The work year-end

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July 2009 END OF YEAR WORK Accounting Report All work relating to year-end accounting Algeria, investments, stocks, debenture s and provisions ... etc.. Abdelghafour GRAZEM CRCECC July THE END OF YEAR WORK THE END OF YEAR WORK INTRODUCTION Chapter I: Objectives and presentations of work at year end I. II. I. II. III. I. II. III. IV. I. II. I. II. III. IV. V. I. II. I. II. Objec tives of inventory work Presentation of the work of exercise Inventory investmen t Depreciation Adjustment of preliminary expenses of 38 "Chain" Regularization R egularization sales value of inventories The inventory system Adjustment of clai ms Other adjustments Definition of Need Role provisioning provisions modality pr actical readjustment allowance for depreciation charges Regularisation Regularis ation of income Definition establishments reconciliation statement Chapter II: Investment Chapter III: Inventory Adjustment Chapter IV: Claims Chapter V: Provisions Chapter VI: Regulation of costs and revenues Chapter VII: The reconciliation statement Case study Conclusion THE END OF YEAR WORK INTRODUCTION: The ordinary work of accounting is to record the transactions of the company dur ing the year based on the accounting records and extra accountants. Although acc ountants spend enormous efforts to organize and adjust their work, they are forc ed to work year-end, they are still required operations this year not booked, an d operations which did not for the current fiscal year charged during the year, adding the errors of calculation. The year-end work on all classes of the nation al accounting plan, representing all accounting and non accounting work in light of the results and determine the company's balance sheet. The work year-end is a very important phase in the activity of the accounting function. These are tho se recorded to establish a balance which will include accurate information. Orga nization of work at year end. The work year-end will be 31/12 of each year a fai th that all the usual operations of the year are recorded. The execution of the task is summarized as follows: a) Establish an interim balance 31/12 (containing all the usual operations). b) Skip all inventory records. Depreciation. Pro vision. Adjustment of accounts needed. State of approximation. ... etc.. c ) Establish an inventory balance. d) Group accounts under classes (6 and 7) in t

he main accounts. THE END OF YEAR WORK e) Determine the results by stage (gross margin, value added, operating profit, non-operating income, income for the year ... etc..) f) Provide a balance after inventory. g) Prepare the balance sheet and income accounts table. Scriptures usual Balance before inventory Writing Year-End Balance + TCR 1.2 / .. 31/12 / .. 31-12 Work From Exercise THE END OF YEAR WORK CHAPTER I: Objectives and presentation of work at year end: 1) Objectives of inventory work. All companies are required to make the annual inventory of assets and liabilitie s in their heritage. This inventory is a count by writing and by item of the pro perty, assets and debts in particular to give a true, faithful and true accounts for the year ending. In accounting terms, the inventory results in a series of important works of skilled accounting and inventory for the purpose of balance s heet and the corresponding determination of the outcome of the exercise, which a s we know it can be calculated in two ways: Using the balance sheet accounts: comparison of assets and liabilities. From the accounts: charges versus produc ts. The importance of year-end work is obvious, because a balance sheet filed en gages the responsibility of managers of the company vis-à-vis the state and othe rs. As a result, managers must make their full attention to the work done proper ly reflect honestly and faithfully the reality experienced by the company during the financial year and the situation at the time of closing.€The work thus prod uced should allow managers to evaluate the results and conduct analysis and diag nosis to determine the decisions to be taken to improve the situation of the com pany. 2) Presentation of year-end. Before studying in detail the various works accounting and non accounting year e nd, we will give a general account of the inventory work that can be classified as follows: A. Extra accounting work: The extra equipment or inventory accounting is a general gluing all assets and l iabilities of the company. A) Phase "Investment": It identifies in full the fixe d assets owned by the company and the movements that affected. THE END OF YEAR WORK At the end of each fiscal year, instructions were issued to define the modalitie s for achieving the operation of physical inventory, reconciling with the accoun ts of the corresponding class 2, the regularization of the potential differences and the award entries on Depreciation and resorption of preliminary expenses. 2

