Chapter 1. Accounting Manuals


Ask a dozen accountants to name the major method of communicating in their accounting operations and they will probably describe the accounting manual. However, you will get 12 answers about what the manual is, varying from a simple listing of account names and numbers to an academic treatise of the philosophy and practice of accounting as used in that particular environment.

In its simplest form, the accounting manual documents the meaning of sets of descriptive numbers used in an organized manner to record, summarize, and report information. It may contain descriptions of one or more of the systems and procedures that explain the basic accounting structure of the enterprise.

However, the manual can be much more than numbers and definitions. It may contain organization charts to show responsibility and lines of authority, policy, formulas, clerical procedures, special industry terminology, data processing rules and procedures, forms descriptions and uses, and so on. It is the general map through which one can learn to travel through a company’s operations.

Every business enterprise has an accounting system, from the self-employed person operating a small business out of his or her home to charitable, not-for-profit organizations, educational institutions, governmental agencies, industrial and service companies, and so on. The system may be completely undocumented, possibly just a checkbook and a list of receipts, or it may be an elaborate, ...

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