Main

OCP on Accounting Information System of Pedrollo NK
Ltd.
Chapter 1
Introduction
1.1
Introduction

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The OCP program is an essential part of Masters of Business

Administration (MBA). As a student of MBA, it is required to work in a
selected
institution
to
enhance
ones
practical
knowledge
and
experiences. For the requirement of my course I was assigned to work on

Pedrollo nk Ltd. In this situation I was assigned to prepare report on A
study on the Accounting Information System on Pedrollo nk Ltd
For any Masters
of Business
Administration (MBA) student only
curriculum activities is not enough for handling the real life business
situation. OCP program is the perfect blend of the theoretical and the
practical life experience. Whole the report has described the different
terms that is related to the AIS and the detail scenario of the different
private organizational performances.
1.2
Objectives of the study
The main objective of the study is to explore the accounting information

system of Pedrollo nk Ltd.
To discuss about AIS & its importance in modern business.

To explore AIS of Pedrollo nk Ltd.
To identify whether Pedrollo nk Ltd. follows standard Accounting
Practices.
1.3
Methodology of the study
Methods followed to perform a job or conducting activities to complete a

task is called methodology. In conducting this study the following
methodology was adopted in collecting data & information, preparation
of reports etc. The methodology of report is given below:
Primary sources of data:
For preparing this report, data was collected from different primary
sources. Different questions asked to IT officer and Accounts officer to
collect the required data. Those data are collected through face to
conversation and observation.

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Secondary sources of data:

Secondary sources of data are of two kinds:
Internal: Internal Reports of various records of the company,
Other published documents and Website.

External: Books, Articles and Website.
1.4 Scope of the study

The study has been conducted into two steps. In the first step, the
concept, use, principles etc. of AIS on Pedrollo nk Ltd. have been studied.
In the second part the opinion of the internal users has been collected.
1.5
Limitation
Since the personnel were very busy on their personal activities,
they could not provide enough time to me to discus my subject
broadly.
Lack of opportunity to visit IT & Accounts department more than

one time.
The website of Pedrollo are not that much rich with data.
The main constrain of the study was in sufficiency of information,

which was required for the study. There are various information
the employee cant provide due to security and other corporate
obligations.
Due to time limitation many of the aspects could not be discussed

in the present report.
Some information that are skipped by the respondent.
I have some error while analyzing the data and preparing the report.

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Chapter 2
Company Overview

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2.1 Background of Pedrollo

Since 1969, Pedrollo nk Ltd. is working as a renowned Trading House
under proprietorship business to carry on import business & promoting
quality products with competitive prices in the local market.
The company started its journey with electric water pump marketing since
1985. After formally incorporated in October 1987 it became the sole
agent of world known Italian 'PEDROLLO' water pumps. During the last 30
years, PEDROLLO has become the symbol of quality and market leader for
the electric water pumps in all sectors through 14 showrooms, 190
dealers, 344 retailers and 43 service centers which made it possible to sell
more than 1000000 pumps. Recently the company has planned to
introduce a state of art water management system in Bangladesh.
The company head office is located in Chittagong with regional offices in
Dhaka & Bogra with distribution facilities around the country and
showrooms are located in big cities supported by 260 employees. Beside
the PEDROLLO it has the sole agency ship of Taiwanese brand 'HCP' and
Italian brand 'Rovatti' elctric pumps. From our inception, we believe in
serving people with
Longer product life
Energy efficiency
Minimum maintenance & countrywide service centers
Widest range of products these four unique features made our

products BEST among our competitors.
Our motto is to select the RIGHT pump as per users requirement

so that our customers get most of their return from the product. Selection

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of the right product helped us greatly to gain the confidence of our

customers.
Being an Agro based economy with large population, our specially
designed Irrigation pumps & household pumps has been serving greatly to
the users even in low voltage too. Household pumps were in 1985. After
huge success of these series, we introduced the Irrigation series &
Submersible series in 1988 & in 1991 respectively which also became
market leader within 1 year.
With our dedicated & competent employees supported by state of the art
technology made it possible to serve our valued customers at minimum
time. This made us the Best water pump supplier company of Bangladesh
with more than 1 MILLION pumps in the market.
Our head office is located at Chittagong with another 2 offices in Dhaka &
Bogra with distribution facilities around the country & showrooms are
located in the big cities.
Besides the brand PEDROLLO with more than 350 products under 8
different categories, Pedrollo nk Limited is also exclusively serving its
customer base with other world-renown pump manufacturers with brands
like HCP for drainage pumps, Rovatti for multi stage pump too.
2.2 Vision and values

Vision
Vision serves as the framework for our Roadmap and guides every aspect
of the business by describing what we need to accomplish in order to
continue achieving sustainable, quality growth.
People: Be a great place to work where people are inspired to be

the best they can be.

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Portfolio: Bring to the world a portfolio of quality pumps that

anticipate and satisfy peoples desires and needs.
Partners: Nurture a winning network of customers and suppliers,

together we create mutual, enduring value.
Planet: Be a responsible citizen that makes a difference by

helping build and support sustainable communities.
Profit: Maximize long-term return to shareowners while being

mindful of our overall responsibilities.
Values
Values serve as a compass for our actions and describe how we behave in
the world.
Leadership: The courage to shape a better future
Collaboration: Leverage collective genius
Integrity: Be real
Accountability: If it is to be, its up to me
Passion: Committed in heart and mind
Diversity: As inclusive as our brands
2.3 Department of Human Resource

The
human
resource
departments
achieve
the
objectives
of
the
Recruitment, Selection & Placement of the employees.

Promotion, Transfer, Demotion & disciplinary action
of
the
employees.
Leave of the Employees.
Ensure all festival & Incentive bonus.
Induction of newly appointed employees.
Identification of problems of employees.
Ensure Competency Assessment Report for all employees, yearly or
organization as well as the goal of department-
Interim.