) Phase "stocks" In business as in the commercial company s industrial value of stocks represents a very high rate of total positions in the balance sheet. Give n the importance and diversity of materials, supplies and materials stored, the existing system of organization, level of qualifications of staff who are affect ed, this phase is the most difficult step in the process of closing. From the ab ove, instructions are clear, precise and explicit should be issued to define the various stages of physical inventory, valuation, reconciliation, treatment diff erences and accounting adjustments. 3) Phase "personnel" In collaboration with t he management staff, financial and accounting services required to prepare detai led analysis and explanation for the clearance of accounts relating to loans, ad vances, balances of any account, Withholding, social security contributions, etc .... 4) Phase "commercial" The responsibility of the business involves a thorou gh knowledge of customers, business transacted, the level of play, etc .... Beca use the contact with customers is provided by the marketing function, the inform ation available from commercial services are vital for proper control of account s receivables from customers. This will help determine the financial receivables which are difficult to recover for: Make a census justified by bad debts and claims at issue. THE END OF YEAR WORK Estimate the necessary provisions to establish the amount of claims and lost f orever. 5) Phase "supplies": The service manager of supply must provide financia l and accounting services: The final invoices for the year N. The list of or ders delivered during the year N and not yet billed for their finding to the acc ount receivable invoices. An analysis explaining the situation of some supplie rs to justify the adjustment of deviations. 6) Phase "Cash Flow": This phase inv olves defining the modalities for implementation of the inventory of cash on han d, the establishment of bank reconciliation statements to allow adjustment for a ny omissions or errors and clearing operations instance and the reclassification of outstanding balances in the appropriate accounts. 7) Phase "other operations ": The arrangements for carrying out the work of reconciliation of the inter-u nit connections. The arrangements for the clearance of suspense accounts and a ccruals of assets and liabilities. B. Works Accountants: The inventory accounting is to achieve the following work: Establishment of a st ate audit says interim balance scale before inventory. From this interim balance is the starting point of the work inventory accounting, the accounting will pos e a number of questions: The transactions recorded in each account balance tha t they really interested in the current period or is there some place to defer t he following year? The completeness of transactions during the year have they all been recorded in the accounts of the balance? THE END OF YEAR WORK The accounts do they reflect the reality if we had conducted a physical invent ory valued? A) Scripture, recovery and adjustment: Generally, adjusting entries at year-end accounting concern analysis of: Impairment losses suffered by cert ain assets (depreciation and provisions). Resorption preliminary expenses spra wl time expenses charged to the account "preliminary expenses". charges outsta nding at the date of the inventory. interest charges and other exercises that have been attached to this year (deferred charges). Products relevant to the e xercise and not yet recorded. Products not relevant and that the exercise must be carried over to subsequent year. 2) Correction of errors: The recovery of re cords containing errors or incorrect amount or credit may be carried out by the methods provided for this purpose, such as: additional zero advocated by the NCP , award full-cons ... etc.. 3) Establishment of the balance after inventory: Aft er the adjustment of balances and stabilize the erroneous charges, the establish ment of the balance after inventory presents no particular difficulty. The total

debits and credits of the balance shall be equal to those of the newspaper, int roduced on that date. 4) Result for the year: It is to consolidate the accounts of income and expenses and settle the accounts of the results until after the de termination of net income. 5) Accounts and documents. 6) Closure of accounts and journals. 7) Reopening of books and cons award accruals. THE END OF YEAR WORK Chapter II: Investment 1) Inventory investment It is to review at the end of the year, during the work sheet footings, all inve stments owned acquired, created by the company and intended to remain permanentl y in the same form for the purposes operation and not be sold or processed. Arti cle 17 of the Decree of the Minister of Finance of June 3, 1975 states: "At the end of each fiscal year, prepare an inventory valued companies, complete and det ailed their investments in which the file should be kept constantly up to date" . The physical inventory valued, which must be done at least once a year, must b e reconciled regularly with inventory accounting (accounts of category 2). It wi ll allow the company to follow in accounting and physical means of production an d make the necessary adjustments regularly. The management of these investments must be structured to allow monitoring of their status at each period, hence the need for their identification and location. This close monitoring should be pro vided at time of entry, exit and at every movement. The physical inventory consi sts of six phases, namely: Preparation of the transaction. Census physics. Recovery. Reconciliation of the physical inventory with accounting records. Treatment gaps. Scriptures readjustm ent of investment accounts concerned. 1) The inventory accounting: is the inventory of equipment made from the investm ent accounting or file. This inventory has the major drawback of providing only what has been found in accounting. If the information system accused of failures in the seizure of the facts of this investment is inevitably reflected in the i nvestment accounting. THE END OF YEAR WORK So, for the inventory drawn from the accounts reflects reality, we need the info rmation system is fully functional in terms of seizure, movement and information processing. 2) The physical inventory: This is the census conducted in all work places, or may be owned investment company, production units, construction sites , parks equipment, repair shops, warehouses and storage areas, buildings Adminis trative ... etc.. So, the physical inventory reveals the existence of various re al and physical components of the business assets. It must be done at all places where the company operates. It involves all elements whose company owns the pro perty, namely: The land, quarries and reservoirs. The production equipment. The social amenitie s. And ongoing investment. A priori€will be excluded from the physical inventory, items not material existe nce ie the intangible such goodwill and patents. The physical inventory must be conducted at least once a year and within a relatively short not to disrupt the activity of the company. In any event, the company must establish a specific pro cedure, detailed and appropriate equipment owned. This procedure should involve the necessary instructions regarding:

