Essays on The Accounts and the Classes of Transactions in the Acquisition and Payment Cycles Assignment

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The paper "The Accounts and the Classes of Transactions in the Acquisition and Payment Cycles" is a great example of a finance and accounting assignment.   Acquisition and Payment cycles are identified as two credential aspects of financial accounting. These two aspects encompass three specific classes of transactions and account types, which are enlisted hereunder. Classes of Transactions  Acquisitions of goods and services Cash disbursements Purchase returns as well as allowances and purchase discounts Accounts Types  Accounts PayableAccount payable encompasses all possible expenses that the business process will have to incur/pay with regard to business transactions.

Transactions associated with the attainment of necessary goods and services are categorised as a part of this account. In this context, expenses related to ‘ maintenance of machinery’ , ‘ payment of taxes’ , ‘ freight charges’ and ‘ necessary business utilities’ are accounted under the ‘ manufacturing expense control account’ that forms a substantial part of ‘ goods and services transactions. Specific expenses related to selling and delivery of an ordered quantity of goods and services manufactured by the business process. Certain other expenses associated with administration functions also are accounted under the ‘ administrative expense control account’ of the ‘ goods and services transactions.

In this context, expenses associated with subsidiary account types, payment of legal and audit-related fees would be categorised under ‘ administrative expense control account’ (Prentice Hall Business Publishing, 2008).  Raw Material Purchases AccountsThis account specifically comprises two specific aspects that include ‘ purchase returns and allowances’ and ‘ purchase discounts’ . Both of these aspects can be accounted as beneficiary attributes for the business process depending on the fact that these accounts aids in maintaining the cash within the business process (Prentice Hall Business Publishing, 2008).

 Cash in BankThe account specifically comprises the expenses associated with plant and machinery establishments. Certain constraints of this account also encompass the possible expenses associated with the ‘ acquisition of goods and services. In addition, the ‘ prepaid expenses incurred by a business organization are also considered within this account (Prentice Hall Business Publishing, 2008).

References

Arens, A. A., Best, P., Shailer, G., & Fiedler, B. (2013). Auditing, assurance services and ethics in Australia. New Jersey: Pearson Higher Education.

Crumbley, D. L., & Zabihollah, R. (2004). U.S. master auditing guide. USA: CCH.

Gramling, A. A., Johnstone, K. M., & Rittenberg, L. E. (2012). Auditing. USA: Cengage Learning.

Prentice Hall Business Publishing. (2008). Audit of the acquisition and payment cycle: tests of controls, substantive tests of transactions, and accounts payable. Retrieved from http://www.mccc.edu/~horowitk/documents/arens12e_19.pdf

Quizlet LLC. (2015). Purchase cycle. Retrieved from http://quizlet.com/10459964/audit-411-ch-18-flash-cards/

Rittenberg, L., Johnstone, K., & Gramling, A. (2011). Auditing: A business risk approach. USA: Cengage Learning.

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