Nowadays, most companies use accounting softwares to prepare financial statement

User Generated

goelnag731

Business Finance

Question Description

Nowadays, most companies use accounting softwares to prepare financial statements. As long as data entry is done right (such as A/R, A/P, Payroll or other general journals), all financial statements will be created and reviewed at the same time.

 

In those cases where we have to prepare all these statements manually, which one should we prepare first?

 

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Explanation & Answer

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Hi I work for JP Morgan chase . In JP Morgan we use accounting softwares to prepare financial statements all the times.

there are some restriction on making General Journal Entries to Accounts Receivable (A/R) and Accounts Payable (A/P) accounts.

Normally, the preferred way to change the balance in an A/R or A/P account is by recording transactions, such as customer invoices or vendor bills. However, sometimes it’s more convenient to make a General Journal Entry.  A common use of General Journal Entries to A/R or A/P accounts is to set up customer or vendor balances in a new QuickBooks company file.

If you opt to make a General Journal Entry to an A/R or A/P account, such entries are subject to these restrictions:

  1. You can’t use more than 1 A/R or A/P account in a single journal entry
  2. You must enter a customer name for a General Journal Entry to an A/R account and a vendor name for a entry to a A/P account.

When we record a General Journal Entry to an A/R or A/P account, the General Journal Entry will appear in the transaction list for the customer or vendor specified in either the Customer Center or Vendor Centerprovided that the A/R or A/P account is on the first line of the general journal entry and is therefore the transaction source.

so  generally we prepare general journals first.

Please let me know if you need any clarification. I'm always happy to answer your questions.

qnex xavtug (29)
University of Maryland

Anonymous
Just the thing I needed, saved me a lot of time.

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