In preparing the inventory. In the course of the inventory. A synthesis of infor mation gathered. And operation thereof. 3) The operation of the inventory: The inventory should lead to a clear and pres ent situation of the company's assets. To do this, it is necessary to bring the book inventory and physical inventory. The differences should be identified and discussed for the investment accounting is updated, reflects the reality and ena bles rational decisions in this area. THE END OF YEAR WORK 4) Irregularity: The main irregularities n nt: Errors imputations voluntary or i nvoluntary: Accounting for the acquisition of an investment in an expense accoun t, this helps to absorb in a year full of investment. The registration of proper ty not belonging to the company, thereby inflating the annual depreciation and t herefore minimize the taxable income. The non-recognition of transfers as provid ed by the NCP, the latter can escape the tax on capital gains from divestiture. The omissions of deliveries to itself, thus enabling the company to amortize suc h delivery in one year. 5) Asset Register: This register is established by Artic les 33 and 34 of Decree N ° 87 -135 of 02-06-87 and the Order of the Ministry of Finance, 21 July 1987 laying down the standard form of register inventory of go ods. The leaves of this register are listed and initialed by the court. The inve ntory record is presented as follows: No. On the registration date of taking inventory object Designation Considerate Output Value Assignment Comment In connection with the transactions of the balance sheet, should be performed a physical inventory, compare it to the roster of investment and inventory records , and therefore support any changes that affect the in-year stock investment com pany. THE END OF YEAR WORK 2) Depreciation The company uses for its operation of equipment, machinery, buildings ... (Inves tments), which are purchased or produced by itself for several years. That is to say, whatever the material, one day it will no longer work, or used for a simpl e reason: its wear. And its value will be automatically reduced from its origina l price. This decrease is actually observed each year and will be supported by t he company. And we can say that the investment is partially consumed and sour se veral years depending on the life of each type of investment. Consumption is cal led "Redemption." 1) Definition of depreciation: Depreciation is an accounting f indings of loss of investment value over time and allows to reconstruct the asse ts invested. 2) The value of depreciation: the interest of determining the depre ciation of the Business is to renew its investment, and avoid paying tax on unre alized profits. 3) The accounting aspect: depreciation yields: The loss of inv estment on the farm, and it uses the account 682 "Staffing depreciation" debtor. decrease in investment will be credited to the account 29 Divisional called " Amortization of investment. 4) Duration of depreciation: The times are determine d by the law and depending on the type of investment buildings 50-100 years. E quipment and materials 10 years. Transport equipment from April to May year. 5 ) Methods of calculating depreciation: a) Amortization constant or linear: This method determines the value of depreciation by dividing the original value on th e life of the investment, and these values are always equal. THE END OF YEAR WORK Depreciation =

Original Value Time Or Depreciation = Original value X taus 100 Rate = Duration After this period, the total amount of depreciation is equal to the original val ue of the investment.€In case the investment is acquired during the year, deprec iation is equivalent to the duration of the purchase date to 31/12 of the year o f purchase. (Figure 01). 12 months 06 months 1.2 / N 1.7 / N 31 / 12 / N Purchase Date Amortization Depreciation (12 months) = 2 Staffing Original Value Term 2 Or Original Value X Rate X N 1200 -Figure 01 THE END OF YEAR WORK N.B The allocation of depreciation is established for each element of the investment by considering always the date of acquisition is to say, we shall make a record for each investment that contains all records. The amortization schedule is as follow: Year Original Value Staffing depreciation Net book value ... ... ... ... ... ... ... ... ... ... Σ ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... 00.00 b) Depreciation real: At the end of each period, an estimated investment compone nts and determining the amount of impairment by comparing the current value to t he value of the previous period.

