger reports show all the detail (debit and credit) available in
Reporting Ledgers account ledger book. This can be prepared of single account as
well as multiple accounts. This report can show the detail of
All financial years,
Single Financial year
Multiple Period or Single Period
Or any single date or multiple date
Following is the bank account ledger report;
Bank Account Ledger Report (from 18-Sep12 to 21-Sep-12)
Date- Particulars JF Debit Credit Balance
2012
Opening 0
Balance
18-Sep Investment 500000 500000
from owner
19-Sep Paid Advance 25000 475000
Rent for Office
20-Sep Purchases 30000 445000

27


Closing Balance 445000
10.0 Journal Account Officer General Journal report shows all the detail (debit and credit) each account
Reporting Journal and wise available in General Journal book. This report can show the
Account detail of
Ledgers All financial years,
Following is the General Journal Reporting;

General Journal Report (from 18-Sep12 to 21-Sep-12)
Date- Particulars Debit Credit Balance
2012
Bank Account 506000 55000 445000
18-Sep Investment from 500000
owner
19-Sep Paid Advance Rent for 25000
Office
20-Sep Purchases 30000

Capital Account 0 500000 500000
18-Sep Investment from 500000
Owner

Advance of Office 25000 0 25000
19-Sep Paid Advance of 25000
Office

Purchases 30000 0 30000
20-Sep Purchases from 30000
Ahmad & co

Sales 0 6000 6000
21-Sep Sales to Sajjid & co 6000

Account Receivable 6000 0 6000
21-Sep Receivable from Sajjid 6000 0
& co
11.0 Trial Balance Account Officer Ledger and This report shows the list balances of company chart of account. In

28


Reporting Ledger this report, for each account we write the debit or credit balance
Reports from ledgers report. The difference of sum of all debit amount and
sum of all credit amounts should be zero. This report can show the
detail of
All financial years,

Following is the General Journal Reporting;
Trail Balance (from 18-Sep12 to 21-Sep-12)
Acc Code Account Debit Credit
001 Bank Account 445000 0
002 Capital 500000
003 Advance of Office 25000
004 Purchases 30000
005 Sales 6000
006 Acc Receivable 6000
Total 506000 506000

12.0 Payable and Account Officer Ledger and This report shows the balance of companies vendors (Suppliers
Receivable Ledger and Customers). Format of this report varies according to
Reporting Reports organization policy;
One of the standard format is;
Vender Address
City-State-Country
Phone no
Document: Customer account statement
Date: Date
Customer Ref: Customer Unique Number
Dear Sir/Madam,
Exception made of a mistake of our side, it seems that the
following bills stay unpaid. Please, take appropriate measures in
order to carry out this payment in the next 8 days.
Would your payment have been carried out after this statement
was sent, please consider the present one as void. Do not
hesitate to contact our accounting department at Phone No or
email.

29


Best regards.
Maturity Due Paid Balance
Date
Date Due Amount Partial Paid Due Amount -
Amount Partial Paid
Amount
Total Amount Due: (Sum of Balance) Currency Symbol.

13.0 Profit and Account Officer Trial Balance
Loss
Reporting
14.0 Balance Sheet Account Officer Trial Balance
Reporting
15.0 Cash Flow Account Officer Trial Balance
Reporting
16.0 Changes in Account Officer Trial Balance
Equity Report
17.0 Prepare Account Officer, Ledgers, Trial These steps are performed at the end of each financial year by
Voucher Auditor/Manager Balance, account officer. Steps are;
for Closing & Accounts, Voucher Calculate General Funds
Opening Controller Closing Current Year Balances
Balances of Finance
Current Fiscal Calculate General Fund:
Year In balance sheet liability portion; there is special account known as
General fund. This account have multiple name in different
organization; some people narrate as profit & loss account ,
income & expense account or general fund.
At the end of the financial year we calculate the actual profit or
loss of company for current year; by subtracting all type of
expenses from all income.
General Fund = Income (Direct Income + In Direct Income) -
Expenses (Direct Expenses + In Direct Expense)
For example; using the trail balance report of process
Trail Balance (2012-1013)
Acc Type Account Debit Credit
Asset Bank Account 445000 0
Liability Capital 500000
Asset Advance of Office 25000

