Designing Accounting Spreadsheet Reports And Inventory System Comparison

Separation of Data and Report Areas in Accounting Spreadsheet Reports

Naming cells in spreadsheet:

In spreadsheet, user could give the name of a cell according to the choice. This assists the user as well as the reader to understand that how the figures have been calculated. Naming tools make it easy for a spreadsheet user to evaluate the formula and the reference (Stratton, SAS Institute Inc., 2009).  

Spreadsheet:

Normal view:

Sales ($) Save Time On Research and Writing Hire a Pro to Write You a 100% Plagiarism-Free Paper. Get My Paper	Expenses ($)	Net Profit ($)
125000	25400	99600

Formula view: 

In spreadsheet, a negative number could be shown in various ways such as along with the minus sign, in bracket or with the red sign (Snyder and Davenport, 2013). Usually, the negative numbers are shown in the brackets by the accountants to make the report and spreadsheet presentable.

Spreadsheet:

Particulars	Amount ($)
Sales	$25,000.00
Direct Costs	($12,600.00)
Gross margin	$12,400.00
Indirect Costs	($16,600.00)
Net Profit	($4,200.00)

Separation of data and report areas:

The financial reports and the analysis of the reports are always presented in the two files, excel file and doc file. These reports are prepared separately to evaluate and analyze the performance of the company in better way. The report file evaluates the spreadsheet to help the users to reach over a conclusion whereas the excel file is prepared by the accountants of an organization to prepare the data (Hoque, 2002).

A separate data and excel file is quite crucial for internal and external stakeholders of the company to generate the better idea about the position and the performance of the company.   

Ahuja Ltd
Trading Account
For the year ended 30 April, 2017
Particulars	Amount ($)	Particulars	Amount ($)
Opening Inventory:	Closing Stock:
Raw Material	55000	Raw Material	19000
Work in Progress	15000	Work in Progress	9800
Purchases:
Raw Material	16000	COGS	105600
Direct labour	14200
Direct Expenses:
Depreciation	9200
Factory Insurance	6500
Manufacturing overhead:
Manufacturing Expense	9600
Factory Salary	8900
TOTAL	134400	TOTAL	134400
Ahuja Ltd
Income Statement
For the year ended 30 April, 2017
Particulars	Amount ($)	Total ($)
Revenues:
Sales	195000
Other Income	0
Total Income (A)	195000
Expenses:
COGS	95600
Salary	26500
General expenses	14000
Advertisement	6500
Light and Power	4500
Rate and Taxes	6600
Total operating expenses (B)	153700
Net Income (A-B)	41300

“IF” is a spreadsheet function which is used for the logical calculations. It allows a user to use own logics and reach over a conclusion. It makes it easy for the companies and the user to collect the data according to the individual basis.  

IF (Something is False, then do this, otherwise do something else).

Profit:

Normal view:

Ahuja Ltd
Income Statement
For the year ended 30 April, 2017
Particulars	Amount ($)	Total ($)
Revenues:
Sales	195000
Other Income	0
Total Income (A)	195000
Expenses:
COGS	95600
Salary	26500
General expenses	14000
Advertisement	6500
Light and Power	4500
Rate and Taxes	6600
Total operating expenses (B)	153700
Net Income (A-B)	Profit/41300

Ahuja Ltd
Income Statement
For the year ended 30 April, 2017
Particulars	Amount ($)	Total
Revenues:
Sales	200000
Other Income	0
Total Income (A)	200000
Expenses:
COGS	115000
Salary	65000
General expenses	22000
Advertisement	12000
Light and Power	16000
Rate and Taxes	6500
Total operating expenses (B)	236500
Net Income (A-B)	loss/-36500

Formula view: 

No profit no loss:

Normal view:

Ahuja Ltd
Income Statement
For the year ended 30 April, 2017
Particulars	Amount ($)	Total
Revenues:
Sales	187100
Other Income	0
Total Income (A)	187100
Expenses:
COGS	105600
Salary	41000
General expenses	17000
Advertisement	7000
Light and Power	12000
Rate and Taxes	4500
Total operating expenses (B)	187100
Net Income (A-B)	no profit no loss0

Inventory of an organization could be administered by a company through 2 inventory system i.e. perpetual inventory system and periodic inventory systems. It assists an organization to administer the inventory in a better way. Firstly, perpetual inventory system suggests that an organization must record all the translation at the time of transaction time however; the periodic system explains that the inventory must be recorded in the end of an accounting year (Davies and Crawford, 2011).