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2.4 Products line
Application:
Maximum
liquid
temperature +65 C *Ambient
temperature up to +40 C *Burst
pressure > 40 bar *Protection: IP 65
*VOLTAGE: 230 V - Frequency: 50/60
Hz *Max current: - 10 A EASYPRESS I
- 16 A EASYPRESS II
Performance: Max flow rate: 200
l/min (12 m/h) *Working pressure:
10 bar *Start-up pressure: 1.5 bar
Application:
*Mano-metric
suction lift up to 9 m (HS)
*Liquid temperature between
-10 C and +40 C *Ambient
temperature between -10 C
and +40 C *Max. Working
pressure 10 bar *Continuous
service S1
Performance: *Flow rate up to
160 l/min (9.6 m/h) *Head up

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Application:
Manometric
suction lift up to 7 m *Liquid
temperature between -10C
and
+40C
*Ambient
temperature up to +40C *Max.
working
pressure
10
bar
*Continuous service S1
Performance: Flow rate up to
180 l/min (10.8m/h) * Head up
to 103 m
Application:
Manometric
suction lift up to 7 m *Liquid
temperature between -10C and
+90C *Ambient temperature
between -10C and +40C *Max.
working pressure 10 bar (6 bar
for 2CP25/130N) *Continuous
service S1
Performance: Flow rate up to
450 l/min (27 m/h) *Head up to
Application: Manometric suction

Application:
1.5
m
maximum
lift up to 7 m Liquid temperature
immersion depth 2.Maximum liquid
between -10 C and +90 C
temperature +40C 3.Passage of
Ambient temperature between -10
suspended solids up to 10 mm
C
and +40 C
Application:
1.10Max.
m working
maximum4.Suction down to 21 mm above
Application: 1.Maximum liquid
pressure
10 bar
Continuous
service
immersion
depth
2.Maximum
liquidground level 5.180 mm minimum
temperature +35 C 2.Maximum
S1
temperature +50 C (Maximum liquidimmersion depth for continuous
sand content 100 g/m 3.100 m
service
temperature
+90*Flow
C forrate
a maximum
Performance:
up to of immersion limit 4.Installation: 3 minutes intermittent service) 3.SolidsPerformance: 1.Flow rate up to 300
vertical - horizontal, with the
passage: - up to 20 mm for RX 2/20,
following limits: up to 12
RX 3/20 - up to 40 mm for RX 4/40,
stagesor 11 kW 5.Starts/hour: 20
RX 5/40 4.Suction level: - 25 mm
at regular intervals 6.Minimum
above ground level for RX 2/20, RX
flow rate for motor cooling 16
3/20 - 50 mm above ground level for
cm/s (0.5 m/s for 30 kW)
RX 4/40, RX 5/40 5. Continuous service
7.Continuous service S1
S1
Performance: 1.Flow rate up to 380
Performance: 1.Flow rate up to

1000 l/min (60 m/h) 2.Head up

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Chapter 3
AIS in Modern
Business
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11
3.1 Introduction
An accounting information system (AIS) is a system that collects,
records, stores and process data to produce information for decision
makers by Romney. An accounting information system is generally a
computer-based method for tracking accounting activity in conjunction
with information technology resources. The resulting statistical reports
can be used internally by management or externally by other interested
parties including investors, creditors and tax authorities.
AIS can be a very simple paper-and-pencil based manual system, a very
complex system using the very latest in computers and information
technology, or somewhere these two extremes. Regardless of the
approach taken, the process is the same.
Characteristics of useful Information:
Relevant: Information is relevant if it reduces uncertainty decision

makers ability to make predictions, or confirms or corrects their
prior expectations.
Reliable: Information is reliable if it is free from error or bias and

accurately represents the events or activities of the organizations.

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Complete: Information is complete if it does not omit important

aspects of the underlying events or activities that it measures.
Timely: Information is timely if it is provided in time for decision

makers to make decisions.
Understandable: Information is understandable if it is presented

in a useful and intelligible format.
Verifiable: Information is verifiable if two knowledgeable people

acting independently would each produce the same information.
Accessible: Information is accessible if it is available to users

when they need it and in a format they can use.
3.2 Components of AIS

AIS cant do anythings without any its users. So the AIS and the people
who use it must still collect, enter, process, store, and report data and
information. The paper and pencil or the computer hardware and software
are merely the tools used to produce the information.
Accounting information systems are composed of six main components:
People: users who operate the systems and perform various

functions.
Procedures
and
instructions: both manual and automated,
processes involved in collecting, processing, managing and storing

the data about the organizations activities.
Data: data that is related to the organization and its business

processes
Software: application that processes the organization s data
Information
technology
infrastructure: The
actual physical
devices(computer, peripheral devices, and network communication

devices)and systems that allows the AIS to operate and perform its
functions(to
collect,
store,
process,
and
transmit
data
and
information)
Internal controls and security measures: That safeguards or

secures the data in the AIS.

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3.3 How AIS can add value to an organization

As a support activity, the AIS adds value by providing accurate and
timely information so the five primary value chain activities can be
performed more effectively and efficiently. Well-designed AIS can do
this by:
Improving the quality and reducing the cost of products or
services.
Improving efficiency. Well-designed AIS can make operations more
efficiently by providing more timely information.

Sharing knowledge. A well designed AIS can make it easier to
share knowledge and expertise, perhaps thereby improving
operations and even providing a competitive advantage.

