Accounting Policies and Procedures Manual

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Accounting Policies and Procedures Manual

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Accounting Policies and Procedures Manual

Table of Contents

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Accounting Policies and Procedures Manual

1
1.1
1.2
1.3
1.4
1.5
1.6

Introduction
The Organisation
Structure of the Finance Function
Objectives of the manual
Accounting framework
Update of this manual
Responsibility of User Staf

3
3
3
3
4
4
4

2
2.1
2.2
2.3
2.4
2.5
2.6
2.6.1
2.6.2
2.6.3
2.6.4
2.6.5
2.6.6
2.6.7
2.6.8
2.7

The Accounting System

What is it?
Underlying assumptions
Attributes of useful financial information
Basis of Preparation refuse
Accounting policies
Gathering, classifying & recording transactions
Filing system
Transactions recording
Elements of double entry system
Recognition criteria
Structure of accounts
Tool for recording
Source documents
Transactions and its accounting treatment
Presentation of financial statements

6
6
6
6
6
5
10
10
11
12
12
12
14
14
15
18

3
3.1
3.2
3.3

Budgeting
Responsibility for budget preparation
Budget cycle
Authorization and Approval Limits & Procedures

19
19
19
20

4
4.1
4.1.1
4.1.2
4.1.3
4.1.4
4.1.5
4.1.6
4.1.7
4.2
4.2.1
4.2.2
4.2.3

General financial transactions

Cash & Bank
Receipts
Payments
Preparation of Cheques
Cheque Signatories
Bank Reconciliation Statement
Cheque Book Register
Controls and Checks
Petty Cash
General Procedures
Petty Cash Controls and Checks
Payments from Petty Cash

22
22
22
22
23
23
23
23
23
24
24
25
25

5
6.1
6.2
6.3
6.4
6.5

Employee Records
Preparation of Payroll
Payment of Salaries
Payroll Controls
Statutory Returns

27
27
28
28
29

7
7.1
7.1.1
7.1.2

Local Purchases and Recording

Purchasing Function
Duties of Purchasing Officer
Purchase Requisition

30
30
30
30
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Accounting Policies and Procedures Manual

7.1.3
7.1.4

Local Purchase Order (LPO)

Goods Received Note (GRN)

30
30

8
8.1
8.2
8.3
8.4
8.4.1
8.5

Inventory Control
Introduction
Store Records
Issuing Procedures
Stock Control
Features
Physical Stock Taking Procedures

31
31
31
31
31
31
32

9
9.1

Accounts Receivable, Prepayment and Deposits

Introduction

33
33

10
10.1
10.2
10.3
10.3.1
10.3.2

Capital Expenditure and Fixed Assets

Introduction
Management of Fixed Assets
Fixed Assets Register
Recording Fixed Asset Purchases
Disposal of Fixed Assets

34
34
34
35
35
35

11
11.1
11.2

Management Information System

Introduction
Reports

36
36
36

12

Chart of Accounts

38

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Accounting Policies and Procedures Manual

10 Introduction

10.1 The Organisation

<company> was incorporated on April 13, 2000 and commenced business on
April 13, 2000. <company>operates a simple management structure with the
Board of Director at the Apex followed by the Chief Executive Officer/Managing
Director, the General Manager then the functional managers.
10.2 Structure of the Finance Function
The Financial Management of <company> will be the responsibility of the Board,
Managing Director, and finance department in the institution. Financial
Management functions will include1:
PlanningBusiness planning, budgeting, forecasting and capital
Budgeting
Controlaccounting,
financial
and
compliance
reporting,
procurement
and
general
financial administration such as payroll and financial analysis
Treasuryasset liability management, capital adequacy management,
and
funding
and
investment activities
Investor relationscommunications with shareholders and other
stakeholders,
such
as
the annual report and annual meeting
1.2.1
The Board
The Board usually delegates the responsibilities of financial management to
the finance committee/Asset and Liability Committee. The responsibilities of the
Board will include:
Developing the business plan

Reviewing and approving annual budgets

Reviewing and approving operational plans

Monitoring the overall financial performance of the company quarterly

Review expenditure and revenue every quarter

Ensuring that there is adequate fund

Ensuring that there is clear policy on investment of excess cash

Exploring alternative sources of capital

Design a management assessment and accountability review system

with clear objectives and benchmarks that the CEO and management can
be held accountable
Review and approve all contracts for goods and services that will exceed
over the year.

1.2.3.

The Chief Executive Officer

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Monitoring the financial performance of the institution and reporting to the

Board
Reviewing the annual budget to be presented to the Board
Establishing long, medium and short-term operating and financial
objectives
Selecting the most viable projects for capital expenditure and seeking
Board approval
Ensuring compliance in financial reporting and timely submission of reports
to the regulator
Together with the Management staf develop operational plan to be
approved by the
Board
Reviews and approves all financial reports to be presented to the Board
Reviews all vouchers and invoices for those checks which require his or her
signature.
Approves all reimbursements.

1.2.4 Finance Manager

With the Accountant, and input from the CEO and Operations manager,
develops
the annual budget.
Preparing financial reports to be submitted to the regulator timely

Reviews and approves all financial reports.

Reviews and approves list of pending check disbursements.

Reviews all vouchers and invoices for those checks which require his or her
signature.
Authorizes all inter fund transfers.

Reviews all bank reconciliations.

Reviews the payroll summary for the correct payee, hours worked and
check amount.
Manages the assets accounts.

1.2.5
Accountant(s)
Processes all receipts and disbursements.

Processes the payroll, including payroll tax returns.

Submits requests for interfund transfers.

Maintains and reconciles the general ledger monthly.

With the finance manager, and with input from the CEO and Department
managers, develops the annual budget.
Prepares all financial reports, including requests for reimbursements.

Manages the petty cash fund.

Reconciles the bank accounts.

Reconciles the statement of credit card deposits and service charges.

Double check all reimbursement requests against receipts provided.

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1.3 Objectives
This document is designed as a guide to:
Ensure planning, organizing and directing detailed finance activities.
Describe the standard <company> accounting procedures and financial
management practices.
Serve as a reference material to be used by staf and other external
agencies like the auditors in understanding the system as a whole.
Use as a tool to train the accounting staf in the operation of the system.

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1.4 Accounting framework

This manual has been prepared in reference to laws, standards and best practice
guideline for accounts preparation. These are:
Companies Act, 1963 (Act 179)
International Financial Reporting Standard (IFRS)
1
Update of this manual
The update of the manual is the responsibility of the Finance committee and
approved by the board. The committee must ensure that:
The manual is kept up-to-date
The manual continues to set out the procedure that must be followed in
the operation of the system and procedures
Sufficient copies of manuals are available
Amendments to the manual are properly authorized and communicated to
concerned parties immediately.
It is envisaged that, it may be necessary to amend the manual every year to
accommodate any changes. The finance manager must ensure that there is a list
of all the persons to whom the manual has been issued so as to ensure that the
amendments issued are completed promptly.
Each amendment to the procedures manual must be given a unique code and
dated; the finance manager is responsible for ensuring that each procedure
issued has been properly amended.
1.6 Responsibilities of user staf
All personnel with a role in the management of <company> financial operations
are expected to uphold the policies in this manual. It is the intention of
<company> that this accounting manual serves as our commitment to proper,
accurate financial management and reporting.

