ACCOUNTING PROCEDURES AND SYSTEMS FOR DAY TO DAY OPERATIONS In AB Bank it maintain it’s accounting system preparing double ticket which we are known as double entry system. DOUBLE TICKET SYSTEMS For every transaction except cash transactions two tickets should be prepared- one debit and aother credit. In case of cash transactions that is deposits or withdrawals or payments the deposit slips, withdrawal slips or cheques or other documents and instruments themselves constitute tickets for one side of the cash transactions and hence one ticket should be prepared by cash department where necessary to complete other side of the transactions. The double tickets may be for1) Transfer entries 2) Clearing entries 1)Transfer entriesTickets should be prerapared for all the transfer entries originating in each department. For example, the loans department will pass transfer entries for interest charged on various accounts every month. Similarly department will pass entries for interest accrued on various deposits. 2) Clearing entries:Outward clearing: a)Branches entries: i) Debit Credit ii) Debit Credit
-Client A/C -ABBL Gen A/C -ABBL Gen A/C -Client A/C
: on receipt of instrument : on return of instuments unpaid
b) Branch/Office maintaining Account with Bangladesh Bank/Sonali Bank i) Debit Credit ii) Debit Credit
-ABBL Gen A/C -Banker’s A/C -Banker’s A/C -ABBL Gen A/C
: on return of instuments unpaid
Blook proofing where necessery:Blook proofing is required for those branches where posting function is not computerised. The blook proofing sheets should have three columns that is separately for cash, clearing and transfer. Procedure of blook proofing:a) Review of entries: Ensure following appears on tickets -Date -Initial of preparer, and -Signatures of two authorised persons. Scan tickets for date in all other applicable fields. For deposit tickets, be sure they are validated by teller. Ensure that each transaction balances i.e. debit equels credit.
For all transactions in foreign currency ensure that either properly executed contract is prepared for each transaction or a summary sheet summaring several transactions is prepared and appears with corresponding transactions. If date appears incorrect on any entry return transactions to originating department. File contracts and summary sheets. Sorting of tickets and procedure of block prooing Tickets to be sorted into Major Accounts and within the major accountsdebits and credits. Block proofing, although can be done in one operating, it is advised that, for improving the proofing process by making error detection easier and for better workflow, the block Proofing should be done batch-wise. Following procedures are suggested: For each major account machine add debits and credits Add asset and liabilities debits and credit total which must be equal Post individual amounts in respective boxes designated for batches on Block Proofing Sheet After last batch is posted, add up all in major account box of Block Proofing Sheet Total up assets and liabilities heads in Block Proofing Sheet and both sides should be equal The Block Proffing Sheet must prove daily. If debts and crtedits cannot balance after exhausting all efforts, pass the apropriate adjustment entry. Maintenance of General and Auxilary Ledger
The accounting department shall be responsible for maintenance of General and Auxillary ledgers in the branches where these are not mechanised (computer of NCR). The standard chart of accounts should be strictly followed and new account heads should be opened only when directed by circular from head office. Posting into General Ledger The General Ledger Heads of Accounts should be as specified in the standard chart of Accounts. The posting into General Ledger should be made from block prooing sheet immediatelu after the same is proved. The General Ledger Accounts should be balanced dialy and be signed by authorised officer. A daily trial balance should be prepared to prove the General Ledger Accounts. It the case of branches where mechanisation( computer/NCR) of posting work has been done the selective status report should be in line with the prescribed heads of general ledger. This is most essential for bringing uniformity in the system and for facilitating consolidation at central accouns level at H.O. Posting into Auxiliary Ledger:In the case of mechanised branches the postings should be made through computer/NCR bach-wise by each department.In the case of manual system, the postings into Auxiliary Ledgers should be made by the Accounts Department on the same day of blook proofing. The heads of accounts to be operated should be strictly as per Standard Chart of Accounts for both non-mechanised branches. New heads can be operated only when so directed by H.O. the auxiliary ledger accounts should be balanced daily and be reconciled with relative control account balances in General Ledger atleast once in a week. Monthly condensed statement of condition should be supported by statement of auxiliary ledger accounts balances.
Procurement and distribution:The detailed procedure of working f the department are laid down in operation manual which should be referred to wherever necessary. However the department being responsible for overall supervision of petty cash items,
office supplies and procurement and distribution, proper records in respect of these items shall be maintained. These are outlined below.
Office suplies:Stock cards should be maintained for all items and posting to the Stock Card must be made immediately on reciept or issue. Every year there should be complete physical veriation of office supplies in hand and book balances should be reconciled. Accounting entries a. On receipt of supplies Debit – Stock of Supplies and Stationary Credit – Accrued Expenses payable b. On payment to supplies Debit - Accrued Expenses payable Credit – Pay Order c. Issue to branches: (in case of Central Supplies and Stationery Department) Debit – Braches (through ABBL General Account) Credit – Stock of Supplies and Stationery Branches Entries, Debit – Stock of Supplies and Stationery Credit – ABBL General A/C d. Monthly Consumption Debit – Supplies and Stationery Expenses Credit – Stock of Supplies and Stationery (on the basis of monthly consumption sheet) General services
The department should maintain a register for general services obtained from outside by contractual arrangement ofr otherwise. Following particulars should be maintained in the register:
Date of order of general service/maintenance Description of General Service Name of the contractor etc. Amount of bill submitted Date when paid Payment reference Remarks
Accounting entries On receipt of bills: Debit – Relevent Expense Heads (Repairs/Maintenance and so on) Credit – Accrued Expense Payable (Service and Maintaince) On payment: Debit- Accrued expence payable Credit- Pay order/Current/Savings Account In case of deferred revenue expenditure : Debit- Prepaid Expense (Branch Pre-opening Exp. Etc) Credit- Accrued Expense Payable (Services and Maintainance)
Prepaid expenses(insurance, advertisement) Entries On payment: Debit – Prepaid Insurance/ Advertisement Credit- Pay order/ Current / Savings Account/ ABBL General Account
Fixed assets Separate register/ cards of Fixed Assets showing the follwing particulars should be maintained: Depreciation Location Cost Rate of depreciation Depreciation written off (yearly) Written down balance
Accounting Entry On acquisition of fixed assets: Debit – Relevant Head of fixed assets Credit – Pay order / current / savings Account/ ABBL General Account On depreciation change: Debit – Depreciation on relevant fixed assets Credit – Accumulated Depreciation On disposal of fixed assets(if any): Debit – Cash / Transfer/ Clearing(as the case may be) Debit – Accumulated Depreciation Debit – Non-operative Expense(Loss on disposal of fixed Assets) Credit – Fixed Assets Credit – Non-operating Income (Profit on disposal of Fixed Assets) On inter-branch transfer: On issueDebit – Branch (through ABBL General Account) Debit – Accomulated Depreciation Credit – Relevant Fixed Assets On receipt Debit – Relevant Fixed Assets Credit – Branch (through ABBL General Account) Credit – Accumulated Depreciation