Improving the efficiency and effectiveness of its supply chain.
Improving the internal control structure. Security, control and
privacy are important issue in todays world. AIS with the proper
internal control structure can protect systems from problems such
as fraud, errors, equipment and software failures and political
disasters.
Improving decision making.
3.4 Principles of AIS

A sound accounting information system must be flexible and coat
beneficial as these are the principles of an effective AIS. Here in below
those are described briefly.
Flexibility of Accounting Information System
Flexibility means that the system should be so much flexible that it can
be changed when necessary. Flexibility helps the organization to perform
its task easily and quickly as they want
Organizational Structure should flexible for improving their
activities in different situation.

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Organizational Data structure should be very easy which will

help the employee to cope up with the system easily for the long
run success.
Data Recovery system must be simple which will help the
employee to recover the lost data or previous data.
Cost effectiveness of Accounting Information System
Cost beneficial means the benefits of information must outweigh the cost
of providing it. Cost effectiveness indicates the minimizing process of
cost which helps to maximize the profit of an organization.
Data Documentation system is the process how data are
maintained and stoke for future.
Data Storing should be less costly because it reduces the level of
profit.
Maintenance of Data Structure is the most costly activities in
every organization so they should maintain is chiefly.
Usefulness of Accounting Information System
Some time a success of a company depends on the usefulness of AIS. If

AIS provides more useful data or information with a proper way & also
in time, than it will help the organization to achieve the goal easily.
Here in below I provide some information about usefulness of AIS in
Private company sector.
Relevant data means if data reduces uncertainty decision
makers ability to make predictions, or confirms or corrects their
prior expectations as they demand.
Reliability of data means if it is free from error or bias and
accurately represents the events or activities of the organizations
Accuracy of data means if it is free from error or bias and
misrepresentation
Timely data means if it collected and provided in time for
decision makers to make decisions and for users generating
information.
3.5 Concepts of AIS among Private sector in Bangladesh

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A proper structural Accounting Information System (AIS) is so important

part of an organization. All private organization maintain separate
department for Accounting Information System (AIS). The name of their
department is FAD. For performing their activities they need the help of
Information Technology Department (IT). IT department help them by
providing computerized and technological support. FAD work centrally
for connecting all branches of organization. They maintain a distributed
information system. Every branch maintain separate server for
updating information. FAD collects that information via different
software and manually generates information as they need. But some
information is collected through Fax, Phone and Letter because of lack
of their technological opportunity. On the other hand sometime a
branch collects some information from FAD by the same way but there
are some restrictions for providing information to the user.
After collecting the information they manually generate information.
That information is in printed copy. They prepared two copy of data and
then one copy of data are send to the Audit Committee and others are
preserved for evidence. After auditing the data the audit committee
make information themselves and again sends it to the FAD division.
Then they analysis the information and publish or provide the
information to the user. By this way the FAD works and maintains all
accounting rules & regulation with help of information technology. In the
view of that it is easy to say that Accounting Information System is
totally mixed with their system and tiring to speed up their system for
achieving the success. So it can be said that they maintain their AIS in a
proper structural way within a separate department.
Some information about FAD department is given below.
Name of the department: Financial Administration Division (FAD)
Activities of the Department:

Data collection
Data maintenance
Data management
Data control

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Information generation
Strength of the Department:

Experienced employee
Stable structure
Good internal controlling syste
Maintain GAAP
Internal audit committee
Limitation of the Department:

It maintains distributed data structure which increases the
risk of data hacking and data lost.
It maintains both manually (printed) and computerized
system that why it is too costly for them.
Some time data are collected manually (through mail,
messenger etc) so false data can make error in report.
They process data manually (on hand calculative processing)
thats why it needs much time for preparing report for user.
Future Plan: Give a new technological structure, more features and

services in organizational sector.
Relation of FAD with network:

Network connects all servers within a family. They maintain a
distributed networking system where every server is connected each
other. FAD maintains a server which they use for collecting data from
several servers as they need for generating information or preparing
report for external or internal user.
Accounting to an old saying-measurement affects behavior. This
means that employees tend to focus their effort primarily on those
takes that are measured and evaluated. Budgets are financial planning
tools where performance reports should be developed on the basis of
responsibility accounting. We know that different companies used
different techniques for their internal or external reporting. Most of

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them used more than one technique. In below I describe some activities
of reporting system FAD use for them.
Internal reporting:
Daily: Most of the activities are performed as daily basis like cash
transaction, every day expanse(e.g. entertainment of client, fuel
for generator), online transaction}
Monthly: Salary sheet, equipment requisition,
Quarterly: They prepare quarterly financial report for internal

audit body.
Yearly: They prepare yearly budget report, financial report.
Performance report: In every half of the fiscal year employees

bound to provide their performance report to HR department. And
every department prepares a half yearly performance report about
their activities and provides it to governing body.
External reporting
Yearly: They prepare tax report & financial report.
Others: Some time they prepare different types of report as on

demand of client and government.
3.6 Cost effectiveness of Accounting Information System

Cost beneficial means the benefits of information must outweigh the
cost of providing it. Cost effectiveness indicates the minimizing process
of cost which helps to maximize the profit of an organization. If AIS is
more costly than it reduce profit ratio of an organization but if it
effective and efficient and need low cost to maintain than it help the
organization many way. Like it maximize the profit, reduce the time for
handling the client and generating information in low cost.
Data
documentation:
Private
organization
maintains
the
printed and computerized data documentation control system in

this regard they need to store huge data for daily activities that
are too costly for them.

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Data storing: Private organization have many branches, every

branch maintain several server of computerized data storing and
store house for printed document storing.

Maintenance of data structure: Private organization maintains
a fixed data structure which is less costly and effective for them.

