Xplantr Bangladesh

Xplantr Ltd. Is an IT service provider that forms

strategic partnerships with industry-leading
technology vendors to deliver enterprise level
business solutions and system integration service.
It is a partnership basis company owned by two
person. The company follows the accrual basis
accounting system for account related purposes.
The company follows the 5 basic principles of
GAAP (Generally accepted accounting principles)
as follows-

 Revenue Recognition Principle

Revenue being recognized in the income
statement

 Historical Cost Principle

Records the prices of assets in accounting
records at the price paid to acquire it at the
time of its acquisition.
  Matching Principle
They match the expenses incurred in an
accounting period with the revenues
recognized in that particular period.

 Full Discloser Principle

The company reveals all relevant information
about the company’s account related
activities and operations to creditors and
investors in the financial statement.

How Accountants play their role

Accountants play a crucial role in an organization.
The responsibilities and duties differ from a variety
of ranges in organization to organization. In
Xplantr an accountant plays roles which are
defined below-
Maintenance of books of account

Internal audits

Budgeting
Taxation

Investigation

Management advisory services

 Maintenance of books of accounts
The accountant maintains the systematic
records of financial statements to calculate
net profit or loss for an accounting period.

 Management advisory services

The accountant provides advices regarding
the business operations and discuss long-
term plans of Xplantr.

 Internal Audits
Accountants ensure that all the accounting
transactions related to respective year are
recorded, summarized in accordance with the
accounting policies.

 Budgeting
Preparing budget is an important task of an
accountant. They help to prepare annual
budget and plans to balance their incomes
and expenses.
 Taxation
Another very crucial role of the accountant is
to plan tax liabilities of an entity and manages
the tax matters and provide tax planning
advices.

 Investigation
Investigate if any monetary theft occurs in the
company and also finds errors in different
transactions.
 Analysis of business transactions:
The accounting process starts with the analysis of
business transactions. For example, purchases, sales,
payments, and receipts of cash are all business
transactions. The accountant analyzes each business
transaction to decide what information to record and
where to record it. Business transactions for the month of
January of Xplantr are given below:

1. Cash sell of software worth 100000 taka to Pran.

2. Sold gym software to Paradise Group worth 265000
on credit.
3. Purchased 3 pieces of laptops costing 90000 taka.
4. Purchased computer server worth 185000 taka.
5. Renewed trade license with 8500 taka.
6. Spent 5000 taka on basis member renewal.
7. Purchased conference table with 40000 taka.
8. Paid the auditor of the company 80000 taka.
9. Vat paid on office rent 3000 taka.
 10. Salary and wages expense for the month of
January 230000 taka.
11. Purchased supplies on account – 10500 taka.

The transactions are analyzed in the table below:

Assets Liabilities Owner's equity

cash Accounts Receivable Supplies Equipments Accounts Payable owner's capital Owner's Drawings Revenue Expense
100000 100000
265000 265000
-90000 90000
-185000 185000
-8500 8500
-5000 5000
-40000 40000
-80000 80000
-3000 3000
-230000 230000
10500 10500
-541500 265000 10500 315000 10500 365000 326500
-541500 590500 38500
49000 49000
The Recording Process Of Xplantr
The company do the recordings in order to maintain
their financial statement. The recording process of
Xplantr involves different steps to create or maintain a
perfect and proper account. They follow three basic
steps for recording process and they are-

JOURNALIZING

LEDGER

POSTING
JOURNALIZING
o A basic process for recording any kind of business
transactions in the accounting records also known
as bookkeeping system.
1. Xplantr identifies each business transactions to
determine the nature of the transaction through
journalizing. For example, the receipt of a
supplier invoice means that an obligation has
been incurred.
2. They use the journal to determine which
accounts will be affected. Basically identifies
which accounts will go on credit accounts and
which will go on debit accounts.
An example of journalizing process of Xplantr is
that Xplantr purchase office equipment for
60,000 Tk cash in September. Here the
equipment must be recorded in debit account
as it increases the asset of the company and
cash amount will be in credit account as asset
like cash decreases here.
LEDGER
After journalizing for listing of all general accounts in
the accounting system chart of accounts Xplantr
prepares general ledger. This ledger helps the
company to see the details of specific transactions like
Cash, Accounts Receivable, Revenue etc.