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11 The Accounting System

10.3 What is it?
This refers to the procedures, policies, standards and methods adopted in
gathering, classifying, recording, presenting and disclosing business events and
transactions. The accounting system includes the formal records and original
source data.

10.4 Underlying assumptions

Accrual basis: transactions and other events are recognised when they
occur (not when the cash flows). These efects are recorded in the period
which they relate.
Going concern: it is assumed that the <company> will continue to operate
for the foreseeable future.

10.5 Attributes of useful financial information

The four principal qualitative characteristics are understandability, relevance,
reliability and comparability. The department in discharging their obligation
should maintain a balance or trade-of, between qualitative characteristics.
10.6 Basis of Accounting
Financial statements which is the report generated by the accounting system are
prepared on the historical cost basis, except where otherwise stated or disclosed.
Assets shall be re-valued from their historic cost to reflect current values as
necessary
10.7 Accounting policies
These are the principles, rules and procedures selected, and consistently
followed, by the management of <company> in preparing and reporting
the financial statements. The specific policies adopted in accordance with IFRS
are:
Inventories
These shall be measured at the lower of cost and net realisable value.
The cost of inventories shall comprise all costs of purchase, costs of
conversion and other costs incurred in bringing the inventories to their
present location and condition. The cost of inventories shall be assigned by
using the first-in, first-out (FIFO).
Corporate taxes
Current tax is the expected tax payable on the taxable income for the year,
using tax rates enacted or substantively enacted at the balance sheet date
and any adjustment to tax payable in respect of previous years.
<company> provides for income taxes at the current tax rates on the
taxable profits.
Deferred tax is provided in full using the balance sheet method on
temporary diferences between the tax bases of assets and liabilities and
their carrying values for financial reporting purposes.
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Deferred tax is measured at the tax rates that are expected to be applied to
the temporary diferences when they reverse, based on law that has been
enacted or substantively enacted by the reporting date.
Property, plant & equipment
Items of property, plant and equipment are measured at cost less
accumulated depreciation and impairment losses. Cost includes
expenditures that are directly attributable to the acquisition of the asset.
Subsequent costs are included in the asset's carrying amount or recognised
as a separate asset, as appropriate, only when it is probable that future
economic benefits associated with the item will flow to the company
(<company>) and the cost can be measured reliably. All other repairs and
maintenance are charged to the income statement during the financial
period in which they are incurred.
An impairment loss is recognised if the carrying amount of an asset exceeds
its recoverable amount. The recoverable amount of an asset is the greater
of its value in use and fair value less cost to sell. Impairment losses are
recognised in the Income Statement.
Depreciation is recognised in the income statement on a straight line basis
over the estimated useful lives of each part of an item of property, plant and
equipment. Land is not depreciated.
The current annual depreciation rates for each class of property, plant and
equipment are as follows:
Building
10%
Motor Vehicle
20%
Office Equipment
20%
Computer & Accessories
33.33%
Furniture, Fittings
20%
Depreciation methods, residual values and useful lives are reassessed at
each financial year. Gains and losses on disposal of property, plant and
equipment are included in the income statement.
Improvements to Leasehold Properties
Material improvement in lease hold properties are capitalized and
depreciated over the length of the lease term or the estimated life of the
improvements, whichever is lower.
Operating leases
Leases of assets under which the lessor efectively retains all the risks and
benefits of ownership are classified as operating leases. Rentals payable or
receivable under operating leases are recognized in the income statement
on a straight-line basis over the terms of relevant lease.
Impairment of non-financial assets

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Assets that have an indefinite useful life are not subject to amortization and
are tested annually for impairment and whenever changes in circumstance
indicate that the carrying amount may not be recoverable.
Assets that are subject to amortization are tested for impairment whenever
events or changes in circumstances indicate that the carrying amount may
not be recoverable.
An impairment loss is recognized for the amount by which the assets
carrying amounts exceeds its recoverable amount. The recoverable amount
is the higher of an assets fair value less cost to sell and value in use.
Recognition of assets and liabilities
Assets are recognized if it is probable that future economic associated with
the asset will flow to the company and the cost of fair value can be
measured reliably.
Liabilities are recognized if it is probable that an outflow of resources
embodying economic benefits will result from the settlement of the present
obligation and the amount at which the settlement will take place can be
reliably measured.
Derecognition of assets and liabilities
A financial asset is derecognized where the contractual rights to receive
cash flows from the assets have been transferred or have expired or when
substantially all the risks and rewards of ownership have passed. All other
assets are derecognized on disposal or when no future economic benefits
are expected from their use.
A financial liability is derecognized when the relevant obligation has either
been discharged or cancelled or has expired.
Foreign currency translation
Transactions in foreign currencies are initially recorded at the functional
currency rate ruling at the date of the transaction. Monetary assets and
liabilities denominated in foreign currencies are retranslated at the
functional currency rate of exchange ruling at the balance sheet date.
Non-monetary items that are measured in terms of historical cost in a
foreign currency are translated using the exchange rate as at the date of the
initial transaction and are not subsequently restated.
Non-monetary items measured at fair value in a foreign currency are
translated using the exchange rates at the date when the fair value was
determined. All foreign exchange diferences are taken to the income
statement, except when it relates to items when gains or losses are
recognized directly in equity, the gain or loss is then recognized net of the
exchange component in equity.
Borrowings

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Interest-bearing bank loans and overdrafts are initially recorded at the

proceeds received, net of direct issue costs. Finance charges including
premiums payable on settlement or redemption and direct issue costs, are
accounted for on an accrual basis in the income statement using the
efective interest method and are added to the carrying amount of the
instrument to the extent that they are not settled in the period in which they
arise.
Loans and Advances
Loans and Advances are non-derivative financial assets with fixed or
determinable payments that are not quoted in an active market.
Cash and Cash Equivalents
Cash and cash equivalents comprise cash at bank and in hand and shortterm deposits with an original maturity of three months or less in the
balance sheet. For the purpose of the cash flow statement, cash and cash
equivalents consists of cash and cash equivalents as defined above, net of
outstanding bank overdrafts.
Post Balance Sheet Events
Events subsequent to the balance sheet date are reflected in the financial
statements only to the extent that they relate to the year under
consideration and the efect is material.
Stated capital
Ordinary shares are classified as equity at cost of issue.
Use of Estimates and Judgement
The preparation of financial statements in conformity with IFRS requires
management to make judgement, estimates and assumptions that afect
the application of policies and reported amounts of assets, liabilities, income
and expenses.
The estimates and the associated assumptions are based on historical
experience and various other factors that are believed to be reasonable
under the circumstances, the results of which form the basis of making the
judgement about carrying values of assets and liabilities that are not readily
apparent from other sources. Actual results may difer from these estimates.
Provisions
Provisions are recognized when <company> has a present obligation(legal
or constructive)as a result of a past events, and it is probable that an
outflow of resources embodying economic benefits will be required to settle
the obligations and a reliable estimate can be made of the amount of the
obligation.