30


Expenses Purchases 30000
Income Sales 6000
Asset Acc Receivable 6000
Total 506000 506000

Sum of Income = 6000
Sum of Expenses =30000
Income or loss = Sum of Income - Sum of Expenses
Income or loss = 6000 – 30000 = > -24000
The Negative sign represent the loss and positive sign represent
the profit. This profit or loss will be added to General Fund
account by finishing income and expenses impacts like below;
Company Name
Journal Voucher
No 66
Date 30-Jun-13
Financial Period 12-13- 4TH Period
Currency PKR

Accounts Dr Cr
Sales 30000

Purchases 6000

General Fund 30000

General Fund 6000
Total 36000 36000
Narration Calculating General Fund

Now Same Trial Balance look like below;
Liability Capital 0 500000
Asset Advance of Office 25000 0
Expenses Purchases 0 0

31


Income Sales 0 0
Asset Acc Receivable 6000 0
Liability General Fund 24000 0
MGT Balance Transfer 0 0
Account Account
Total 500000 500000

Closing Current Year Balances:
The 2nd step is closing the balances of current fiscal year. For this
purpose I will used a account named ‘Balance Transfer Account’.
This Account is neither used in Balance Sheet nor Profit and Loss
Statement.
Below is the for closing current year balances voucher;
Company Name
Journal Voucher
No 68
Date 30-Jun-13

Financial Period 12-13- 4TH Period

Currency PKR

Accounts Dr Cr
Bank Account 445000
0
Capital 500000 0
Advance of Office 25000

Acc Receivable 6000

General Fund 24000

Balance Transfer 500000
Account

Balance Transfer 55000
Account

32


Total 555000 555000
Narration Closing current year
balances

By Entering this voucher, the balances of all the account set to
zero in fiscal year 2012-1013.

18.0 Record Account Officer Voucher, In this, account officer introduce new ledgers books for new fiscal
Opening Ledgers year i.e. 2013-2014 and create first voucher. In this voucher
Balance account he introduce the opening entries for each account from
last year closing balances;
Balance Transfer Account is also again used in this voucher;

Company Name
Journal Voucher
No 1
Date 01-Jul-13


Currency PKR

Accounts Dr Cr
Bank Account 0
445000
Capital 0 500000
Advance of Office 0
25000
Acc Receivable 6000 0

General Fund 24000 0

Balance Transfer 500000 0
Account

Balance Transfer 0 55000
Account

33


Total 555000 555000
Narration Opening new year
balances

Trial balances of new fiscal year 2013-2014;
Liability Capital 0 500000
Asset Advance of Office 25000 0
Expenses Purchases 0 0
Income Sales 0 0
Asset Acc Receivable 6000 0
Liability General Fund 24000 0
MGT Balance Transfer 0 0
Account Account
Total 500000 500000
Table 8: DFD Processes

34


Chapter 5:

Entity Relationship Diagram
After explaining the data flow diagram, I will spend some time to explain the ERD for double accounting
system.
Below is the ERD for double accounting system.

35


36


Chapter 6:

Table, Data Structure, Security
Access Controls Keywords
R: Read
W: Write
C: Create
D: Delete

Security Groups
Accountant
Auditor
Controller
Director
Admin

Tables
res_currency
res_currency_rate
res_company
account_account_type
account_account
res_partner_address
res_users
res_country_state
res_country
res_partner_category
res_partner_title
res_partner
res_groups
ir_ui_menu
ir_model
ir_model_access
ir_rule
ir_sequence_type
ir_sequence
account_journal_column
account_journal_view
account_fiscalyear
account_period

37

Double Entry System Analysis and Design

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