Learning Objectives

Notes

Students may be introduced to this module by recognizing that both methods (synoptic/combination journal and the one-write system) fit within the traditional accounting cycle and that the purpose of each is to provide shortcuts in recording accounting data within the Generally Accepted Accounting Principles. There are many other shortcuts (journal-less bookkeeping, ledgerless bookkeeping, etc), but the two offered in this module are relevant to this level of study.

Shortcuts may be manual or computerized. If a business is computerized, entries may be made directly into the computer at the point of entry.

The word synoptic means "presenting a general view".

Although the structure of the synoptic/combination journal is generic, students should be made aware that there is no "one" synoptic/combination journal. A synoptic/combination journal is created specifically to match the needs of the specific business or organization. Its function is to satisfy the needs of the small organization or business that would have no need for a more complex system.

When analyzing the format of the synoptic/combination journal, students should observe the following points:

• it is multi-column
• it is used in businesses that have a relatively small number of transactions in a month or accounting time period
• it combines five special journals into one (mention particularly if students have completed Module 2 in which five special journals are utilized)
• the columns created are the most frequently used columns for transactions in the business.

The synoptic/combination journal can be easily accommodated by using spreadsheet software. A business using a five-journal system may find using accounting software more beneficial than that system, however, students should be aware that due to cost and other factors, a synoptic/combination journal may be chosen instead.

Students should work through the technical aspects of the synoptic/combination journal. Textbook examples and exercises may be used. Items that students should be aware of include:

• columns should be created for Provincial Sales Tax (PST) and the Goods and Services Tax (GST)
• the number and type of columns vary from business to business
• there must always be columns for post reference and document reference where applicable
• posting procedures for daily and monthly amounts
• procedures for carrying forward balances and dealing with balance brought forward amounts (pinhead totals).

This simulation may use 7 or 8 class hours. Some textbooks include simulations or students may be given the choice to design a synoptic/combination journal for an organization or business of their choice. Some suggestions may be for their home, organization of interest such as a hockey or baseball team, computer club, church youth group, student representative council (SRC), school store, or other school-related area.

The students will classify transactions into assets, liabilities, owner's equity, revenue and expense accounts. The most frequently used accounts (key accounts) will become column headings on the synoptic/combination journal. The account titles should be broad as opposed to narrow in description to allow for several transactions to be accommodated within that account; for example, utilities expense versus power expense.

6.6 To analyze and record transactions into the synoptic/combination journal. (CCT)

Subsidiary ledgers may or may not be needed depending on the previous knowledge of the student and on the complexity of the transactions the students are completing.

6.7 To balance and post transactions to the general and subsidiary ledgers.

Teachers should try to include as many steps and elements of the accounting cycle as possible.

Students should reflect on the processes they have completed in a simulation. The characteristics and function of the synoptic/combination journal recognized at the beginning of the module should be reaffirmed at this time. The explanation should be generic in description. The students may wish to give examples of how the synoptic/combination journal may be used in other applications.

There are many advantages of using the synoptic/combination journal:

• requires one/fewer lines to record an entry
• requires fewer postings
• may only post totals at the end of the month
• involves less chance of error
• saves time
• is easy to view (transactions are recorded in one place)
• one person can handle the journal
• is adaptable for a small business
• is suited for manual or electronic spreadsheet applications.

There are some disadvantages of the synoptic/combination journal:

• frequency of error increases due to the number of columns
• the journal may be physically large and cumbersome
• recorded transactions may require more than one line if column headings are not accommodating
• internal cash controls may be violated as one person could handle all the entries and also handle the cash.

Learning Objectives

Notes

6.9 To identify and describe the function and characteristics of the one-write method of recording accounting data. (COM)

What is a one-write system of recording data? Discuss the purpose of the one-write as being a shortcut method, particularly of manual accounting. The one-write system allows the user to prepare more than one accounting document and record in one step. It covers the first three steps of the accounting cycle: originating data, journalizing, and posting to a ledger. The journal portion of the one-write is very similar to that of the synoptic/combination journal. Most technical aspects of the one-write are similar to those learned with the synoptic/combination journal.

When the package is assembled, the person originating the data records on the source document while the information is simultaneously recorded on the journal and ledger card. The type of entries found in the one-write system are routine, repetitive entries, such as payroll, accounts receivable (credit sales), and accounts payable (payments on account) entries.

Businesses which have one source of revenue often use a one-write system. Some businesses use the one-write system for payroll purposes as the employer is required by law to provide the employee with a payroll voucher as well as the cheque to inform the employee of deductions. Using the one-write system, the voucher may be written at the same time as the cheque and recorded simultaneously into the journal and employees' earnings record. Some examples of where one-write systems are used may include dentists, accountants, lawyers, and small business (mainly payroll).

The advantages of the one-write system may include many of those identified for the synoptic/combination journal. One of its major advantages is convenience. The one-write system reduces the time to record entries, may reduce the number of errors, and reduces the time to post to ledgers.

Some disadvantages of the one-write system are the cost of the system, the availability of the system, and the fact that the system may not be tailored to suit the specific requirements of all businesses.

After a demonstration of how the pegboard may be assembled, students should work through a simulation.

Simulations should be used for this portion of the module. The pegboards may be used repeatedly. Some companies provide free pegboards with the purchase of a number of practice sets.

If the simulations are not purchased, the teacher may provide instruction sheets, transactions, source documents, journal, and ledger cards for student use. Carbon paper must be provided.

Some technical aspects for students to consider are:

• how to correct an error using the one-write system. (Students should be reminded to cross out the error using a line and write the correct amount above. This may be difficult using the one-write system but correct procedures should be reinforced.)
• how to use pinhead totals (balance carried forward, balance brought forward)
• posting column totals at the end of the period.

6.12 To review the purpose of shortcuts in the accounting cycle. (COM)

To clarify the purpose of shortcuts, students should review the generic purposes of both the synoptic/combination journal and the one-write bookkeeping system.