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The expenses relating to any provision is presented in the income statement

net of any reimbursement. If the efect of the time value of money is
material, provisions are determined by discounting the expected future cash
flows at a pre-tax rate that reflects current market assessment of the time
value of money and, when appropriate, the risks specific to the liabilities.
When discounting is used the increase in the provision due to the passage of
time is recognized as the borrowing cost.
Financial risks management
<company> financial instruments consist mainly of deposits with bank
accounts, financial instruments, receivable, payable and loans. Derivative
instrument are not used by the company for hedging purposes. <company>
does not speculate in the trading of derivative instrument or does it operate
foreign contracts or fixed interest swap agreements.
Defined Contribution Plans
Under the National Pension Act, (Act 766), <company> contributes 13% of
employee's basic salary to the Social Security and National Insurance Trust
(SSNIT) for employee pensions under a Deferred Benefit Pension Scheme.
<company> obligation is limited to the relevant contributions, which were
settled on due dates. The pension liabilities and obligations, however, rest
with SSNIT

10.8 Gathering, classifying & recording transactions

To ensure financial information provided to management is relevant and timely,
care should be exercised in gathering, classifying and recording accounting data.
1
Filing system
An accounting data should be properly filed whether in hard copy or in a
computer / machine readable. This will guarantee the reliability of financial
information. Document should be filed according to the main categories, sub categories and on monthly basis within the financial year. Hard copy documents
should be properly labelled and stored in a file cabinet. Labelling should be done
using the month/year and the main categories. The sub - categories will be within
the main category.
Examples:
Salaries file for the month of Jan 2016 which also contains PAYE and Social
Security Fund (SSF) deductions.
The labelling will be Jan16/ Salary
Jan 16 is the month within the financial year
Salary is the main category
PAYE & SSF are the sub categories within the main category which should be
properly labelled
Bank payments by <company> are made through several bank accounts i.e.
bank 1, 2 & 3.

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2
Transactions recording
Recording transactions includes documenting sales), and entering purchases (in
the account payable account based on the supporting documents) and accruing /
paying for authorised expenditures.
Categorizing transactions means grouping the transactions under appropriate
heading. An example is where interest earned is analysed into interest on loans
and interest earned on investment and property, plant & equipment have been
grouped into say motor vehicles, plant and machinery etc.
Transactions are summarised after they have been recorded and categorised.
Summary means summing up each category or condensing the categories to
facilitate easy reporting or to fulfil the reporting requirements.
1
Double-entry accounting
In recording transactions, the double-entry system of accounting is observed.
That is for every credit entry, there must be a debit entry. Entries are made in the
books of accounts (Nominal ledger).
An example:
<company> purchases a fleet of motor vehicles worth GH290,000.00 paying a
cheque of GH 100, 000.00 and the balance by a bank loan.
The entries to record this transaction will be:
A debit of GH 290, 000.00 to motor vehicle, a sub category under property,
plant & equipment which is the main category.
A credit of GH 100, 000.00 to the bank account for the initial payment.
A credit of GH 190, 000.00 to the bank loan account.
The above is journalised as follows:
Dr. Property, plant & equipment (motor vehicle)

290,000

Cr. Bank

100,000

Cr. Bank Loan

190,000

The entries balance because the GH290,000,000 debit is equal to the sum of
the two credits.

Elements of double entry system

Double-entry system which is the accounting treatment of transactions has five
elements/types of accounts. The elements directly related to the measurement of
financial position are assets, liabilities and equity. These are defined as follows:

An asset is a resource controlled by the entity as a result of past events

and from which future economic benefits are expected to flow to the entity.

A liability is a present obligation of the entity arising from past events, the
settlement of which is expected to result in an outflow from the entity of
resources embodying economic benefits.
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Equity is the residual interest in the assets of the entity after deducting all
its liabilities.

The elements of income statement are defined as follows:

Income is increases in economic benefits during the accounting period in

the form of inflows or enhancements of assets or decreases of liabilities
that result in increases in equity, other than those relating to contributions
from equity participants.

Expenses are decreases in economic benefits during the accounting period

in the form of outflows or depletions of assets or incurrences of liabilities
that result in decreases in equity, other than those relating to distributions
to equity participants.

3
Recognition criteria
An item that meets the definition of an element should be recognised if:

It is probable that any future economic benefit associated with the item
will flow to or from the entity; and

The item has a cost or value that can be measured with reliability.

4
Structure of accounts
<company> structure of elements (accounts type) in the financial position and
the income statement are as below in the books of accounts / ledgers.

Primary code

Element

2000
4000
6000
8000
9000

accounts type
Income
Expenses
Assets
Liability
Equity

Type of accounts
balance
Credit
Debit
Debit
Credit
Credit

1
Income
<company> income is mainly income from the sales (of various products) to its
customers. It is assigned primary code 2000. Main categories of income sources
are assigned secondary codes ranging from 001 999, to be part of the primary
code. Sub-categories are assigned tertiary codes from .1 - .999. For example, sale
of obaatanpa Rice is assigned 2005.1 (i.e. primary code 2000(sales) plus
secondary code 005(rice product code) then a tertiary code of .1 (obaatanpa
rice)) etc.
2
Expenditure
There are various expenditure categories of <company> with a primary code of
4000. Noticeable among them are communication, salaries & wages, rent and
depreciation. Main categories of expenditure are assigned secondary codes
ranging from 001 999, to be part of the primary code. Sub-categories are
assigned tertiary codes from .1 - .999. For example, communication expense on
marketers is assigned 4001.1 (i.e. primary code 4000(Expenditure) plus
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secondary code 001(communication) then a tertiary code of .1(communication on

marketers)) etc.
3
Assets
These have been classified into non current assets, current assets. The primary
code assigned to all assets is 6000. Main categories of current assets are
assigned secondary codes ranging from 001 199, to be part of the primary
code. Sub-categories are assigned tertiary codes from .1 - .999. For example, a
sub category of Cash in vault under a main category of Cash in hand is assigned
6001.3 (i.e. primary code 6000 plus secondary code 001 then a tertiary code of .
3) etc.
Main categories of non - current assets are assigned secondary codes ranging
from 200 299, to be part of the primary code. Sub-categories are assigned
tertiary codes from .1 - .999. For example, a sub category of motor vehicles
under a main category of property plant and equipment is assigned 6210.4 (i.e.
primary code 6000 plus secondary code 210 then a tertiary code of .4) etc.
4
Liabilities
These have been classified into current, and long term. The primary code
assigned to all liabilities is 8000. Main categories of current liabilities are
assigned secondary codes ranging from 001 199, to be part of the primary
code. Sub-categories are assigned tertiary codes from .1 - .999. For example, a
sub category of rent payables under a main category of trade and other payables
is assigned 8001.2 (i.e. primary code 8000 plus secondary code 001 then a
tertiary code of .2) etc.
Main categories of long term liabilities are assigned secondary codes ranging
from 200 299, to be part of the primary code. Sub-categories are assigned
tertiary codes from .1 - .999.
5
Equity
These have been classified into stated capital and reserves. The primary code
assigned to Equity is 9000. Main categories of stated capital is assigned
secondary code ranging from 001 003, to be part of the primary code. There are
no Sub-categories. Main categories of reserves are assigned secondary codes
ranging from 100 199, to be part of the primary code. Sub-categories are
assigned tertiary codes from .1 - .999.
5
Tool for recording
<company> relies on QuickBooks, VT transaction software, sage and Microsoft
Office Suite specifically Excel in recording and processing of accounting data, that
is for its ledger entries. The main reports generated are; trial balance, income
statement, financial position, cash flow statement
6
Source documents
The source document is essential to the bookkeeping and accounting process. It
is the evidence that a financial transaction occurred. If a company is audited,
source documents back up the accounting journals and general ledger as an
indisputable audit trail.
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A source document describes all the basic facts of the transaction such as the
amount of the transaction to which the transaction was made, the purpose of the
transaction, and the date of the transaction
Here are some examples of common source documents:

Cheque & Cash payment vouchers

Petty cash voucher

cancelled cheques

Journal voucher

invoices

receipt

deposit slip

quotation & purchase order

Bank statement

Goods received note

Goods despatched note

Waybill

Visa Books

Log books
The list above may not be exhaustive. Samples of some of the above documents
are attached.

