Acca f3 Financial Accounting (int) Study Text

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If you are not already using one, get some experience between now and the exam, of using an accounting 

package.

One of the competences you require to fulfil performance objective 6 of the PER is the ability to use 

standard software packages including work processing and spreadsheet applications. You can apply the 

knowledge you obtain from this section of the text to help to demonstrate this competence. 

1.4 Modules 

A

module is a program which deals with one particular part of a business accounting system. 

An accounting package will consist of several modules. A simple accounting package might consist of 

only one module (in which case it is called a stand-alone module), but more often it will consist of several 

modules. The name given to a set of several modules is a 

suite. An accounting package, therefore, might 

have separate modules for some or all of the following. 

(a) Invoicing 

(b) Inventory 

(c) Receivables 

ledger 

(d) Payables 

ledger 

(e) Nominal 

ledger 

(f) Payroll 

(g) Cash 

book 

(h) Job 

costing 

(i) 

Non-current asset register 

(j) Report 

generator 

1.5 Integrated software 

Each module may be integrated with the others, so that data entered in one module will be passed 

automatically or by simple operator request through into any other module where the data is of some 

relevance. For example, if there is an input into the invoicing module authorising the despatch of an 

invoice to a customer, there might be 

automatic links:

(a) 

To the sales ledger, to update the file by posting the invoice to the customer's account. 

(b) 

To the inventory module, to update the inventory file by:  

(i) 

reducing the quantity and value of inventory in hand 

(ii) 

recording the inventory movement 

(c) 

To the nominal ledger, to update the file by posting the sale to the sales account. 

(d) 

To the job costing module, to record the sales value of the job on the job cost file. 

(e) 

To the report generator, to update the sales analysis and sales totals which are on file and awaiting 

inclusion in management reports. 

Important!

Key term 

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A diagram of an 

integrated accounting system is given below. 

1.5.1 Advantages 

(a) 

It becomes possible to make just one entry in one of the ledgers which automatically updates the 

others. 

(b) 

Users can specify reports, and the software will automatically extract the required data from all the 

relevant files. 

(c) 

Both of the above simplify the workload of the user, and the irritating need to constantly load and 

unload disks is eliminated. 

1.5.2 Disadvantages 

(a) 

Usually, it requires more computer memory than separate (stand-alone) systems – which means 

there is less space in which to store actual data. 

(b) 

Because one program is expected to do everything, the user may find that an integrated package 

has fewer facilities than a set of specialised modules. In effect, an integrated package could be 

'Jack of all trades but master of none'. 

2 Accounting modules 

An accountancy package consists of a number of 

modules which perform all the tasks needed to

maintain a normal accounting function like payables ledger or payroll. In modern systems the modules

are usually integrated with each other. 

In this section we shall look at some of the accounting modules in more detail, starting with the 

receivables ledger. 

2.1 Accounting for trade accounts receivable 

A computerised receivables ledger will be expected to keep the receivables ledger up-to-date, and also it 

should be able to produce certain output (eg statements, sales analysis reports, responses to file 

interrogations etc). The output might be produced daily (eg day book listings), monthly (eg statements), 

quarterly (eg sales analysis reports) or periodically (eg responses to file interrogations, or customer name 

and address lists printed on adhesive labels for despatching circulars or price lists). 

FAST FORWARD

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2.1.1 Inputs to a receivables ledger system 

Bearing in mind what we expect to find in a receivables ledger, we can say that typical data input into 

receivables ledger system is as follows. 

(a)

Amendments

(i) 

Amendments to customer details, eg change of address, change of credit limit 

(ii) 

Insertion of new customers 

(iii) 

Deletion of old 'non-active' customers 

(b)

 

Transaction data relating to:

(i) 

Sales transactions, for invoicing 

(ii) Customer 

payments 

(iii) Credit 

notes 

(iv) 

Adjustments (debit or credit items) 

2.1.2 Outputs from a receivables ledger system 

Typical outputs in a computerised receivables ledger are as follows. 

(a)

Day book listing. A list of all transactions posted each day. This provides an audit trail – ie it is 

information which the auditors of the business can use when carrying out their work. Batch and 

control totals will be included in the listing. 

(b)

Invoices (if the package is one which is expected to produce invoices.) 

(c)

Statements. End of month statements for customers. 

(d)

Aged accounts receivable list. Probably produced monthly. 

(e)

Sales analysis reports. These will analyse sales according to the sales analysis codes on the 

receivables ledger file. 

(f)

Reminder letters. Letters can be produced automatically to chase late payers when the due date 

for payment goes by without payment having been received. 

(g)

Customer lists (or perhaps a selective list). The list might be printed on to adhesive labels, for 

sending out customer letters or marketing material. 

(h)

Responses to enquiries, perhaps output on to a VDU screen rather than as printed copy, for fast 

response to customer enquiries. 

(i)

Output onto disk file for other modules – eg to the inventory control module and the nominal 

ledger module, if these are also used by the organisation, and the package is not an integrated one. 

2.1.3 The advantages of a computerised trade accounts receivable system 

The advantages of such a system, in addition to the advantages of computerised accounting generally, are 

its ability to assist in sales administration and marketing by means of outputs such as those listed above. 

2.2 Payables ledger 

A computerised payables ledger will certainly be expected to keep the payables ledger up-to-date, and also 

it should be able to output various reports requested by the user. In fact, a computerised payables ledger 

is much the same as a computerised receivables ledger, except that it is a sort of mirror image as it deals 

with purchases rather than sales. 

Question 

Payables ledger 

What sort of data would you expect to be held on a payables ledger file? 

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