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19
Chapter 4
AIS Explore in
Pedrollo
4.1 Accounting information system

AIS Is a system of collection, storage and processing of financial and
accounting data that is used by decision makers. An accounting
information system is generally a computer-based method for tracking
accounting activity in conjunction with information technology resources.
The resulting statistical reports can be used internally by management or
externally by other interested parties including investors, creditors and

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20
tax authorities. It includes education in the latest database management

techniques and system modeling approaches, and provides the Internet
implementation experience necessary to practice systems development in
today's technological environment. Pedrollo nk follow these procedures of
AIS are as follows:
R A
e o
vt
eI
nr
u t
Se
u
n
i
c
g
o
y
n
s
o
t
4.1.1 Revenue
Revenue process includes:
Sales process
Purchase order: A purchase order (PO) is a commercial document

issued by a buyer to a seller, indicating types, quantities, and
agreed
prices
for
products
or
services.
Bangladeshi
pumps

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21
manufacturing Pedrollo nk ltd. submits a purchase order of 500 pcs
of casing to Micro Fiber Company Limited.

Price Verification: Micro fiber company ltd (seller) submit a price
quotation of Tk 1000 per pcs to Pedrollo nk ltd. (buyer). Buyer
verifies the price and confirm the final price.

Sales order: A sales order records the customer's originating
purchase order which is an external document. The customer's PO is
the originating documents which trigger the creation of the sales
order. In a manufacturing environment, a sales order can be
converted into a work order.

Credit Limit: As a regular customer, The Pedrollo nk ltd. gets a
credit facility of Tk 7,00,000 from Micro Fiber company ltd. After
receive the PO, the company immediately verify the buyers credit
limit for future operations.

Inventory & sales preparation: After checking the credit limit,
the seller checks the availability of the product in warehouse. If the
product is available and matches with the buyers sample, then the
seller prepares the goods for shipment as per the buyers
requirement.
Prepare shipment documents: Seller sends the goods to the
buyer after preparing the invoice and packing list. After that seller
update the sales record accordingly.

Update accounts receivables & General Ledger: Seller updates
the accounts receivable as per the sales record and prepare monthly
statement and general ledger accounts.
Sales return process
Receive goods from customer: Buyer (Pedrollo nk ltd) returns

50pcs of defective goods to the seller. The billing departments of

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seller match the return goods with the original sales invoice while
receive.
Warehouse & Inventory: Warehouse checks the condition of the
returned goods. If it is in repairable condition then repair it and send
to the buyer or update the inventory. If it is not in repairable
condition, it consider as scrap.

Update sales record: After receiving the sales return, seller
update the sales return record and prepare a credit memo and send
it to customer.
Update account receivable: After the sales return, seller updates
the account receivable accounts, cash record and general ledger.
Cash collection process
Cash receive: Seller receives cash/cheque payment from buyer

and prepare a cash receipt journal while it match with the original
sales invoice.
Update account receivable: After receiving the cash payment,
seller updates the accounts receivable accounts and general ledger.
4.1.2 Expenditure
Expenditure process includes:
Purchase Process
Where
information
technology
is
not
heavily
ingrained
Traditional
Purchasing processes tend to be characterized by high levels of

bureaucracy, encumbered with manual authorization (often requiring
multiple
signatures
independent
of
the
order
value.),
slow
communications and a focus on unit price rather than long term

commodity arrangements.
The diagram below provides an example of a traditional purchasing process.

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Authorized
purchase
requisition
Select vendor
Prepare purchase
order and send to
vendor
Receive goods (if

match) and
prepare receiving
record
Receive invoice
from vendor and
Update inventory
Update account
payable
Purchase return
(if need)
Update inventory
record (after
return)
Update account
payable
Update general
ledger
23

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Purchase requisition & Authorized purchase requisition: A

purchase requisition provides authorization for the Procurement
Department to initiate a purchasing transaction. The requisition
form is available from the Procurement Department, and contains a
complete list of information that is required to complete a
purchasing transaction.
Vendor selection: The vendor selection process can be a very
complicated.
Purchase order: A completed purchase requisition will be reviewed
and approved in the Procurement Department according to the
organizations policy for requisition approval. Once the requisition
has been approved, it will be used to create a Purchase Order (PO).

Receive goods: Vendor prepares to supply the goods and service
to the buyer after receives the PO. Buyer prepare a receiving record
after receive the goods.

Update inventory record: Buyer receive invoice from seller and
update the inventory records.

Update accounts payables: Buyer updates the accounts payable
after the new purchase record.

Sales return & update accounts payables: Buyer updates the
accounts payable if any purchase return occur.

Update General Ledger: Buyer updates the general ledger as per
the purchase records.
Purchase return process

A purchase return occurs when a buyer returns merchandise that it has
purchased from a supplier.
Rejected goods return from customer: Goods can be

return to vendor for various reasons with a authorization of return.

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Return goods with a debit memo: Return goods after

match with the purchase invoice and send a debit memo to the
vendor.
Update account payable, inventory record & general
ledger:
Update account payable and inventory record after
receiving refund or credit memo from vendor against return.
Cash disbursement process

Cash disbursement means the payment of money against purchase.
Identify the due invoices: Identify the vendors invoices which
payment is still due and prepare for payment.

Payment to vendor and update the cash record: Payment of
the vendor against the due payments after cheque signs and
updates the cash records.

Update account payable and general ledger: Account payable
and general ledger accounts will upgrade after payment to vendor.
Payroll process
The payroll is the amount of money that a company pays its employees at
any given time. Sometimes every two weeks, or sometimes once every
month
Time sheet submission & checking: Employee submits there

time sheet where there working time was recorded. Authority will
approve that after checking/correction the working hours.

Prepare payroll register & voucher: The payroll register will
prepare as per the corrected working hours.

Payroll voucher and transfer fund in payroll bank: Payroll
voucher will create as per the payroll register. The fund will transfer
to the payroll bank and update general ledger.