Transactions and its accounting treatment

<company> is into general trading various goods and services. The income
sources of the Company are mainly from sale of products. Noticeable among the
expenses are interest expense, wages & salaries, transportation, etc.
The accounting treatments of <company> transactions are tabled below. Please
note that the transactions described below may not be exhaustive.
s/n
1.

2.

Code
6006
2000

Accounting treatment
Debit Customer account
Credi Sales account

6002
6006

t
Debit
Credi

Description of transaction
With the amount of sales
made to the customer

Bank account
Customer account

With the amount of money

received

t
3

customer

from
for

the

made
With expenses

4000
6002

Debit
Credi

Expenses
Bank/cash

4000
8000

t
Debit
Credi

Expenses
Accruals / payables

With

4000
6007

t
Debit
Credi

Expenses
Prepayments

With

t
Debit

Provision

the
sales

incurred

and paid for

expenses

incurred

and not paid for

the

prepayment

portion being expended

for

With depreciation charge

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11

12

13

14

15

16

17

18

Credi

depreciation
Accumulated

for the year.

t
Debit

depreciation
Prov. for bad & doubtful

Credi

debt (I.S)
Prov. for bad & doubtful

t
Debit

debt (F.P)
Prov. for bad & doubtful

Credi

debt (F.P)
Prov. for bad & doubtful

t
Debit
Credi

debt (I.S.)
Provisions (I.S)
Provisions (F.P)

t
Debit
Credi

Provision for taxation

Corporate tax

With

t
Debit
Credi

Corporate tax
Bank/cash

With corporate tax paid

t
Debit

Property

Credi

equipment
Bank/cash

t
Debit

Property

equipment
Suppliers/payables

acquired

Credi
t
Debit
Credi

Inventory
Bank/cash

With the cost of inventory

t
Debit

Inventory

purchased into store not

Credi

stationery)
Suppliers

t
Debit
Credi

Stationery & printing

Inventory

With

plant

20

for bad and doubtful debt.

With decrease in provision

for bad and doubtful debt.

With any other provisions

made during the year
corporate

tax

provision made

&

With the cost of an asset

acquired

that

has

been

paid for.
plant

&

With the cost of an asset

that

has

been

paid for.

purchased into store

(say

t
19

With increase in provision

Debit
Credi

Prepayments
Bank/cash

t
Debit

Accruals/payables/suppli

With the cost of inventory

paid
inventory

stationery)

(say

consumed

during the period

With prepayments

made

during the period

With payments to suppliers
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41

on credit

Credi

ers
Bank/cash

t
Debit
Credi

Investment
Bank/cash

With

treasury

t
22

Debit
Credi

purchase

bills

and

of

other

investment
With unearned discount on

Investment
Unearned discount

treasury

t
23

the

bills

or

similar

investments
With the amount redeemed

Debit
Credi

Bank/cash
Investment

t
Debit
Credi

Asset disposal a/c

Property
plant

t
Debit

equipment (PPE)
Accumulated

depreciation on the asset

Credi

depreciation
Asset disposal a/c

t
Debit
Credi

Bank/cash
Asset disposal a/c

With the amount realised

31

t
Debit
Credi

Asset disposal a/c

Income statement

With the profit on disposal

32

t
Debit
Credi

Income statement
Asset disposal a/c

With the loss on disposal

t
Debit
Debit
Credi

Salaries & wages

Overtime
P.A.Y.E.

With

t
Credi

S.S.F.

t
Credi

Other deductions

t
Credi

Salary control

t
Debit
Debit
Debit
Debit
Credi

P.A.Y.E.
S.S.F.
Other deductions
Salary control
Bank / cash

24

25

60

33

34

on maturity
With the cost of PPE being
&

disposed
With

the

accumulated

being disposed

on disposal

salaries,

overtime

and

wages,
payroll

accruals

With payment of payroll

accruals

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Accounting Policies and Procedures Manual

35

t
Debit
Credi

Bank/cash
Stated capital

36

t
Debit
Credi

PPE/other asset
Stated capital

With

37

t
Debit
Credi

Income surplus
Stated capital

With capitalising issue

38

t
Debit
Credi

Income surplus
Dividend account

With dividend payable

39

t
Debit
Credi

Dividend account
Bank /cash

With dividend paid

other

consideration

other than cash

10.9 Presentation of financial statements

The financial year of <company> is 1st January to 31st December each year.
Annual financial statements at the end of each year should be prepared for audit
purposes in accordance with the accounting framework in existence.
A complete set of financial statements comprises:

a statement of financial position as at the end of the period;

a statement of comprehensive income for the period;

a statement of changes in equity for the period;

a statement of cash flows for the period;

notes, comprising a summary of significant accounting policies and other

explanatory information; and

a statement of financial position as at the beginning of the earliest

comparative period when an entity applies an accounting policy
retrospectively or makes a retrospective restatement of items in its financial
statements, or when it reclassifies items in its financial statements.

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12 Budgeting
Budgeting is essential to the planning and prudent managing of <company>
financial performance.
10.10Responsibility for budget preparation
The finance & audit committee of the Board of Directors has the responsibility of
initiating the preparation of the budget. The Chief Executive Officer (CEO) has
overall responsibility for the preparation and co-ordination of the budget. This
responsibility should be carried out on his behalf by the Finance Manager.
The Co-ordinating role should involve the issue of guidelines and directives and
consolidation of the budget submitted by various departments

10.11Budget cycle
The budget cycle for <company> commences at the beginning of the first
quarter of every financial year. The cycle ends at the end of the fourth quarter of
the following financial year. Every year the Finance Manager should issue a
timetable at the commencement of the budget cycle which should include a
review of the actual performance of twelve months within the financial year.
The Budget Time Table will show amongst other things, the main budgeting tasks,
the responsibilities of persons involved and the possible time allowed.
At the start of the annual budgetary process, the BOD and management should
hold a meeting to set out the targets and assumptions and guidelines for the
preparation of the budget.
The Finance Manager should consolidate departments budget for discussion by
Management. Management may request for amendments considered necessary.
The Finance Manager should finalise the draft budget for consideration and
approval by the finance & audit committee. The Committee should meet to
review and may request amendments before final approval by the BOD.
On approval for implementation, management should on monthly basis review
their performance with the budget to identify areas of improvement.

10.12Authorization and Approval Limits & Procedures

Authorization and approval limits for various documentation and processes are
set out below:
Officers who authorize or approve any document must ensure that the
document and supporting attachments are in order and conform to
established procedures of <company> Ltd.

No Officer should solely approve or authorize any expenditure for himself. In

such cases, the Officer must obtain approval of a superior officer.