An example of General Ledger shows below

POSTING
When the company completed the general journal and
shifted the journal to general ledger which is generally
transferring the general journal to the ledger account
and ledger account to the trial balance and then to
income statement, owner’s equity to balance sheet.
Xplantr uses the following steps in their accounting
process:

BEGINNING OF THE
PERIOD PROCESSING

IDENTIFYING INDIVIDUAL
TRANSACTIONS

PERIOD END PROCESSING

Beginning of Period Processing:

At the beginning period of processing Xplantr

verifies that all transactions of reversed entries have
been reversed as the company follows the accrual
basis of accounting. This is done so that companies
can close temporary accounts. In this way, they
ensure that transactions are not recorded twice.

Identifying individual transactions:

1)At first, they identify the transactions and

determine the kind of transactions that take place
such as- purchasing goods from suppliers, selling
software to customers, payment of employees etc.

2)Prepare documents to initiate transactions. For

example- receiving invoice from suppliers or
sending invoice to customers.

3)Identify proper accounts under which the business

transactions will be recorded.
 4)At last, the recorded transactions are entered into
the accounting system.

Xplantr uses these 4 steps to record their individual

business transactions in their accounting process.
Period End Processing:

At the end of the accounting period, Xplantr takes the

following accounting steps-

1)Prepare Trial Balance: A trial balance is a list of

accounts and their balances at a given time.
Companies prepare a trial balance at the end of
their accounting period. It proves the mathematical
equality of debits and credits after posting. This
step is very useful in the preparation of financial
statements.

2)Adjust the Trial Balance: Adjusting the trial

balance is necessary since it may not contain up to
date or complete data. If there are any errors in the
trial balance, they should be adjusted accordingly.

3)Preparing adjusted trial balance: After a

company has journalized and posted all adjusting
entries, another trial balance is prepared called the
adjusted trial balance. It shows balances of all
accounts including the adjusted ones as well. Its
 purpose is to prove the equality of total debit and
total credit balances after adjusting.

4)Preparing financial statements: Financial

statements are made from the adjusted trial
balances. This includes the income statement,
owner’s equity statement and balance sheet.

5)Closing entries: After preparing the financial

statements, companies transfer the temporary
account balances i.e. revenues, expenses and
drawings account to the permanent accounts which
are owner’s equity account, owner’s capital by
means of closing balance. During this process, the
balances of expenses and revenue accounts are
transferred to income summary. And owner’s
drawings are transferred to owner’s capital, which
is later transferred to income summary. This
process produces a zero balance in each temporary
account.

6)Preparing Post Closing Trial Balance: After

closing entries, a post-closing trial balance is
prepared to prove the equality of the permanent
account balances. Since all temporary accounts will
net to zero, it will only show the final balances of
the balance sheet accounts, that is, balance of the
permanent accounts.
USERS OF ACCOUNTS INFORMATION

INTERNA EXTERNAL
L USERS USERS
-Owners -Govt. Regulatory
-Managers Agencies
-Internal -Investors
Departments -External Auditors
-Internal Auditors -International
standardization
agencies
INTERNAL USERS
 Owners: Uses accounts information to
control monetary units of the organization
 Managers: For making decisions for annual
budget and other managerial activities
 Internal Departments: The HR department
uses accounts data to maintain salaries and
wages of employees. The finance
department uses accounts information
 Internal Auditors: Uses accounting
information to operate internal audits like
management audits.
EXTERNAL USERS
 Govt. Regulatory Agencies: The tax
department uses accounts information of the
organization

 Investors: PRAN, ESKIMI who are the investors

of Xplantr uses the accounts information to
know the current financial situation of the
organization

 International Standardization Agencies:

International Accounting Standards
Committee or IASC investigate if the
organization is following accurate rules or not
for making accounts information.
Difference between class work and assignment
work.
Organization's
transactions are
complicated than our class
work

In Xplantr the accounting

process is more wider

The company makes accounts

information in a faster way with
less errors as it uses different
softwares.