Topic 4 – Financial reporting infrastructure

Study Unit 12: Finance and Investment cycle

Study Unit 12: Finance and investment cycle - page  91

 

At some stage or other, all organisations will require money to finance normal business operations or expansion of operations. Successful organisations will generate enough money to enable them to invest and thereby generate further profits.

 

2 Investments  - page 91

 

Investment source documents

 

  • The source documents that are used will be based on the type of investment vehicle.
  • You should always remember to use the applicable source document to record the transaction in the AIS and not only the bank statement.
  • The actual source document contains information required for the accurate accounting of the transaction and the purpose of the bank statement is only to reconcile the bank account.

 

Investment AIS reports

 

  • The general ledger accounts details report shows the accounting entries for the applicable gl accounts.
  • This gl listing will be used to reconcile the general ledger with the investment and fixed asset registers

 

3 Finance  - page 93

 

Finance source documents

 

  • The source documents used will be based on the type of finance obtained.
  • As with investments, it is also necessary for finance transactions to use the applicable source document to record the transaction in the AIS and not only the bank statement. This is because the source document may contain information required for the accurate accounting of the transaction.

 

- Provide two (2) types of source documents

 

  • Loan agreements
  • Minutes of meetings

 

Finance AIS reports

 

The general ledger accounts details report shows the accounting entries for the applicable gl accounts.

These listings should be used to perform reconciliations with third-party statements (eg a loan statement).

Study Unit 13: Financial reporting structure (Prev Lesson)
(Next Lesson) Study Unit 11: Payroll and Personnel cycle
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