The Accountant has the overall responsibility for ensuring that the various
authority limits are enforced.

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Any review or changes in the limits must be approved by the Board of

Directors.

All vouchers for payment should:

be properly signed, authorized and approved;
bear the appropriate accounts code;
be arithmetically checked as correct;

Documentation

Authorisation and Approval

1. Employment of staf
to the

All employment of staf will be subject

approval of the Chief Executive Officer

2.

To be checked and approved by the

Chief Executive Officer and General
Manager. Cheque signatories are
also
to approve payroll and payment
voucher before signing the cheque.

Staf Payroll

4. Staf salary, promotions, salary

reviewed and allowances
advice of the

To be authorized and approved and

by the Chief Executive Officer on the
Directors.
5. Purchase Requisition
To
be
authorized by the General Manager of
the Company

6. Cheque Payment Voucher

This will be raised only where the

supporting documentation has been
authorized by the appropriate officer.
Final approval for a cheque to be raised
will be given by the Chief Executive
Officer.

7. Cheques and other Bank

documents

To be signed by any Two (2) officers, of

which one should be the CEO and
another person to be determined by

the
Board of Directors.
8. Petty Cash

Operational expenses up to Two

hundred Ghana cedis (GH200) may
be paid through petty cash, while those
in excess of Two hundred Ghana cedis
may be reimbursed by cheque. All
petty cash vouchers shall be authorized
by the General Manager

9. Petty Cash Imprest (Float)

Petty cash system will be on an imprest

basis with a minimum float of One
thousand Ghana Cedis and maximum
Three hundred Ghana Cedis
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10.Capital Expenditure
the

Capital projects must be approved by

Board o of Directors

11. Debt Write-of

Must be approved by the General

Manager, Head of Internal Audit and
Chief Executive Officer.

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13 General financial transactions

Below are the procedures adopted for by <company>:
10.13Cash & Bank
1
Receipts
These are mainly receipts from sales (deposited by the marketers) and
investments.
The procedures shall be as follows:
Only authorised personnel shall receive cash and /or cheques on behalf of the
Company. The following documents bearing the appropriate amount shall be
issued to Customers and duplicate copy properly kept:
Receipt voucher
Deposit slips
Banking should be done intact on daily basis after reconciliation of amounts
received from Customers and receipts / deposit.
Unbanked monies received from Customers should be kept in a well secured
vault or safe under lock and key.
Cash received for office operations shall be kept in safe other than vault
describe above.
Monies received from Customers should be credited to their account and
cashbook debited
2
Payments
These are mainly for capital & recurrent expenditures
1

Payments to Suppliers
Payment voucher (PV) is the main document for processing payment.
All PVs shall be authorised & approved before payments can be made.
The PV shall have the details of the payee, purpose, date, cheque number,
amount, account number, accounts code, prepared by, certified by and
approved by etc.
Supporting documents must be attached to the PV for approval by the
responsible official.
Processing of payment can only commence after approval such transactions
Appropriate taxes should be deducted whiles processing payments.
All payments to suppliers must be by crossed cheques, made payable to the
supplier named on the invoice/payment voucher.
Postings into the Payments Cash Book are made through the Payment
Vouchers
Payment of Wages and Salaries
Payment of salaries to staf with bank accounts is efected by issuing a cheque
payable to the bank for the total amount to be credited to the individual staf
accounts.
Statutory deductions must be paid to the various regulatory bodies on due
dates.

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Preparation of Cheques
All cheques must be made payable to order and crossed Account Payee
Only/Not Negotiable.
If a cheque is cancelled, the stub of the cancelled cheque must be crossed out
and the word Cancelled written on it.
The cheque number of the cancelled cheque must be cut and stapled to the
cheque stub and the cancelled cheque destroyed.

4
Cheque Signatories
All cheques must be signed by two (2) signatories of whom the Chief Executive
Officer of <company> Ltd should be the principal signatory. The list of signatories
will be determined from time to time by the Board of Directors.
5
Bank Reconciliation Statement
A bank reconciliation statement must be prepared monthly for all the bank
accounts within five working days of the close of the period. This statement must
be prepared by an officer other than the Accountant who will forward this to the
Head of Internal Audit and Chief Executive Officer for approval.
Lodgements into bank accounts not credited by the bank (uncredited cheques)
and unpresented cheques for over one month must be investigated. A list of
unpresented cheques should be made from bank reconciliations to enable the
identification of stale cheques for reverse entries to be passed. Copies of all
monthly bank reconciliation statements must be kept on file.
6
Cheque Book Register
The Cashier should maintain a cheque register which records all cheques sent out
to suppliers. The following details should be found in the register
- Date on cheque
- Name of supplier
- Payment voucher number
- Cheque number
- Amount on cheque
7

Controls and Checks

The monthly balances in the cash books must agree with the cash control
account in the Nominal Ledger.

All payments must be accompanied by properly authorized documentation

All supporting documentation to any payment must be stamped PAID or

otherwise cancelled to prevent double payment, which could occur if the
same documentation is used to back-up another cheque.

After the release of the signed cheque to the creditor/claimant, the duplicate
copy of the payment voucher must be filed with the relevant documentation
serially for purposes of recording and auditing.

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10.14Petty Cash
In order that funds are readily made available for the day-to-day running costs,
e.g. travelling expenses, fuel, etc. The Head of finance will maintain a petty cash
float. The float will be controlled through a petty cash book. The amount of float
will be authorised by the CEO.
8

a.

General Procedures
A fixed float must be determined periodically by the Chief Executive
Officer.
A Petty Cash Reimbursement Statement summarising the Statement of
Accounts of the last amount replenished and stating the amount currently
required shall be used.
All payments from Petty Cash are made on the basis of an approved petty
cash voucher.
Petty Cash transactions are summarized monthly and posted into the
nominal ledger.
The initial petty cash cheque will be debited to Petty cash Float in the
nominal ledger.
Subsequent reimbursements are charged to their respective asset,
expenses or liability accounts.
The imprest system of petty cash provides a simple and efective control
over funds because;
it provides an automatic and regular review of the petty cash expenditure and
records;
b. it prevents the petty cash custodian from arbitrarily increasing the
petty cash float without proper approval.