N.B The amounts of depreciation are often different because the devaluation could in crease or decrease from one year to another. c) The depreciation: The rate of depreciation is equal to the depreciation rate constant coefficient depending on the length. It will be applied to the net book value. Value Depreciation Depreciation rate constant depreciation of Taus ≤ 04 years> 04 years <06 ≥ 06 years ... ... ...%%% ... ... ... X = 1.50 X 2.00 X 2.50 = ... ... = ... THE END OF YEAR WORK 5) The accounting for depreciation: The accounting for depreciation accounts for "24" Production equipment and "25" ocial equipment is as follow: ../../.. 682,294 Depreciation. Amort.E.P. ../../.. ...... ... ... ...... Amort.E. . 682,295 Depreciation. ... ... Amortization of other investments, considered exceptional is the case of land an d intangible assets (VI), accounting as a result: ../../.. 699,292 taffing ex. Amort.terrains ../../.. ...... ... ... ...... Amort.V.I 699,291

taffing ex.

... ... 6) Disposal of investments: ometimes, the company that sells equipment for vari ous reasons (not profitable, defects, etc ....). And the sale of investments is considered exceptional because they are not purchased for resale but for use. Th us, the sale is rarely in business and accounting it must meet several steps are : 1. Accounting for depreciation for the year of transfer, if investment is not already amortized. 2. Transfer the total depreciation of the equipment affected

 

 

 

   

by the assignment and determination of net worth as the difference between the o riginal value and the total amount of depreciation using account 692 VRIC (Resid ual Value THE END OF YEAR WORK Investment Transferred). And finding the exit of investments. 3. Record the amou nt of the sale on behalf of 792 in return for payment. 4. If the company decides to reinvest the capital transferred, it involves more than one account in 1310 won for the disposal of investments. In case the account 792 is above 692 and th e account to avoid paying taxes sure made this product. Depreciation reduces investment in their real values and decreases the net profi t of the company. It allows the latter to buy investment amortized. THE END OF YEAR WORK 3) The preliminary expenses: From the date of creation to its date of activity the company makes several tran sactions that will be required once the company starts to produce, among these o perations include: setting up an internal structure, study and research, ... etc .. To do so costs are incurred, that is to say that money is not committed cons since bet the company does not, so they are regarded as preliminary expenses. Creation date expenses preliminary Activity Date The preliminary expenses which are the account number 20 of the NCP, are by no m eans the case of corporate work. They do not represent a class of goods or a cla ss representing the property of the company. Moreover, national accounts integra tes the level of charges. 1) Definition of preliminary expenses: The national ac counting plan defines them as: "The costs incurred during the creation of the co mpany,€the acquisition of its resources and ongoing operating costs related to i ts development or improvement of its activity "These costs include:

The costs of the social compact are the costs of incorporation, increase or redu ction of the capital, and the cost of extension of society, transforming merger or similar transactions. Investment costs include only the right to change the f ees or commissions and legal fees on investments. Borrowing costs are those incu rred in connection with the underwriting of loans and interest during constructi on. THE END OF YEAR WORK Operating costs include pre-start expenses incurred prior to the operation of th e company or its new activities. 2) Operating expenses preliminary account: The national accounting plan is to save costs at the preliminary nature of expen se during the year and then transfer them to the concerned Divisional Accounts M aster Account "preliminary expenses". The accounts are divisional 200-208: 200 "201" 202 "203" 204 "205" 208 " Costs related to the social pact. " Loan Fees. Investment costs. Vocational trai ning costs. Operating costs prior to start. Costs of study and research. " Excep