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4.1.3 Conversion
Planning: Business planning is a process that involves the creation of a

mission or goal for a company. The process of business planning can be
very broad, encompassing each aspect of the operation.
Resource Management: The process of using a company's resources in

the most efficient way possible is considered as resource management.
These resources can tangible resources such as goods and equipment,
financial resources, and labor resources such as employees. Resource
management can include ideas such as making sure one has enough
physical resources for one's business.
Logistics: Logistics is defined as a business planning framework for the

management of material, service, information and capital flows.
3.1.4 Administration
Capital:
Capital is the money that is going to be invested in a business. Some of
the money will come out of from personal investment. Some of the money
may come from another source of financing, such as a bank or a small
business center loan. Thats the capital for starting a business. Knowing
how much capital needs to start a business will be a deciding factor on the
type of business might be start.
Investment:

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Investment encompasses a wide variety of funding options. While funding

for capital investment is generally in the form of common or preferred equity
issuance, it may also be through straight or convertible debt. Funds invested in a
firm or enterprise for the purposes of furthering its business objectives. Capital
investment may also refer to a firm's acquisition of capital assets or fixed assets
such as manufacturing plants and machinery that is expected to be productive
over many years.
General Ledger:
The general ledger is a collection of the group of accounts that supports the
value items shown in the major financial statements. It is built up by posting
transactions recorded in the sales daybook, purchases daybook, cash book and
general journals daybook. The general ledger can be supported by one or more
subsidiary ledgers that provide details for accounts in the general ledger. For
instance, an accounts receivable subsidiary ledger would contain a separate
account for each credit customer, tracking that customer's balance separately.
This subsidiary ledger would then be totaled and compared with its controlling
account (in this case, Accounts Receivable) to ensure accuracy as part of the
process of preparing a trial balance.

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Chapter 5
Standard
Accounting
Practices
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5.1 Introduction
In most organizations, the accounting function is the single largest user
of IT. All systems that process financial transactions impact the
accounting function in some way. As end users, accountants must
provide a clear picture of their needs to the professionals who design
their systems. The principal cause of design errors that result in system
failure is the absence of user involvement. Standard accounting practical
by Pedrollo nk ltd. are as follows:
5.1.1 Journal record
In this part described about a companys regular transactions. According
to the all the most common financial transactions are economic
exchanges with external parties.
Pedrollo nk Ltd.
General Journal
Date
Jan.
2014
Code
1, A100
0
Voucher
No
D0F 101
A200
0
S100
0
Jan.
2014
3, I140
00
Particulars
Ref
:
Debit
Cash
1,500,0
00
Bank
500,00
0
Capital
D0F 105
(Starting business
with cash & bank)
Prepaid office rent
Credit
2,000,0
00
60,000

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A100
0
Jan.
2014
5, A900
0
Cash
D0F 108
A100
0
L100
0
Jan.
2014
9, I300
0
2014
10, I800
0
2014
11, A600
0
D0F 110
2014
15, I600
0
D0F 115
D0F 117
(raw materials
purchase on credit)
Advertisement
(advertisement
paid by cash)
Furniture
D0F 127
(furniture
purchased by cash)
Office supply
200,00
0
10,000
10,000
150,00
0
150,00
0
55,000
Bank
(office supply
purchased with
check)
Insurance policy
2014
A100
200,00
0
Cash
D0F 132
23,
(machine purchase
with cash and
credit)
Raw materials
Cash
A200
0
Jan.
200,00
0
100,00
0
A/C payable
A100
0
Jan.
300,00
0
A/C payable
A100
0
Jan.
60,000
Cash
L100
0
Jan.
(Office rent paid in

Advance)
Machineries
Cash
30
55,000
100,00
0
50,000

Ltd.
0
A200
0
Jan.
2014
31, I700
0
Bank
D0F 139
I140
00
Feb.
2014
3, A400
0
Feb.15,
2014
A100
0
D0F 145
2014
L100
0
D0F 151
2014
I400
0
A100
(adjusting
transaction)
Inventory
10,000
30,000
(Inventory
purchased by
check)
Salary
30,000
25,000
Cash
D0F 159
(Salary paid by
cash)
Cash
A/C receivable
25,000
200,00
0
50,000
Sale
D0F 167
A100
0
Feb.28,
10,000
Bank
A300
0
I100
0
Feb.25,
50,000
Prepaid office rent
A200
0
Feb. 10, I500

0
2014
A100
0
(Insurance paid by
cash & bank)
Office rent
(sales by cash and

account)
A/C payable
250,00
0
100,00
0
Cash
D0F 173
Adjusting
transaction)
Wage
Cash
31
100,00
0
10,000
10,000

Ltd.
32
Feb.28,
2014
I700
0
D0F 180
I140
00
Mar. 10, I500

0
2014
A100
0
Mar. 15, A700

0
2014
A100
0
Mar. 27, A100

0
2014
A300
0
I100
0
Mar. 31, I700

0
2014
I140
00
Apr.
2014
5, I600
0
L100
0
(wage paid by
cash)
Office rent
10,000
Prepaid office rent
D0F 188
(adjusting
transaction)
Salary
10,000
25,000
Cash
D0F 197
(salary paid by
cash)
Computer
25,000
30,000
Cash
D0F 208
(computer
purchased by cash)
Cash
A/C receivable
30,000
320,00
0
80,000
Sales
D0F 214
(sales by cash and

account)
Office rent
400,00
0
10,000
Prepaid office rent
D0F 221
(adjusting
transaction)
Office supply
A/C payable
(O/S purchased by
credit)
10,000
15,000
15,000