Petty Cash Controls and Checks

Every payment out of petty cash must be supported by a Petty Cash
Voucher (PCV) which must be authorised by the General Manager
The accountant will issue the cash and enter the transaction into the
payments side of the petty cash book.
Invoices or receipts must be provided to support the subsequent
expenditure; these will be attached to the PCV.
Where the amount spent is less than issued, the remainder must be
returned to the Cashier, a receipt for the return will be issued
Returned cash will be entered to the receipts side of the cashbook

9
Payments from Petty Cash
The procedure for payment from petty cash expenses is similar to that of the
main cash payments. They are as follows:
A claim for petty cash payment is made by the claimant on a petty cash
voucher. The voucher must indicate whether the claim is for services
rendered or an entitlement for services due or an advance for a service to
be rendered.
If approved, the voucher passes onto the Account officer who records all
advances for services due in a REGISTER OF ADVANCES before authorising
the authorising the payment of the claim.
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On receipt of the cash the claimant signs the voucher forms acknowledging
receipt of the money and the cashier stamps the voucher as paid.
If an advance payment is made, the cashier gives the claimant an Advances
Accountability Form which should be completed and returned to the
Accountant.
The purpose of the Advances Accountability Form is to ensure that amount
paid by the Cashier before the performance of specific duties, e.g. travelling
or before specific expenses are concerned receive prior approval by the
Accountant and that these are accounted for with appropriate receipts or
documents. Any unaccounted for advances should be posted to the
claimants personal account and deducted from his/her salary at the end of
the month. The format of the form will be as follows:
Date

Name of staf receiving the advance

Purpose
Approval authority
Signature of Accountant
Signature of receipt
Date Accounted for
Related Petty Cash Voucher number

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14 Payroll
This section describes the <company> accounting procedures relating to payroll
and staf expenses.
The Accountant should:
Calculate salary/wage payments for each employee;
Provide information on the Companys liabilities for statutory and other
contributions;
Maintain up to date records of each employees pay details;

Produce various statutory month end returns;

Produce other reports of permanent staf salary details as when required;
Update the nominal ledger system for the cost of labour employed in
relation to particular cost centres or departments;
Provide details of deductions for staf advances and staf loans.

10.15Employee Records
For each permanent employee, there must be a file which will contain:
Engagements/appointment details
Confirmation
Salary and salary reviews
Location/division of employee
Termination/dismissal and/or resignation details

All the above information, as well as changes, must be notified to the

accounts section.

An attendance register will be maintained for recording attendance of staf

and will form the basis for preparing payroll.

10.16Preparation of Payroll
Microsoft Excel application is used to prepare the monthly payroll. The
payroll should have the following entries:

Name of employee
Date of Birth
SSNIT Number
Basic Pay for the month
Allowances
Gross pay for month
Social Security deductions
Employee income tax deductions (PAYE)
Loan repayments and other deductions
Welfare dues
Net pay
Social security (Employer contribution)
Signature column

The payroll should be totalled and cross-cast and then approved by the
General Manager and Chief Executive Officer before the payroll cheque is
prepared.
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10.17Payment of Salaries
Salary payment is efected by crediting the respective bank accounts of
employees

10.18Payroll Controls
The following controls should prevail over payroll.
(a) Physical
Salary advice forms must be
locked away when not being used.
(b) Authorisation
Salary Advances must be
recommended by CEO who will
refer this to the Finance Manage
Payment of salary should not be
made to third parties, unless
written authority from the payee is
given.
(c)

Payroll Reconciliation

At the end of each month, the net

amount payable must be reconciled
to the gross pay and the total of
the deductions made from the
payroll
The total number of employees
stated on the payroll must be
reconciled to the master staf lists
kept for each department or
section
The total employers contribution to
the Social Security Fund (i.e. 13%)
must be reconciled to the total
deductions
from
source
from
employees (i.e. 5.5%)

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10.19Statutory Returns
Monthly returns and payments are required in respect of:
Social Security Contributions (Employer and Employee)
P A Y E deductions
Welfare dues
5.6 Salary Advances to staf
Staf advances shall be given upon request in accordance with regulations
stipulated in the personnel policies and procedures manual (by complete, signed
and authorized Staf Advance Authorization form, SAAF). An Advances ledger
account should be opened and reconciled at every end month. However, all
advances should be approved subject to the availability of funds.

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15 Local Purchases and Recording

10.20Purchasing Function
An up-to-date record must be kept of suppliers with respect to quality and prices.
Planning of purchases is important to ensure that liquid funds are not
unnecessarily tied up.
1
Duties of Purchasing Officer
The duties of the Procurement Officer would include the following:

Choosing the right supplier, who will provide the right goods in terms of
quality, at the right time and at the lowest ultimate cost to <company> Ltd.
Ensuring that, as far as is practicable, all orders are delivered on time.

2
Purchase Requisition
When the storekeeper/ product manager requires an item(s) he/she raises a
Purchase Requisition and obtains the appropriate authorization from the General
Manager of <company> Ltd.
The Purchase Requisition is prepared in duplicate, with the original being passed
on to the procurement for purchasing.
3
Local Purchase Order (LPO)
All purchases must be covered by a Local Purchase Order (LPO) which should
indicate the quantity and value of goods purchased.
The Purchase order is prepared in four, with one to the supplier, one to the
Accounts, one for the warehouse and one for the product manager
4
Goods Received Note (GRN)
When goods are received, the accompanying delivery note must be checked
against the LPO by the receiving officer; and the date of receipt noted on the LPO.
A GRN will be raised in duplicate by the receiving officer showing:

Suppliers name
Date received
Delivery Note number
Quantity and description of goods received
Signature of receiver

The original of the GRN will be sent to the Accounts section, which will enter the
stock account code appropriate to each item on the GRN. The accounts section
will prepare a journal voucher for debiting stock account and crediting the
supplier.
6.2
Field Travel Claim Form
Field Travel Claim Form is the document of record of per diem and all other
expenses incurred by staf during field trips.
This form shall be used in claiming for expenses incurred by the staf while
on field trips or in accounting for monies advanced for travel expenses and
any other expenses.
This form is designed to collect information on the name of the traveller,
rate used, and other travel expenses. Staf making claim on travel or
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Accounting Policies and Procedures Manual

submitting returns on travel advances will be required to complete this

form.
All travel must be authorized by the Managing Director, Head of the particular
department and
counter signed by the Finance manager on the field authorization form. No
claims for reimbursements shall be honoured without these authorizations.

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Travel advances to Staf

Travel expenses incurred by staf or any other authorized person shall be

reimbursed according to the regulations set out in the Human Resource Policies
and Procedures Manual. A separate staf debtor account shall be opened for each
advance granted. Any advances not accounted for within two weeks shall be
recovered from the salary of the employee concerned without prior reference to
the employee.

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16 Inventory Control
10.21Introduction
The purpose of this section is to describe the procedures and documentation to
be used in recording and controlling stocks.
The procedure ensures:

that stock movement (receipts, dispatches, issues) are recorded on a daily

basis.
that stock movements are supported by properly authorized documentation.
that independent physical stock checks are carried out and that diferences
arising from such exercises are investigated and dealt with appropriately.
the storekeeper is responsible for the receipt, storage, safety and issues of
stocks
the Accounts section will be responsible for evaluating stock items and
maintaining records of stock values.

10.22Store Records
Records of physical stock will be maintained on Tally/Bin Cards kept by the
storekeeper. There must be a tally/Bin card for each item of stock and must show
the date for each receipt or issue and the balance. The accounts section will also
maintain stock records for valuation purposes.

10.23Issuing Procedures
Issues from stores to branches should be backed by a Stores Requisition which
must be approved by the Store Manager. Copies of approved stores requisitions
must be sent to the accounts office for valuation and entries into the stock
ledgers.

10.24Stock Control
1
Features
The principal features of stock control are:

Records of physical stocks maintained on bin/tally cards kept by storekeeper

Records of stock, in quantity and value, also to be kept by the accounts

section.

Goods received into store on basis of goods received notes and issued on the
basis of stores requisition notes.

Bin/tally cards and accounting records to show the balance in stocks after
each stock transaction.