tional costs. These accounts are debited by the credit of 75 "Transfer of production costs" or a total of 78 "Transfer of operating expenses" of the expenses to be spread ove r several years, and have already been registered according to their nature resp ective accounts in 60-68. In any case, the preliminary expenses are charged dire ctly to the accounts 200-208. 3) Establishment of preliminary expenses: In these fresh notes in accounts concerned and then transfer to the account 20 "prelimin ary expenses" as a result: Recognition of expenses: ../../.. 61,612 Mat. fou.cons. ervices ...... ... ... 56 48 Availability debts UROPE ... ... ... ... THE END OF YEAR WORK Transfer: ../../.. 20 75 Preliminary expenses. Tran.ch.pro. ...... ... ... 2nd transaction: ../../.. 63 68 Personal expenses ...... ... ... 56 48 Availability debts UROPE ... ... ... ... Transfer: ../../.. 20 78 Preliminary expenses. Tran.ch.d Oper. ...... ... ...

 

4) resorption of preliminary expenses: These things must be transferred to Class 2 "investments". In each must find a year-end absorption, as a result: 31/12 / 699,209 Exceptional allocations .. Résorption.des cost per ...... ... ... The absorption of preliminary expenses should not exceed 5 years. As soon as the preliminary costs are absorbed, you cancel the account from 20x al'écriture fol lowing: [31/12 last year resorption]. 209 20 Resorption f.P. 31/12 / .. ...... ... ... Preliminary Expenses THE END OF YEAR WORK Account Account 60-62 63-68 Recognition are loaded Availability Debts Transfer 75 Account 78 Accounts Transfer 20 Preliminary Expenses Transfer Transfer Resorption of 209 F.P

The major expenses incurred by business will be spread over several years thanks to the absorption of the costs, which increases each year of his share. p re costs. Cancellation

THE END OF YEAR WORK

   

ource: General Accounting depth - edict blue pages.

chematic preliminary expenses

Chapter III: Inventory Adjustment At the end of each period, we must ensure that accounts receivable balances repr esent the value of goods and materials supplies products manufactured by the com pany. Then, work to end the period on the third class, are to adjust account bal ances with the existing stock and the stock value at cost. 1) Adjustment of account 38 "Chain" Account '38 'has always resulted in the closure, it is not being sold represents two cases: 1. The account "Buyer" has a debit balance, ie they received the bil l but not the goods. 2. The account "Buyer" present a positive balance, ie they received the goods but not the invoice. Regularisation: 1. We must credit the ac count "37 Goods outside." "Chain" by debiting the 31/12 / 37 38 Goods at ext. .. Purchases ...... ... ... 2. It should debit the account "Buy" by crediting the suspense account "to recei ve 538 Invoice. 31/12 / 38,538 Purchases .. ...... Bill receivable ... ... THE END OF YEAR WORK 2) Adjustment of sales You can have two cases: 1. Goods sent unbilled, meaning that the products have b een delivered to customers, but at the end of year invoices have not yet been es tablished and delivered. 2. Invoices but not the goods, ie that the invoices wer e prepared and sent to customers but the goods have not they were not delivered. Regularisation: 1. We debit the account "478 bills to establish" by the credit of "710 production sold. 478 71 Invoice needed 31/12 / .. ...... ... ... Production

2. You will see the output of the stock, although products are still physically because they are no longer in business ownership, and that the debit account "Pr oduction stored 720" and the crediting of the "350 Finished goods . 31/12 /

 

old

72 35

.. ...... Finished ... ... 3) Adjustment of the value of stores: To value stocks, we must first enhance the movement of inventory throughout the year, then the stock value of the final period. A) Valuation of stock movement: The company is free to estimate the cost of production with which she recorded t he movements of stock, and for practical reasons, it has to be used during a sta ndard cost, because it does can not calculate the actual cost of production for each input and output of manufactured products. THE END OF YEAR WORK After calculating the standard cost, the company has the option to use one of th ree methods to record the movement of stock during the period. First method: FIFO (First in first out / first in, first out) In this method we must evaluate the output cost of the first entries (one starti ng with the initial stock). 2nd method: LIFO (Last in first out / last in first out) It assesses the cost out the latest entries, ie the latest products entered do n ot stock. Third method: CMUP (weighted average unit cost) It calculates an average cost per unit after each entry in stock, (Q0, C0), (Q1, C1), (Q2, C2) + ... Q0XC0 Q1XC1 Q0 + Q1 CUMP1 = CUMP2 = Q1XC1 Q2XC2 + Q1 + Q2

