- Policy system classification
- 1- Entrance policies
- 2- Exit policies
- 3- Daily policies
- Resulting documents
- Checking balance
- Diary book
- Ledger
- Auxiliary books
- Advantages of using the policy system
- References
A policy system is an accounting system in which data is recorded manually or automatically. This system is characterized by the development of a policy for each transaction or operation.
Policies are the result of the evolution of manual registration systems. Its name comes from the American technicality voucher that means voucher.
They are internal documents in which the operations are individually recorded and the respective supports are incorporated.
With the policy system, the daily book or continental book retains its format both in terms of characteristics and data.
Upon completion of the registration of all operations, the total of the policy columns is generated, a concentration entry is recorded in the general newspaper and later in the major.
Policy system classification
Policies in general contain data such as date, number, name and coding of each account, their amounts, their description and the people who carry them out and authorize them.
There are 3 main types of policies:
1- Entrance policies
Income is the increase in the assets of an entity or the decrease in its liabilities during an accounting period, with a positive impact on profit and accounting equity.
These policies are used to record income and total operations that are linked to the inflow of money.
An example of this is cash charges and customer charges for the sale of products or services.
2- Exit policies
Expenses are the decreases in assets or the increase in liabilities of an entity during an accounting period, having a negative impact on the profit and the accounting equity.
Expenditure policies are used to record expenditures and all operations that involve the outflow of money, such as payments to cash and payments or business expenses.
3- Daily policies
They are used when there is no entry or exit of money, but virtual operations. For example, purchases or sales on credit and the recording of depreciation and amortization.
Resulting documents
The following documents result from the integration of the information recorded in the policies:
Checking balance
This document is an accounting statement that is regularly formulated at the end of each month.
It allows checking that all charges or expenses are equal to all payments or income reflected in the books during the corresponding period.
Diary book
It is the document in which all the transactions carried out by the entity are recorded chronologically.
It is the main accounting record of all the accounting systems that exist.
Ledger
This document summarizes the transactions recorded in the journal, condensing their movements and balance.
Auxiliary books
They reflect separately each of the accounts, their credits, their charges and their final balance.
Advantages of using the policy system
- Registration is done quickly.
- Allows optimization of work by virtue of the fact that different people can work simultaneously on the records.
- Strengthens internal control processes because, for the registration of each policy, there must be the review or authorization of a person specially designated for this purpose.
References
- Campos C. (2010). Accounting Systems Case Study. In: brd.unid.edu.mx
- Gallardo, B. (nd). Accounting Practices. Retrieved on December 8, 2017 from: fcasua.contad.unam.mx
- Guerrero, J. (2014). Accounting 2. In: editorialpatria.com.mx
- Picazo, G. (2012). Accounting process. In: aliat.org.mx
- Electronic Accounting Systems. Retrieved on December 8, 2017 from: courses.aiu.edu