Ltd.
Apr.
2014
10, I500
0
D0F 229
A100
0
Apr.
2014
25, L100
0
2014
30, I700
0
D0F 236
2014
1, A800
0
D0F 241
2014
9, I500
0
D0F 249
June.
2014
8, A100
0
Adjusting
transaction)
Office rent
100,00
0
10,000
(adjusting
transaction)
Delivery truck
10,000
150,00
0
A/C payable
100,00
0
50,000
Cash
D0F 257
A100
0
May. 31, I700

0
2014
I140
00
100,00
0
Prepaid office rent
L100
0
A100
0
May.
(Salary paid by
cash)
A/C payable
25,000
Bank
I140
00
May.
25,000
Cash
A200
0
Apr.
Salary
(truck purchased
with cash &
account)
Salary
25,000
Cash
D0F 264
(Salary paid by
cash)
Office rent
25,000
10,000
Prepaid office rent
D0F 272
(adjusting
transaction)
Cash
33
10,000
50,000

Ltd.
A300
0
A/C receivable
34
50,000
(adjustment entry)
June. 10, I500
0
2014
A100
0
June. 30, I700

0
2014
I140
00
July.
2014
3, I140
00
D0F 279
2014
9, I500
0
D0F 284
(Salary paid by
cash)
Office rent
25,000
10,000
Prepaid office rent
D0F 292
(adjusting
transaction)
Prepaid office rent
10,000
60,000
Cash
D0F 305
A100
0
July. 20, A300

0
2014
I100
0
25,000
Cash
A100
0
July.
Salary
(Office rent paid in

Advance)
Salary
60,000
35,000
Cash
D0F 314
(Salary paid by
cash)
A/C receivable
35,000
300,00
0
Sale
300,00
0
(sales on account)
July. 31, I700
0
2014
I140
00
Aug.
2014
8, I500
0
D0F 323
Office rent
10,000
Prepaid office rent
D0F 331
(adjusting
transaction)
Salary
10,000
35,000

Ltd.
A100
0
Aug. 25, S100

0
2014
A100
0
Aug. 31, I700

0
2014
I140
00
Sep.
2014
5, I300
0
Cash
D0F 339
2014
6, I900
0
D0F 345
Sep. 30, I700

0
2014
I140
00
50,000
(withdraw from the

capital)
Office rent
50,000
10,000
Prepaid office rent
D0F 356
(adjusting
transaction)
Raw materials
10,000
100,00
0
Bank
D0F 362
A100
0
Sep. 10, I500

0
2014
A100
0
35,000
Withdraw/ Cash
A200
0
Sep.
(Salary paid by
cash)
Capital
(raw materials
purchase with
check)
Transportation
100,00
0
10,000
Cash
D0F 369
(transportation
cost paid by cash)
Salary
10,000
35,000
Cash
D0F 378
(Salary paid by
cash)
Office rent
Prepaid office rent
(adjusting
transaction)
35
35,000
10,000
10,000

Ltd.
Oct.
2014
2, I100
00
D0F 389
A200
0
Oct.
2014
10, A800
0
2014
31, I700
0
DOF 395
2014
8, I500
0
DOF399
Nov. 30, I700

0
2014
I140
00
Dec.
2014
1, I120
00
35,000
(Salary paid by
cash)
Office rent
35,000
10,000
Prepaid office rent
DOF 406
A100
0
Nov. 21, A100

0
2014
A300
0
I100
0
(machinery
maintenance paid
by check)
Delivery truck
20,000
Cash
I140
00
Nov.
20,000
Bank
A100
0
Oct.
Machinery
maintenance
(adjusting
transaction)
Salary
10,000
35,000
Cash
DOF 409
(Salary paid by
cash)
Cash
A/C receivable
35,000
200,00
0
150,00
0
Sale
DOF 414
(sales on account,
bank & cash)
Office rent
350,00
0
10,000
Prepaid office rent
DOF 423
(adjusting
transaction)
Tax
36
10,000
80,000

Ltd.
A100
0
Cash
37
80,000
(tax paid by cash)

Dec.
2014
5, I500
0
DOF 431
A100
0
Dec. 20, I130

00
2014
A100
0
Dec. 31, I700

0
2014
I140
00
Dec. 31, I500

0
2014
L100
0
Salary
35,000
Cash
DOF 447
(Salary paid by
cash)
Profit distribution
35,000
100,00
0
Cash
DOF 452
(profit distributed
by cash)
Office rent
100,00
0
10,000
Prepaid office rent
DOF 466
(adjusting
transaction)
Salary
10,000
35,000
A/C payable
35,000
(salary is not paid

yet)
Total
5,570,0
00
5,570,0
00
5.1.2 Cash book

Larger firms usually divide the cash book into two parts. The first part is
the cash disbursement journal that records all cash payments, such as
accounts payable and operating expenses. The second part is the cash
receipts journal, which records all cash receipts, such as accounts
receivable and cash sales.

Ltd.
38
Pedrollo nk Ltd.
Date
3-Jan
Cash book
For the year ending December 31,2014
Code
Voucher No
Particulars
Credit
I14000
D0F 105
prepaid office
60,000
5-Jan
10-Jan
11-Jan
23-Jan
10-Feb
25-Feb
28-Feb
10-Mar
15-Mar
10-Apr
1-May
9-May
10-Jun
3-Jul
A9000
I8000
A6000
A5000
I5000
L1000
I4000
I5000
A7000
I5000
A8000
I5000
I5000
I14000
D0F
D0F
D0F
D0F
D0F
D0F
D0F
D0F
D0F
D0F
D0F
D0F
D0F
D0F
108
115
117
132
151
167
173
188
197
229
249
257
279
292
9-Jul
8-Aug
25-Aug
6-Sep
10-Sep
10-Oct
8-Nov
1-Dec
5-Dec
20-Dec
31-Dec
I5000
I5000
S1000
I9000
I5000
I5000
I5000
I12000
I5000
I13000
D0F 305
D0F 331
D0F 339
D0F 362
D0F 369
DOF 395
DOF 406
DOF 423
DOF 431
DOF 447
rent
machinery
Advertisement
Furniture
Insurance policy
Salary
A/C payable
Wage
Salary
Computer
Salary
Delivery truck
Salary
Salary
prepaid office
200,000
10,000
150,000
50,000
25,000
100,000
10,000
25,000
30,000
25,000
50,000
25,000
25,000
60,000
rent
Salary
Salary
Capital
Transportation
Salary
Salary
Salary
Tax
Salary
Profit distribution
C/B
Total
35,000
35,000
50,000
10,000
35,000
35,000
35,000
80,000
35,000
100,000
975,000
2,270,000
5.1.3 Trial Balance