No Q: Quantity of old products stored in a Q n: Number of previous products stor ed in C n: Cost of old products stored in C, No. 1: Cost of products stored in t he previous B) Valuation of existences: Inventories of semi-finished products, work in yard and finished goods should be valued at production cost (purchase cost of product s implementation + direct and indirect expenses incurred by their manufacture) . If a gap appears between the end of period stock valued at standard cost, and o ne that is valued at actual cost in this case the mechanism of regulation of mov

 

tored production

ements and balances is based on the following equations: r = (Ne - Ns) × Cr = ( Do × Cr) - (Ns × Cr) r = (Do × FC) ± (Do × E) - (Ns × FC) ± (Ns × E) THE END OF YEAR WORK imply determine "E" to regulate: The movements of inputs: ± (Do × E) The moveme nt of outputs: ± (Ns × E) 4) The inventory system: On a special exception granted by the Ministry of Finance, some companies, to de termine its outcome, must establish at the end of the period of a survey and eva luation of these goods store. This method is called "inventory system. During th e period, the stock accounts are not eventful. We find the consumption of each p roduct by the formula: consumption = initial stock + purchases - ending inventor y Accounting Records: Beginning of year: the accounts "30-37" are debited to the value of existing r eal balance sheet closing last year. During the exercise will be of 38 "Chain" is debited for the amount of purchases and incidental expenses crediting the ac counts "providers. Year End: inventory accounts are debited from the value of Existing actual consumed by the credit "or 61" or 72 materials "stored productio n. supplies and accounts for 60 "Goods consumed" These accounts are credited with the value of early exercise by debiting account s "60, 61 or 72" Account 38 "Chain" is balanced by the flow accounts "60 or 61." THE END OF YEAR WORK Chapter IV: Claims 1) Adjustment of claims: The accounts of the Class 4 "Claims" are the company's assets other than investm ents and stocks.€Receivables represent amounts of money that the company will re ceive when it wants to assert its rights. Any event that may jeopardize this pos sibility must be registered. The accounting should reflect the depreciation of t he claim. The events that can put cash in the carrying value of an asset are not limited to the effects on claims only. 2) Other adjustments The accounts of the class "4" record jobs reversible, their pay should normally be paying. Otherwise the accounts of category "5" record resources irreversible, their balance shall be payable. However, some accounts of category "4" have a c redit balance, and some accounts of category "5" have a debit balance. o, in or der to submit a report which, all accounts of Class "4" have an outstanding bala nce, and all accounts of category "5" have a credit balance: It regulates the de bit balances of accounts of category "5 "the total of 40," Accounts receivable l iabilities. It regulates the credit balances in accounts of category "4" has 50 of the "Accounts Payable asset. THE END OF YEAR WORK Chapter V: Provisions 1) Definition The provisions are linked to prudent principles and autonomy of the year. It is probable depletions (uncertainty in implementation) to attach to the exercise be cause they result from events occurring or in progress at year end, two possible cases:

 

 

 

 

Burden likely. Likely decline in value of property. 1. Charges unlikely: It should be noted the charge, the counterparty is a liability (operation to inf luence the result). These charges are likely: Allowances (litigation). Repairs (guarantees given to customers). Foreign exchan ge losses ... The accounts involved are: An account of expenses (depreciation and provisions / probable load) at a rate w hich is inscribed the amount of allocations. An account of debts (provisions for liabilities / debt likely) the credit of which are the same amounts. 2. Likely decline in value of property:

It should be noted the decrease in value (estimated) of the property and it is f or the company to a loss: the return will be a charge account. The goods concerned are: capital. stocks. claims. marketable securities. THE END OF YEAR WORK The company must retain the original amount of the property and record the provi sion in a separate account. The accounts involved are: 29 "Impairment of assets". 39 "Impairment of stocks. 49 "Impairment of receivables. 59 "Investment Provisions". Impairment of ecurit ies 68 "Provision charges. As for depreciation, we must consider that the whole of the two accounts, Repres en ntant depreciated property, which increases and decreases left to right. 2) The need for provisioning: Under the principles of business continuity and independence of accounting perio ds, provisions must be made for that accounting records show the real situation of the company, even if no profits. 3) Role of provisions: Economic: The provision for depreciation will reduce the real value to assets impaired. Financial: The budget forecast will provide funds to cover a charge or a diminution in value of an active element. 4) Method of practical application: 1) Provision for depreciation of stocks: There was a result of an inventory that the real value of stocks below their actual cost of purchase and that due to ac cidental damage, or to lower material costs First, the company that depreciation should make provisions for bad stocks; These provisions must be included in the balance sheet, in lateral value of the items concerned, THE END OF YEAR WORK

