本文发表在 rolia.net 枫下论坛Q: 请教accounting的高手们： Accounts analysis 是怎么回事，如何做的， 主要的procedures 都有什么？非常感谢！
A: identify major items of the account; evaluate reasonableness of the account balance, and suggest journal entries to fix problems
Q: could you pls explain a little bit detail? what does the major terms of accounts mean? and how to judge the reasonableness of the balance? In order to do the account analysis, what kinds of information, statements or reports do i need? Do I need to compare the current balance with the previous periods?
A: In my company, this is normally done together with account reconciliation process. More focus is on balance sheet items. ( Generally if we are certain about balance sheet, there shouldn't be major problems with income statement. ) For example, you will need to identify what items are included in your prepaid expenses or accruals. If you see prepaid expenses not adequately amortized, an adjustment entry needs to be made to fix it. For A/R, you want to know the aging, bad debt reserve and whether we see improvements or deterioration of the accounts. Reasonableness of account balances is analyzed in relation to nature of transaction, sales, company size, industry norm, business performance, etc. Some of the accounts need to be done at monthend. Some can be completed shortly after the close. Hope this helps.
Q: What kind of issues might be happening on accrual accounts? I just wonder what we normally check on accrual accounts each month
A: A few things to consider:
1. what accrual items you currently have? any new items?
2. basis for accrual. whether there is any change to the basis. if so, whether the new basis has been reflected in accrual entries.
3. check whether all accruals have been booked. if any item not needed any more, should have stopped booking, and remove balance.
4. if payment is expected in current period, check whether it has been booked to the accrual account. sometimes it might be coded to expense account without reversing the accrual.
5. if there is variance between payment and accrual, make an entry to remove the variance.更多精彩文章及讨论，请光临枫下论坛 rolia.net
A: identify major items of the account; evaluate reasonableness of the account balance, and suggest journal entries to fix problems
Q: could you pls explain a little bit detail? what does the major terms of accounts mean? and how to judge the reasonableness of the balance? In order to do the account analysis, what kinds of information, statements or reports do i need? Do I need to compare the current balance with the previous periods?
A: In my company, this is normally done together with account reconciliation process. More focus is on balance sheet items. ( Generally if we are certain about balance sheet, there shouldn't be major problems with income statement. ) For example, you will need to identify what items are included in your prepaid expenses or accruals. If you see prepaid expenses not adequately amortized, an adjustment entry needs to be made to fix it. For A/R, you want to know the aging, bad debt reserve and whether we see improvements or deterioration of the accounts. Reasonableness of account balances is analyzed in relation to nature of transaction, sales, company size, industry norm, business performance, etc. Some of the accounts need to be done at monthend. Some can be completed shortly after the close. Hope this helps.
Q: What kind of issues might be happening on accrual accounts? I just wonder what we normally check on accrual accounts each month
A: A few things to consider:
1. what accrual items you currently have? any new items?
2. basis for accrual. whether there is any change to the basis. if so, whether the new basis has been reflected in accrual entries.
3. check whether all accruals have been booked. if any item not needed any more, should have stopped booking, and remove balance.
4. if payment is expected in current period, check whether it has been booked to the accrual account. sometimes it might be coded to expense account without reversing the accrual.
5. if there is variance between payment and accrual, make an entry to remove the variance.更多精彩文章及讨论，请光临枫下论坛 rolia.net