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Today, I will answer a very important question that many accountants ask what the steps for creating an accounting system are ? Or how do I build an accounting system properly?

Let us agree at the outset that whatever the cost accounting system you follow and whatever type of product you produce, the cost of the product you own will not consist of more than 3 elements, which are direct materials, direct wages and other industrial costs.

Whether the manufacturing system is based on the production orders system, or the production stages system, we will find that the production activity in general, and whether your job is a manual or a manufacturing accounting program

The wage of workers is one of the most important factors involved in the cost of the product and has a great influence in determining the prices of the products

Productivity stage system is the suitable system in case the product that passes through the stages of production or different stages or sections, such as factories that produce notebooks

What are the accounts that I am supposed to have in order to be able to properly guide of wages  entry in an accounting manner?

What is the correct accounting guidance for the wages component or what is the accounting wages entry to prove the wages expense?

Accounting treatment of the installment sales system, gross profit method In principle, we must know that revenue is a very important element of the income statement, on the basis of which critical decisions are taken by the parties concerned with the company,

In principle, we must know an important point that allocations are specific to liabilities, whether they are related to short-term or long-term liabilities, but ......

To complete the list of cash flows; as we took in the previous episode of the list of cash flows,we will now talk in this episode in more detail. Let's start with the indirect method

Disclosures of allocations , liabilities and potential assets  in the financial position , There must be disclosures of the allocations in the financial position . Allocations are included in the liabilities according to their types . The short term liability will be adjusted in a year , but the long term liabilities are adjusted in more than one year . They are listed in the income statement and  in the cash flow statement as explained before .

This is the uncovered part of the guarantee letter , that is as a company you presented a letter of guarantee from another company and you have facilities of a bank guarantee letter for example with the value of one million pounds . 

In part 2 we explained the net   earnings before tax  adjustments using the indirect method . In a CFO statement  the final number is the same if we used either methods ( the direct or indirect ) as the difference lies in the way of displaying the statement . In this article we are going to explain practically each term of the CFO statement .

Egyptian criterionNo. 31modifited in 2015, and International criterion No. 36 .A very important criterion used very widely in our practice life ,The asset impairment criterion can not be apply to some other assets

In the previous article we explained the decline standard of assets value and discussed all the included concepts . Now we will give examples of asset decline .

In this part we are going to discuss cash flow statements from investing activities

The direct method is used in the company to be easily displayed and read by decision makers. As we clarified the difference between the direct 

In the previous episode we concluded the first part of the practical example on the cash flow list and in today's episode here we take the operational activity items

Provision for doubtful debts or depreciation of customers, which will be included in most financial statements

There are financial rats for the customer account system such as the customer turnover rate, the average collection period, and these ratios have a role in that through which the performance of clients is evaluated

Factoring companies are companies that buy debts from their owners and collect them in exchange for a percentage. In other words, companies need cash to meet their operational needs ………….

Large companies and factories have agents or distributors who sell the goods in return for receiving a commission from the company when selling, and also the company incurs other expenses …

It is the return that the company must achieve to meet the required rate of return by the company's shareholders, taking into account that there are liabilities to the other parties ……

The income statement has a set of objectives, including that it presents the financial results of a business over the fiscal period and determines reasons for the increase or decrease the profits and losses

Presentation of Financial Statements means how to present, organize, classify, and group items in the financial statements, as well as the notes to the financial statements

In practical reality after the end of the year or even after the balance sheet date, there may be some events after the reporting period: an event, which could be favorable or unfavorable