Trial balance is the equal balance part for the accounting process. An
accountant should provide a balanced trial balance result to made a next
step of preparing income statement of an organization and as well as the
balance sheet of an organization. Based on that all revenue and

Ltd.
39
expenditures are included for calculating this part. The source of

information is the relievable for all transactions collected from ledger that
ready to disclose the financial information for the both external and
internal purposes. All tracked of transactions posted into two different
sides. One side is debit items and another side is called credit items side.
It actually prepared for monthly, quarterly and common in yearly.
Code
A1000
Pedrollo nk Ltd.
Trial Balance
For the year ending December 31, 2014
Particulars
Debit
Credit
Cash
975,000
-
A2000
I1000
A3000
A4000
I3000
I6000
I7000
A5000
I8000
A6000
I4000
I5000
I9000
I10000
A7000
A8000
A9000
I12000
S1000
L1000
I13000
Bank
Revenues/sales
Accounts receivable
Inventory
Raw materials
Office supply
Office rent
Insurance policy
Advertisement
Furniture
Wage
Salary
Transportation
Machinery maintenance
Computer
Delivery truck
Machinery
Tax
Capital Stock
Accounts Payable
Profit distribution
Total
145,000
530,000
30,000
300,000
70,000
120,000
100,000
10,000
150,000
10,000
370,000
10,000
20,000
30,000
150,000
300,000
80,000
1,300,000
-
1,950,000
250,000
100,000
3,500,000
3,500,000
5.1.4 Profit and loss accounts

Income Statement is the set of all incomes and expenditures. That means
all revenues and expenses these are incurred for maintaining the business

Ltd.
40
operations are given in the income statement to find out the excess of
income over expenditure or excess of expenditure over the income. It
actually prepared for monthly, quarterly and common in yearly. The all
period it would be better that the balance of excess of income over
expenditure for any company. From this stage the only result forwarded
the next stage the preparing of Balance Sheet. Through this account this
item going to next year or period. It shown in the Balance Sheet under the
retained earnings on stockholders equity.
Code
I 1000
I 4000
I
I
I
I
I
I
I
I
7000
8000
3000
9000
10000
6000
12000
13000
Pedrollo nk Ltd.
Profit and loss accounting
Particular
Amount
Revenue/sales
Total income
Expenditure (salary and benefits)
Wages
10000
Salary
370000
Office rent
120000
Advertisement
10000
Raw materials
300000
Transportation
10000
Machinery maintenance
20000
Office supply
70000
Tax
80000
Profit distribution
100000
Total expenditure
Excess of income over expenditure
Amount
1300000
1300000
1090000
210000
5.1.5 Retained earnings

Retained earnings are the increasing balance part for the accounting
process. An accountant should provide a balanced Retained earnings
result to made a next step of preparing Balance Sheet of an organization
and as well as the new Retained earnings of an organization. Based on
the result of income statement that account is included for calculating
this part.

Ltd.
Code
S 2000
Pedrollo nk Ltd.
Statement of Retain Earning
Particular
Beginning RE
Net operating income
Dividend
Ending RE
Retain earning
41
Amount
310000
0
0
100000
210000
5.1.6 Balance Sheet

Balance sheet is the financial feeling hart of an organization. This part is
completed with the two systems. Like one British process and or
American process. Both processes have two different sides. One is called
assets side and another side is called liabilities and owners equity/
stockholders equity. Companies are all current assets and as well as
fixed assets are recorded under the assets column, such as cash deposit,
inventory, land, buildings etc. On the other hand all the companys
liability and equity recorded under the liabilities and owners equity/
stockholders equity column, such as accounts payable, common stock,
retained earnings etc.
Pedrollo nk Ltd.
Balance sheet
31, December 2014
Code
Amount
Particular
Assets (current assets)
Cash
1000
A
Bank
145000
2000
A
A/C Receivable
530000
3000
A
Inventory
30000
957000
Amount

Ltd.
4000
A
Insurance policy
42
100000
5000
Total current assets
178000
0
Fixed assets
Furniture
150000
6000
A
Computer
30000
7000
A
Delivery truck
150000
8000
A
Machinery`
300000
9000
Total fixed assets
Total assets
630000
241000
0
Liability and owners equity (current

L
liability)
Accounts payable
250000
Shareholders equity
Capital stock
Retain earning
1950000
210000
1000
S1000
S
2000
Total liability and owners equity
241000
0

Ltd.
Chapter 6
Conclusionary
Aspects
43

Ltd.
44
6.1 Major Findings

Major Findings:
This study has focused on the computerized accounting information
system in Pedrollo nk ltd. The main findings about the study are given in
below.
They maintain separate department for Accounting Information

System (AIS). The name of their department is FAD. FAD has some
problem like, distributed data structure, manual data processing
and risk of security. But it has also some strength like, good
internal controlling system, internal audit committee and stable
org. structure.
The Pedrollo nk maintain both manual and computerized system

for performing the daily operations of AIS.
The computerized transaction processing system is categorized

into software and web based system.
In Pedrollo nk, they use self developed software for performing

transaction and they also use local and foreign software for
preparing report and it also helps to performing other activities.
They use many different main software that use to performing

transactional
activities
and
transferring
data.
It
has
some
advantage like, decentralized system, minimum risk of data lost

and speedy transaction system. And the negative side is it needs
much time to collect information, risk of data hacking and it has
no auto data processing system.
They maintain website for their internal and external user for
performing transaction and providing lots of information to them.
The clients data are processed in both batch and real time
processing system.

