Accounting System Paper
Accounting System Paper
Jamira Perry
HCS/405
July 18, 2011
Diana Schilling
Accounting System Paper
When it comes to accounting, people only think that it is associated with inside banking. There is more to accounting than inside banking because accounting has elements as well as any other system. It may differ from other types of systems because it is just what it says and that is accounting. Some people don’t like the accounting situation because it consists of math and that is something they are not into. I am going to discuss some of the elements of the accounting system and why accounting is important for healthcare organizations. One element of accounting is chart accounts, which is a list of each item in the system. The chart accounts are divided in to five sections and they are assets, net assets or fund balances, liabilities, expenses, and revenues. The things about chart accounts is that each account has its own individual identifying number so the system will know exactly who it belongs to. The second type of element of accounting is the general ledger, and this organizes information by the accounts. The thing about this is that the chart accounts acts like the contents to the general ledger and the general ledger maintains a year-to-date account balance for each account in the system. The data is entered into the system only once and once this happens, the data entry has to be approved by the user. The third element is journals and subsidiary journals, which is called books of original entry and used to record accounting transactions way before they are entered into the general ledger. The journals are organized by information chronologically and by the transactions types such as receipts and disbursements. There are three main journals and they are the cash disbursement journal, cash receipts journal, and he general journal. The cash disbursement journal is the chronological record of the checks that people write, the cash
Jamira Perry
HCS/405
July 18, 2011
Diana Schilling
Accounting System Paper
When it comes to accounting, people only think that it is associated with inside banking. There is more to accounting than inside banking because accounting has elements as well as any other system. It may differ from other types of systems because it is just what it says and that is accounting. Some people don’t like the accounting situation because it consists of math and that is something they are not into. I am going to discuss some of the elements of the accounting system and why accounting is important for healthcare organizations. One element of accounting is chart accounts, which is a list of each item in the system. The chart accounts are divided in to five sections and they are assets, net assets or fund balances, liabilities, expenses, and revenues. The things about chart accounts is that each account has its own individual identifying number so the system will know exactly who it belongs to. The second type of element of accounting is the general ledger, and this organizes information by the accounts. The thing about this is that the chart accounts acts like the contents to the general ledger and the general ledger maintains a year-to-date account balance for each account in the system. The data is entered into the system only once and once this happens, the data entry has to be approved by the user. The third element is journals and subsidiary journals, which is called books of original entry and used to record accounting transactions way before they are entered into the general ledger. The journals are organized by information chronologically and by the transactions types such as receipts and disbursements. There are three main journals and they are the cash disbursement journal, cash receipts journal, and he general journal. The cash disbursement journal is the chronological record of the checks that people write, the cash
References: Baker, J.J., & Baker, R.W. (2011). Health care finance: Basic tools for nonfinancial managers (3rd ed.). Jones & Bartlett. Labyrinth Inc.. (2011). . Retrieved from http://www.labyrinthinc.com/SharedContent/SingleFaq.asp?faqid=29