Independent physical stock checks be carried out on continuous basis

throughout the year and discrepancies between physical figures investigated
and adjusted as appropriate.
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Stock records may not be opened for stationary and other similar consumable
items which are of low value. Recording their receipts and issues in a register
may suffice for the control of these items.
10.25Physical Stock Taking Procedures
Physical stock checks are aimed primarily at verifying the correctness of stock
records and thereby ensuring that the quantity and value of stock shown in
the books are accurate.

The General Manager has overall responsibility for proper implementation of

all stock taking and related accounting procedures.

Stock count and evaluation sheets should be used. These must show
description and stock code, position or location of item and unit of item (e.g.
pieces, kg., etc.).

The stock checker counts the items and records the quantity physically
counted. He/she then records the balance on the bin/tally cards and also on
the stock count sheet.

Where both physical quantities counted and the bin/tally card balances agree,
the checker must sign the bin/tally card.

Where there is a diference, this must be investigated and the General

Manager must approve any adjustment necessary to bring the stock balance
in agreement.

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8.
PROCESSING OF INVOICES
Only authorized and approved supplier invoices and credit notes will be entered
into the system.
The Accountant should enter the following details in the invoice register.
Date
Suppliers Invoice number
Internal reference number
Suppliers name (by reference to supplier listing)
Gross value of the invoice
Discount allowed
Net value of the invoice
Stamp the invoice detail and complete the details on the stamp. In the event that
an invoice is received from a new supplier whose details have not been credited
on the system, the Accountant should complete the purchases supplier update
form. Before any invoice is processed it is the duty of the Accountant to do the
following:
Match the invoice with a copy of the official purchase order invoice and
delivery note.
Match the invoice with goods or services delivery note
Note the order number and delivery note number on the details stamp
Match the invoice with goods received note (GRN)
Check the invoice calculations, extensions, cross casts and initial the
details stamp evidence of having performed this check
If there is any discrepancy in the first 4 points above him/her should
process as outlined in 9.1 below.
In the cases where an invoice is in part payment of a larger order, the accountant
must note the details of the invoice on his copy of the LPO for future reference
when receiving further invoices for the same order. In addition he/she must write
on the invoices in red ink part payment.
8.1 Dispute Invoice
An invoice is regarded in dispute when any of the checks described above
result in discrepancies e.g.
An invoice price difers from the order price
An invoice has been incorrectly extended
As soon as the invoice is regarded as disputed the disputed column in the
invoice register should be ticked and the invoice filled temporarily in a disputed
invoice file.
It is in the responsibility of the accountant to investigate disputed invoices by
liaising with the supplier and the finance manager. Once a disputed invoice has
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been resolved the tick in the disputed column in the invoice register should be
crossed.
The Accountant should review the invoice register on a monthly basis to ensure
the disputed invoices are being resolved on a timely basis.
8.2 Coding of invoice
The Accountant is responsible for coding to the appropriate purchase ledger
account and general ledger account by reference to the supplier listing and chart
accounts.
In respect of each invoice to be passed for processing, he should complete the
following details and write up the purchase journal (PJ) giving the journal a
specific sequential number.
The supplier code
The general ledger code
Check that the totals of the LPO correspond to the total gross value of the
invoice.
In the event of the Accountant being unable to allocate a general ledger code to
an invoice, he shall refer the invoice to the Finance manager for coding.
A supplier account shall be posted immediately with the invoice
8.3 Checking Output
The input of all invoices is checked for completeness and accuracy. The
purchase journal report will be generated and this will enable these checks
to be carried out.
The Accountant must check the invoices posted against the Purchase
Journal Report and ensure that the general ledger allocations and other
invoice details are correct. Where the accountant identifies that an error
has been made, the error on the listing should be circled and the correction
initiated and initialled.

8.4 Approval of invoices

The finance manager prior to processing should approve all invoices.
The Accountant must ensure that all invoices have been authorized by the
CEO and head of department. A week time will be allowed for approval.
The head of the relevant department must ensure that the invoice is sent to
the Accountant within a week of receipt of the invoice.
Once the invoice is approved it is sent to the Accountant. If the finance manager
is not satisfied with the invoice and cannot approve it for payment, it should be
regarded as a disputed invoice and investigated as outlined in (10.1) above.
At the end of the month the Accountant should agree the balance on the control
account to the suppliers listing. If there is any diference, reconciliation should be
prepared. The Accountant must also ensure that a monthly reconciliation is done
between the General ledger balance and the suppliers statement of account
balance.
The reconciliation has to be prepared and reviewed on a monthly basis and the
file maintained by the Accountant.
8.5 Updating supplier file
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The maintenance of the supplier file is the responsibility of the Accountant. He or

she must ensure that all changes to the file are made in line with these
procedures.
The Accountant will initiate, check and verify the changes. The finance
manager will authorize the changes. The finance manager is responsible
for authorizing the changes.
Any changes to the suppliers file, whether an insertion, an addition or a
deletion must be entered as an update file in the purchase ledger.
The input form shall be numbered sequentially and once completed by the
accountant is passed to the Finance manager for verification and further to
the CEO for approval and returned to the accountant for processing. After
the input, the forms should be filed sequentially.
At the month-end, the Accountant shall review the supplier update file and
ensure that all changes have been properly authorized, posted and
arranged in the required sequence.
At the end of each accounting period to finalizing the trial balance, the
Finance manager shall conduct a review of the purchasing journal and
identify any goods/services, which have not been invoiced. He/ She will
make an accrual for all such expenses by way of journal voucher.

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10 Capital Expenditure and Fixed Assets

10.26Introduction
All expenditure incurred for the acquisition of assets whose life expectancy is
over one year shall be termed capital. The assets thus purchased are fixed in
nature and must be diferentiated from current assets, which are normally
consumed in the production process or service delivery during the year.
The Board of Directors of <company> Ltd or Chief Executive Officer and Finance
Manager must approve all capital expenditure. Where an asset is constructed
over a period of time, the cost of constructing the asset is accumulated pending
completion when it could be transferred to the appropriate fixed assets records.
In approving any capital expenditure proposal the Board or Chief Executive
Officer and Finance Manager may consider the following:

Capital outlay involved.

Availability of funds for the proposal.
Financial, economic, or other justification of the project.
Method of acquisition or purchase.

10.27Management of Fixed Assets

Fixed assets must be managed by the Accountant and he shall undertake the
following:
Analyse and process capital expenditure documents;
Prepare payment vouchers;
Prepare record cards for newly acquired assets;
Calculate depreciation provision;
Prepare detailed quarterly reports.
The reports should indicate the following:
The cumulative value of each category of assets at the end of each quarter;
The cumulative depreciation of each category of assets as the end of each
quarter;
Any additions or disposals to or from each category of assets during the
quarter;
The Net Book Value (NBV) of each category of assets as at the end of each
quarter;
Summary of maintenance or repair costs incurred on each category of
assets during the quarter.
10.28Fixed Assets Register
The maintenance of the Fixed Assets Register shall be the responsibility of the
Accountant.
A fixed assets register must be maintained in which particulars of all assets
acquired shall be recorded. The following information about the assets (among
others) is to be indicated therein:
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suppliers name and address

