An accounting system is a set of accounting processes with integrated procedures and controls. The intent of an accounting system is to record business transactions, summarize those transactions into an aggregated form, and create reports that can be used by decision-makers to monitor, analyze, and improve operations.
BERGAMO BAY COMPANY
List of Account Balances
December 31
Debit
Credit
Cash
$80,000
Accounts receivable
$49,000
Raw materials inventory
($29,500 - $4,300 - $7,700 - $2,000)
$15,500
Work in process inventory (Note)
$52,000
Finished goods inventory
$6,000
Prepaid rent
$2,000
Accounts payable
$9,900
Factory wages payable
($5,000 + $15,000 + $5,000)
$25,000
Notes payable
$12,900
Common stock
$20,000
Retained earnings
$84,000
Sales
$223,700
Cost of goods sold (Note 2)
$113,000+$13,000
$126,000
General and administrative expenses
$45,000
Totals
$375,500
$375,500
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