 

they are credited to account 39 "Provisions for impairment of inventory" by debi ting the account 699 "exceptional allocations. 2) Provision for impairment of tr ade receivables: If a client is deficient in terms of regulation, we must save t he entire debt issue is settled by debiting Account 699 "Depreciation exceptiona l" and credited with 49 "allowance for doubtful receivables. The provision is ca lculated from the pre-tax amount of the claim. Indeed,€the value added tax (VAT) is paid to the state at the time of registration of the bill and if unpaid, the company can recover the fee for the amount not collected. 3) Provision for impa irment of securities: There has been a result of an inventory, the real value of the securities is less relative to their purchase value, in this case the compa ny must make a provision for impairment of securities . It is clear that the sho rtfall will be equal to the difference between the actual value and their purcha se price. These provisions are recorded to Account 699 "Depreciation exceptional " by the credit are 49 known "Provision for impairment of receivables. 4) Provis ion for losses and expenses: This type of provision is different from other stor es, because it relates to loss and the likely costs, then such provisions are de bts and the company likely to be required to register in order to show the liabi lities to the maximum of the company. The amount of the allowance should equal t he amount of the anticipated load: Allowance for probable loss: the amount of th e expense or risk. Provision for leave accrued over several years: the amount of the fraction of the charge that relates to the exercise. There are two divisional accounts for this type of provision: Account 190 "Provision for probable losses": It is found that the risk of loss i s linked to environmental factors that lead the company to detail the risks and applications. It may take a few risks as: THE END OF YEAR WORK Expenses incurred in connection with disputes with third parties business. The r isk of exchange on the following transactions with persons not residents. Compte 195 "Provisions to go back over several years" Unlike before, this type correspo nds to the likely costs which, given their nature, their importance can not be s upported during the single period or they are committed, as saunent It is from f unds in reserve allocations kid.

The amount of the burden which the current year shall be debited to the account 685, "Provisions" by crediting the account 195 "Provisions for accrued over seve ral years." When the expected load is realized, it would be recorded in the inco me interest of the class "06" to flow, in return, the allowance account is debit ed by the credit of 75 "Load transfer of production" or 78 "Transfer of operatin g expenses, and possibly by the credit of 796 "Resumption of prior years' expens es" for the amount of the excess of the allowance on the effective charge. 5) Adjustment of impairment losses: When the item of asset depreciates at the end of fiscal court, then in future pe riods, we estimated the amount of new supply, we are thus led to increase, decre ase or cancel the provision. THE END OF YEAR WORK Chapter VI: Regulation of costs and revenues Applying the principle of factual evidence, during the accounting period, operat ions have been recorded on the basis of supporting documents. At the end of the

period, four cases may arise: Charges relating to the exercise have not yet been recorded. Loads were recorded in the accounts by type of class six "charges" in the commitment of expenditure , but all or a portion of these charges do not relate to the current year. Produ cts that are for the year were not counted. Products that do not involve the exe rcise yard were recorded on the basis of documents.