Date	Particulars		Amount ($)
01-01-2018	Opening Stock	(100 units at $ 20 each)	2000
16-01-2018	Purchase	(60 units at $ 20 each)	1200
22-01-2018	Issue	(110 units at $ 30 each)	3300
31-01-2018	Closing Stock	(220 units at $ 20 each)	4400

Perpetual inventory system:

Perpetual inventory system:
Date	Particulars	Purchase	Issue	Closing Balance
No of units	Unit cost	Total cost	No of units	Unit cost	Total cost	No of units	Unit cost	Total cost
2011
01-01-2018	Opening Stock							100	20	2000
16-01-2018	Purchase	60	20	1200				100	20	3200
								60	20
22-01-2018	Issue				110	30	3300	50	10	500

Periodic inventory system:
Particulars	Amount ($)	Particulars	Amount ($)
Opening Stock	2000	Sales	3300
Purchase	1200	Closing Stock	4400
Gross profit	4500
Total	7700	Total	7700

The paper takes the concern on the importance, disadvantages and advantages of spreadsheet. Spreadsheet is a crucial tool for the organizations to maintain and manage the performance of the company. It is an important application which is used by an organization to calculate and administer the financial data and the information of the company. Though, spreadsheet contains few errors as well which affects the performance of the company.

Spreadsheet is an e document that is used by the companies and the users to evaluate the data of an organization in grid format. It manages the data in the row and column to separate them and make them understandable easily. It is mainly used to record and manipulate the accounting data. There are various advantages and disadvantages of spreadsheet (Weygandt, Kimmel & Kieso, 2015).  Spreadsheet is recognized as one of oldest application which has been developed for the PC and Mac Book to make the recording and calculations of data simple

Perpetual Inventory System versus Periodic Inventory System

Spreadsheet is most commonly used by a business to prepare the budgets, produce graphs, charts, tables etc to manage the different data of the organization in better way. In an association, spreadsheets are most commonly used by the company to forecast the future position and performance, basic payroll, tax calculations, revenue identification of the company etc. Spreadsheet is recognized as one of oldest application which has been developed for the PC and Mac Book to make the recording and calculations of data sample (Word press, 2018). Entire applications of spreadsheet are same in terms of rows, columns, formulas and various other functions.  Various pros and cons of spreadsheet are:

Spreadsheet is a crucial tool for the organizations to maintain and manage the performance of the company. Spreadsheets are used for the companies for:

• What if analysis which rebuilds the statistical model for the user
• It could be shared via email (Chron, 2018)
• It could be save for future reference on cloud
• Data could be maintained through data backup option
• Tables, charts and graphs could be developed easily
• Cheap and fast (Snyder & Davenport, 2013) 

This point explains that spreadsheet is a main toll for each organization to prepare and present the financial statement in a better way. Spreadsheet prepares and presents the data in simple manner to the user so that a better conclusion could be made.

Few disadvantages are also there of spreadsheet which are as follows:

• It does not offer an exact depiction of definite accounting things and the accounting figures
• time consumption
• some models are complex to use
• In some models, extra software is required  (Hillier, Grinblatt and Titman, 2011)
• One cell could affect the entire result 

This point explains that spreadsheet is a main tool for each organization to prepare and present the financial statement in a better way. However, few issues of the spreadsheet make it difficult for the company to generate better result about the position of the company. 

Conclusion:

On the basis of the evaluation, it has been recognized that the Spreadsheet is most commonly used by a business to prepare the budgets, produce graphs, charts, tables etc to manage the different data of the organization in better way. In an association, spreadsheets are most commonly used by the company to forecast the future position and performance. However, a user must be trained enough to use spreadsheet. Otherwise it leads to the company towards the losses.  

References: 

Annual report. (2017). Wesfarmers Limited. (online). Retrived on 8^th April 2018 from: https://www.wesfarmers.com.au/docs/default-source/default-document-library/2017-annual-report.pdf?sfvrsn=0.

Bromwich, M. and Bhimani, A., (2005). Management accounting: Pathways to progress. Cima publishing.

Chron. (2018). Advantages and disadvantages of spreadsheet. (Online). Retrieved on 8^th April 2018 from: https://smallbusiness.chron.com/advantages-disadvantages-spreadsheets-26551.html

Davies, T. and Crawford, I., (2011). Business accounting and finance. Pearson.

Dixon, A.D. and Monk, A.H., (2009). The power of finance: accounting harmonization’s effect on pension provision. Journal of Economic Geography, 9(5), pp.619-639.

Gapenski, L.C., (2008). Healthcare finance: an introduction to accounting and financial management. Health Administration Press.

Garrison, R. H., Noreen, E. W., Brewer, P. C., & McGowan, A. (2010). Managerial accounting. Issues in Accounting Education, 25(4), 792-793.

Hansen, D., Mowen, M. and Guan, L., (2007). Cost management: accounting and control. Cengage Learning.

Hillier, D., Grinblatt, M. and Titman, S., (2011). Financial markets and corporate strategy. McGraw Hill.

Hoque, Z., (2002). Strategic management accounting. Spiro Press.

Snyder, H. and Davenport, E., (2013). What does it really cost? Allocating indirect costs. Asian Libraries.

Stratton, A.J., SAS Institute Inc., 2009. Systems and methods for costing reciprocal relationships. U.S. Patent 7,634,431.

Weygandt, J. J., Kimmel, P. D., & Kieso, D. E. (2015). Financial & Managerial Accounting. John Wiley & Sons.

WordPress. (2018). Spreadsheet concepts. (Online). Retrieved on 8^th April 2018 from https://spreadsheetconcepts.wordpress.com/advantages-and-disadvantages/.