Date purchased/acquired
purchase price
model and/or serial number (if available)
code
useful life
residual value
depreciation rate
annual depreciation charge, etc.
A fixed assets depreciation schedule must be prepared for all categories of fixed
assets.
2
Recording Fixed Asset Purchases
Purchase of a fixed asset is efected by debiting the fixed asset account and
crediting the vendor or bank/cash.
3
Disposal of Fixed Assets
The Accountant shall be responsible for handling the sale of fixed assets. The
ultimate valuation to be placed on the Fixed Assets must be approved by the
Chief Executive Officer and Finance Manager.
The profit or loss on disposal will be shown in the Fixed Assets disposal accounts
and the Statement of Comprehensive Income i.e. Other Comprehensive Income

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Accounting Policies and Procedures Manual

17 Management Information System

10.29Introduction
This section outlines the principal reports to be issued on a regular basis to the
BOD, Chairman and Chief Executive Officer.
The information will enable management to control the activities of <company>
Ltd and will also serve as a data bank for the purpose of setting the future plans
of the Company.
For the information to be useful, it must be timely. All monthly reports should be
issued by the 10th day of the following month. The report must highlight
significant or material occurrences during the month.
The following are the management information reports that must be sent to the
Chief Executive Officer.
10.30Reports
10.30.1.1.1

Monthly

Weekly Income Report

Monthly Income statement Report
Monthly Cash Flow Report
Monthly Trial Balance
10.30.1.1.2 Quarterly
Quarterly Capital Expenditure Report: Summarizes the amount authorized
and expended on capital asset acquisitions during the quarter and year-to-date.
Statement of Comprehensive Income: for the quarter and year-to-date (Y-TD). This report may also show the comparative amounts for the same quarter and
year to date of the budgeted amounts and showing the variances; and to the
previous year.
Statement of Financial Position: This is a position statement showing the
liabilities, equity and assets of the company at a particular point in time for
decision making.

Cash Flow Statement: shows how changes in Statement of Financial Position

and income afect cash and cash equivalents, and breaks the analysis down to
operating, investing, and financing activities. Essentially, the cash flow statement
is concerned with the flow of cash in and cash out of the business.

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Accounting Policies and Procedures Manual

18 Chart of Accounts
Account
s code

Accounts description

2000
2001
2001.1
2001.2
2002
2002.1
2002.2
2003
2003.1
2003.2
2004
2005

Sales
Rice

4000
4010
4001
4001.1
4001.2
4001.3
4001.4
4001.5
4001.6
4002
4002.1
4002.2
4002.3
4002.4
4003
4003.1
4003.2
4003.3
4004
4004.1
4004.2
4005
4005.1
4005.2
4005.4
4006
4006.1

Expenses
Borrowing Cost
Staf Cost
Salaries & wages
Employer's SSF contribution
Allowance
Overtime cost
Bonuses
Canteen expenses
Governance Expenses
Directors remuneration
Directors fees
BOD meeting expenses
AGM expenses
Communication Expenses
Telephone & fax
Internet & other bandwidth charges
Postage & delivery
Stationery & printing
Office stationery
Others
Vehicle Running Cost
Fuel & lubrication cost
Roadworthy, tolls etc.
others
Generator Running Cost
Fuel & lubrication cost

Obaatanpa
Other brands
Tomatoes
TAM TAM
Gino
Oil
Obaatanpa oil
Gino
Drinks
Beauty and Sanitary Products

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Accounting Policies and Procedures Manual

4007
4007.1
4007.2
4007.3
4008
4008.1
4008.2
4008.3
4008.4
4008.5
4009
4009.1
4009.2
4010
4011
4012
4012.1
4012.2
4012.3
4013
4013.1
4013.2
4013.4
4013.5
4014
4014.1
4014.2
4015
4015.1
4015.2
4015.3
4015.4
4016
4016.1
4016.2
4016.3
4017
4017.1
4017.2
4017.3
4018
4018.1
4018.2
4019
4019.1

Insurance Expenses
Vehicles
Burglary
Building
Repairs & Maintenance
Vehicles
Computers & data handling equipment
Furniture & fittings
Plant & Machinery
Building
Utilities
Electricity
Water
Cleaning and Sanitation
Rent
Professional Expenses
Audit Fees
Legal Fees
Consultancy services
Travelling Expenses
Hotel & accommodation expenses
Transportation (airfares etc.)
Meals, per diem & incidental travel cost
Others
Business Licensing & Registration
GRA annual registration fees
AMA business operating permit
Promotional Expenses
Advertising Expenses
Publicity and Promotion
Published Materials
Other Promotional Expenses
Provision for Doubtful & Bad Debt
Bad debt
Increase in provision
Decrease in provision
Training Expenses
Course fees
Travelling expenses
Per diem/accommodation/etc.
Exchange Diference
Loss on forex
Gain on forex
Other Expenses
Entertainment
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Accounting Policies and Procedures Manual

4020
4020.1
4020.2
4020.3
4021
4022
4022.1
4022.2
4022.3
4022.4
4022.5
4022.6
4023
4023.1
4023.2

6001
6001.1
6001.2
6002
6002.1
6002.2
6002.3
6003
6003.1
6003.2
6003.3
6004
6004.1
6005
6006
6006.1
6007
6007.1
6007.2
6007.3
6007.4
6008
6008.1
6008.2
6200
6201
6202

Bank Charges
GT Bank Ghana Limited
UBA Ghana Limited
Others
Amortization of Intangible Assets
Depreciation of Property, Plant & Equipment
Depreciation for buildings
Depreciation for leasehold improvements
Depreciation for vehicles
Depreciation for furniture & fittings
Depreciation for computers & data handling equipment
Depreciation for plant & Machinery
Corporate taxes
Income tax provision
Deferred tax
Assets
Cash on Hand
Petty cash Cedi
Cheques in Transit
Bank Balances
GT Bank Ghana Limited
UBA Ghana Limited
Others
Short Term Investment
Time deposit
Treasury bills
1 year note
Other Investment
Related Parties
Loans & Advances
Receivables
Sales Receivables
Prepayments and Other Receivables
Prepaid Insurance
Prepaid Rent
Prepaid Communication
Other Prepayments
Other Assets
Assets Held for Resale
Deferred tax
Property, Plant and Equipment
Land
Buildings
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Accounting Policies and Procedures Manual

6203
6204
6205
6206
6207
6208
6208.1
6208.2
6209
6209.1
6209.2
6209.3
6209.4
6209.5
6209.6

Leasehold improvements
Motor vehicles
Furniture and fixture
Computer & data handling equipment
Plant & equipment
Accumulated Amortization
Amortization expense for start-up costs
Other intangible assets
Accumulated Depreciation
Depreciation for buildings
Depreciation for leasehold improvements
Depreciation for vehicles
Depreciation for furniture & fittings
Depreciation for computers & data handling equipment
Depreciation for plant & equipment

8001
8001.1
8001.2
8200
8200.1
8200.2
8201
8201.1
8201.2
8201.3
8201.4
8202
8202.1
8202.2
8202.3
8202.4

Liabilities
Short Term Borrowings
Bank loan
Other loans
Long Term Borrowings
Bank loan
Other loans
Accounts Payable & Accrued Expenses
Interest payable
Legal fees
External audit fees
Other Expenses
Provisions
Provision for bad & doubtful debt
Provision for AGM expenses
Corporate tax
Other provisions

9000
9000.1
9001
9001.1
9001.2

Equity/Shareholders Fund
Stated Capital
Issued shares
Surpluses & Reserves
Income surplus/retained earnings
Capital surplus/revaluation reserve

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