1) Adjustment of charges: It should distribute the burden among the different exercises in order to relate to the exercise loads on the exercise yard. 1. Increased costs: ome are period ic costs, for example, telephone communications are subject to a billing every t hree months. In the end it is time to attach to the exercise of expenses not yet accounted for the fact that the receipt is not received by the company. In this case, it is necessary to determine the amount of these charges, to consider, an d this by debiting expense accounts affected by the credit of account 538 "Bills Receivable" and crediting the accounts of debts interested . 2.€Reduced load: I t is excluded from the exercise loads that have been counted but that does not i nvolve the reporting period. Under the principle of independence exercises, it i s important to take as the charge that the party is indeed about the exercise wh ich is handled, the other part will be placed in the debit account THE END OF YEAR WORK 468 "Deferred expenses" by the credit account over before increased. 2) Adjustment of products: Even as the charges, the adjustments are to increase or decrease the amount of p roducts. 1. Increase in: These relate to the exercise of products not yet includ ed in this case, we credit the debt interest 438 "Discount to get" or 427 "Accru ed income". 2. Decrease in: To exclude the exercise of deferred revenue, but tha t does not concern him, and which has carried over to next. In this case, the ou tput will be reduced through the account 578 "deferred revenue" which will be cr edited by debiting the revenue account credit previously. ervice account balanc e 72 "Production stored": The account balance 72 "Production stored" indicates t he net change in value of production into the stock during the period, and the v alue of output used in this same period. Credit balance: The production value is greater than that which was used for semi works and one that was sold for finis hed products. Debit balance: The value of the products used during the period ex ceeded the production of this period. There is, therefore, a levy on the initial stock at the beginning of the period. THE END OF YEAR WORK Chapter VII: The reconciliation Between the bank account held by the company and sent the extract from this same bank, there is generally the differences are mainly due to: Errors on the amounts that may be perpetrated by the banker or the company. Cheq ues issued and recorded by the company, are recorded by the bank upon receipt by the recipient of the check. The registration of transfer is done by the banker, and he warned the company. Fees or interest are recorded by the banker and the

 

 

company.

It is therefore necessary to establish a reconciliation that will allow us to ju stify the differences balances. 1) Definition: The reconciliation is an internal document prepared to make the reconciliation o f the balances between the bank account held by the company and on behalf of the company held by the bank to justify adjusting entries. 2) Establishment of the reconciliation statement: 1) are placed side by side the bank account held by the company and the account statement sent by the banker. (Figure 1) 2) It balances the starting point, in c ase of differences, we research and we are leading the same proceeding by croiss ement to balance the starting balances. (Figure 2) 3) We construct the reconcili ation report will summarize are unmarked and reconcile balances at end of period . (Figure 3) 4) It saves the necessary corrections in the accounts of the compan y. Returning to the amounts added in the state's side of the business. (Figure 4 ) THE END OF YEAR WORK tate Bank Reconciliation 485 Bank account held by the company * (1) 20,000 * (3) 30,000 ............ 5000 .......... 8000 37 000 Account statement 31/12 In the company held by the bank * (2) 5000 ......... ......... 115 000 1) * (3) 50,000 50000 Figure 1, 2 120,000 120,000 tate Bank closer to 31/12 485 Ba nks might account held by the company Balance Date 31/12 re Vir. Customer Balance again Totals 107 000 37 000 70 000 t Credit Account of the company held by the Bank Date 31/12 re Ch.n · Rehabilitation Balance Balance 8000 Total 107 000 115 000 Debit Credit Figure 3 31/12 / 485,470 Bank reconciliation statement reviews Next 70,000 70,000

/ C .......... 20,000 30,000 70,000 * (

31/12 libels departu 107 000 107 000 Debi 31/12 libels departu 115 000 New 115 000

 

 

   

/ D * (2)

Figure4 THE END OF YEAR WORK Remark The reconciliation is done at the end of each period following the importance of banking (1 month, 3 months, 6 months, 12 months). Important: The amounts charged to the account by the company are credited by t he banker for the same amount credited and balances. 485 Bank (held by the company) In the company (held by the banker) Remark A sum may be divided into one of the sides in two amounts, so in pointing it mus t ensure reciprocal amounts. o a state of periodic reconciliations established between the company and its b ank, allows both parties to keep records sound like they can not accumulate too many errors if they are left until the end of exercise will cause difficulties f or both parties. THE END OF YEAR WORK Conclusion It is now clear that determining the outcome of the exercise that accurately ref lects the actual situation of the company we must work to make year-end accounti ng remember all the accounting work and non-accounting c that is to say, to adju st the position of accounts assets and liabilities to real data provided by the non-accounting inventory. These works are therefore to count all the assets and debts of the company, without adjusting entries relate to depreciation, provisio ns, charges and deferred revenue ..., determine the different results, gross mar gin, value-added results Operating ..., to net income for the year, the adjustme nt that we just studied, are necessary for the determination of a clean result i s true for the year. And finally establish the balance sheet and other summary t ables, and the closure and reopening of books. It will take a lot of concentrati on and alertness during the completion of this work, and comply with accounting principles and methods of estimation and regulation proposed by the National Acc ounting Plan (NCP).

 

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