Data processing: financial – business practice – management – or co – Automated electrical financial or business practice or... – Accounting
Reexamination Certificate
1999-10-19
2001-12-11
Rice, Kenneth R. (Department: 2167)
Data processing: financial, business practice, management, or co
Automated electrical financial or business practice or...
Accounting
Reexamination Certificate
active
06330545
ABSTRACT:
BACKGROUND OF THE INVENTION
(a) Field of the Invention
The present invention relates to an accounting method and system, and more particularly, to an activity information accounting method and system in which accounting reports can be prepared by simply inputting business activity information such that complicated recording procedures can be avoided.
(b) Description of the Related Art
Various accounting methods are used to keep track of the business activities of a company, and to ultimately allow managers, stockholders, etc. of a company to conduct business analyses. In conventional accounting methods, after a business transaction is performed, the transaction is categorized and typical bookkeeping is performed to record the transaction.
FIG. 1
shows a flow chart of a conventional accounting method. As shown in the drawing, after a business activity is performed in step S
10
, it is determined if the business activity falls under the category of a commercial transaction requiring recording through book-keeping methods in step S
20
. If it is not (for example various internal activities), no additional procedures are performed. However, if it is determined in step S
20
that the business activity is a commercial transaction, the business activity is divided into debits and credits, then the debits and credits are classified into specific journal entries in step S
30
. In step S
30
, classification into specific journal entries refers to matching the debits and credits of business activities with one of approximately
300
account titles. For example, debits include such account titles as a reduction in assets, increase in debt decrease in capital, and increase in expense, etc.; while credits include account titles such as an increase in assets, decrease in debt, increase in capital, and increase in revenue, etc.
Subsequently, a daily trial balance sheet is prepared in step S
40
. The daily trial balance sheet aids in ensuring that accumulated debits and credits correspond. That is, accounting mistakes can be discovered more easily by preparing daily trial balance sheets rather than waiting after a more significant time has elapsed. Next, a trial balance sheet is prepared in step S
50
. The trial balance sheet covers a longer period of, for example, one month. Finally, in step S
60
, financial statements are prepared on the basis of the trial balance sheets. The financial statements typically includes a balance sheet for a year period, an income statement, and other such documents in which information is organized into a specified format.
In the process of classifying the debits and credits into specific journal entries of step S
30
above, those performing the accounting procedures must be familiar with all the roughly
300
account titles. Further, even if the financial statements sheet is prepared using a personal computer or other such data processing system, the user must nevertheless know the large number of account titles in addition to the codes corresponding to the account titles. For this reason and the fact that many other concepts, rules, etc. must be known, the conventional accounting process can only be performed by professionals.
Resulting from this fact that only trained professionals can perform accounting procedures when using conventional accounting methods, there exists a considerable lag between the time of undertaking a business activity and accounting of the same. That is, it is not possible to perform accounting procedures immediately as business activities occur since information pertaining to the business activities are first reported to an accountant or accounting department, after which accountants perform the task of recording the information.
In addition, using conventional accounting methods, business activities not failing under one of the designated specific journal entries are not reflected in the financial statements. Further, the results of accounting processes can only be known through the financial statements, which include the balance sheet and the income statement. Accordingly, merely the asset situation of the company (e.g., the cash balance), and the profit or loss for a period of time can be known, while such important measures as cash flow can not be known using these documents.
In more detail, with conventional accounting methods, profits and losses for varying lengths of time are determined through the income statement, with the amount of profit or loss is considered one of the most important measures of company performance. However, since profits and losses are calculated on the basis of returns for a company, not only can cash flow not be determined, but other measures reflecting the performance of company are not well reflected. Accordingly, complicated procedures must be used to prepare various other documents including a cash flow statement.
Finally, since only business activities determined to be commercial transactions are recorded when using conventional accounting methods, internal business activities are not reflected in the accounting reports. An example of such an internal business activity is the use of specific number of kilowatts of electricity by a department A to manufacture product B. Because these internal activities are not reflected in documents derived from conventional accounting methods, performance by department, etc. can not be known.
SUMMARY OF THE INVENTION
The present invention has been made in an effort to solve the above problems.
It is an object of the present invention to provide an accounting method and system in which those not trained in the field of accounting are also able to prepare accounting reports by simply inputting business activity information, without having to undergo the complicated process of making journal entries.
It is another object of the present invention to provide an accounting method and system in which not only balance sheet and income statements can be prepared, but which also enables the preparation of cash flow statement and other accounting reports that provide different measures of overall company worth and performance.
It is still another object of the present invention to provide an accounting method and system in which suitable analyses and accounting reports can be prepared using information of predetermined business activities not falling under the category of commercial transactions.
The accounting method according to one aspect of the present invention uses a data processing system that stores an account title table corresponding to activity information, and performs accounting procedures on the basis of an input activity information and an account title corresponding to the input activity information.
The accounting method comprises the steps of: (a) displaying activity types including purchase and acquisition activity, sales and revenue activity, expenditure activity, investment and finance activity, and production activity; (b) receiving a user selection of one of the displayed activity types; (c) displaying a screen for the user to input activity information for the selected activity type; and (d) determining if the input activity information is internal activity or external activity, and performing accounting procedures on the basis of determined result and the account title table.
The accounting system according to one aspect of the present invention comprises a memory unit that stores an account title table corresponding to activity information, accounting program for performing accounting procedures on the basis of an input activity information and an account title corresponding to the input activity information, and an accounting result; an output unit which outputs activity types including purchase and acquisition activity, sales and revenue activity, expenditure activity, investment and finance activity, and production activity for user to select one of the activity types, and outputs a screen for inputting activity information for the selected activity type; and a central processing unit (CPU) that determines if the input activity information is in
Eastern Consulting Company, Ltd.
Finnegan Henderson Farabow Garrett&Dunner L.L.P.
Rice Kenneth R.
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