Ltd.
45
Daily, monthly, quarterly, yearly and performance report are

prepared for internal and external reporting.
Pedrollo
nk
maintain
stable
organizational
structure,
complicated manual and computerized file structure, easy data

recovery system, costly data documentation & storing system.
Their AIS can also provide relevant and reliable datas.
6.2 Recommendations
The following points are recommended after the study.
Pedrollo nk maintain a fixed organizational and data structure

which can create problem for new employee to cope up with the
existing system.
They use decentralized web based transaction and data storing

system, which create problem for financial administration division
(FAD) for collecting data, so they should use centralized system for
increasing the effectiveness of AIS.
The main software different customized operating software which

is not effective enough for generating report or information, so
they should develop new software for better performance.
They should give more emphasize on their manual (mail & fax)
data transferring system.
They should increase more safety for protecting data hacking,

error and misuse of data.

Ltd.
46
6.3 Conclusion
The accounting information system of Pedrollo nk ltd. is in the primitive
stage. They have separate AIS department. From the above analysis
and discussions, it may conclude that Pedrollo nk made their operation
through combination of both manual and computerized system. They
use computerized system generally for operating, data transferring and
storing purposes. But the impact of computerized AIS is not significant.
Thought they maintain a web-site, but all the transactions are not web
based. They regularly prepare financial statements for evaluation of
performance and for external reporting and performance evaluation
they prepared financial statements and published annually. The users of
AIS were satisfied about their AIS and internal control system. They
record and collected their source document through computer. They
think their AIS are cost beneficial and flexible. They use real time &
batch processing for updating their information. But their AIS were not
so effective to provide information.
They
should
give
more
emphasis
on
internal
control
system,
safeguarding assets and information generation or reporting system. In

case of external reporting and internal reporting their actives have lots
of gap.

Ltd.
47
References
Marshall B. Romney, Paul John Steinbasrt, Accounting Information System (10 th Edition)
(February 2006), Pearson Prentice Hill.
Paul Bocij, Andrew Greasley, Simon Hickie, Business information system: technology,
development and management (1st Edition),(2009), Pearson Education, Ltd.
BRIAN Williams, Stacey C. Sawyer, Using Information Technology (9 th Edition), (2010),
McGraw Hill.
Sumon Das, Shilpi Das, Accounting & Auditing, the Bangladesh Accountant, OctoberDecember 2008.
Website of pedrollo
Website of wikipidea.

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OCP on Accounting Information System of Pedrollo NK

OCP on Accounting Information System of Pedrollo NK

The OCP program is an essential part of Masters of Business

experiences. For the requirement of my course I was assigned to work on

Administration (MBA) student only

Objectives of the study

The main objective of the study is to explore the accounting information

To discuss about AIS & its importance in modern business.

Methodology of the study

Methods followed to perform a job or conducting activities to complete a

OCP on Accounting Information System of Pedrollo NK

Secondary sources of data:

Internal: Internal Reports of various records of the company,

Other published documents and Website.

1.4 Scope of the study

Lack of opportunity to visit IT & Accounts department more than

The main constrain of the study was in sufficiency of information,

Due to time limitation many of the aspects could not be discussed

Some information that are skipped by the respondent.

OCP on Accounting Information System of Pedrollo NK

OCP on Accounting Information System of Pedrollo NK

2.1 Background of Pedrollo

Longer product life

Minimum maintenance & countrywide service centers

Widest range of products these four unique features made our

Our motto is to select the RIGHT pump as per users requirement

OCP on Accounting Information System of Pedrollo NK

of the right product helped us greatly to gain the confidence of our

2.2 Vision and values

People: Be a great place to work where people are inspired to be

OCP on Accounting Information System of Pedrollo NK

Portfolio: Bring to the world a portfolio of quality pumps that

Partners: Nurture a winning network of customers and suppliers,

Planet: Be a responsible citizen that makes a difference by

Profit: Maximize long-term return to shareowners while being

Leadership: The courage to shape a better future

Collaboration: Leverage collective genius

Accountability: If it is to be, its up to me

Passion: Committed in heart and mind

Diversity: As inclusive as our brands

2.3 Department of Human Resource

Recruitment, Selection & Placement of the employees.

organization as well as the goal of department-

OCP on Accounting Information System of Pedrollo NK

2.4 Products line

OCP on Accounting Information System of Pedrollo NK

Application: Manometric suction

Performance: 1.Flow rate up to

OCP on Accounting Information System of Pedrollo NK

OCP on Accounting Information System of Pedrollo NK

Relevant: Information is relevant if it reduces uncertainty decision

Reliable: Information is reliable if it is free from error or bias and

OCP on Accounting Information System of Pedrollo NK

Complete: Information is complete if it does not omit important

Timely: Information is timely if it is provided in time for decision

Understandable: Information is understandable if it is presented

Verifiable: Information is verifiable if two knowledgeable people

Accessible: Information is accessible if it is available to users

3.2 Components of AIS

People: users who operate the systems and perform various

instructions: both manual and automated,

processes involved in collecting, processing, managing and storing