What Adjustments Should Be Made To The Current Account Books Under The Working Paper Method?

In order to compile the cash flow statement, we need to make some necessary adjustments to the account ledger on the basis of the accounting books system in the past.

The main accounting books that need to be adjusted are: (1) "inventory" account, which can still set up the subsidiary ledger according to the original method, but it is necessary to set up a reference book to register the details of the increase or decrease in the non operating inventory, such as investing in the stock, absorbing the inventory investment of the foreign unit, and consuming the stock in the construction project (after the purchase is changed).

(2) the "PAYABLE wages" and "payable welfare" accounts shall separate the wages and welfare benefits payable to the production and business operators, the wages and welfare costs payable to the management personnel, and the wages and welfare expenses payable to the construction workers, and separately set up their subsidiary ledgers, such as "wages for the production and business personnel", "management salaries", "wages of engineering personnel", or set up multi column subsidiary ledgers.

(3) the "prepaid expense" account should be divided into "withholding rent", "prepaid workshop repair fee", "withholding interest" and "other accrued expenses" subsidiary ledger.

(4) the "prepaid expenses" account should be divided into "ledger", "stamp duty", "workshop repair fee", "other management fees" and "non operating expenses" according to the cost items.

(5) the accumulated depreciation account should be set up according to the nature, including "depreciation in production and operation", "depreciation in the management department", "depreciation in the engineering sector" and "other depreciation carried forward".

(6) the "financial expenses" account should be divided into "operating expenses", "interest expenses" and "other non operating expenses" subsidiary ledgers.

(7) the "non operating income" account should be divided into "fixed assets inventory surplus", "fixed assets net income", "asset re evaluation increment", "acceptance of donation pfer", "tax refund", "other operating income" and other clear ledgers.

(8) the accounts for non operating expenses should be divided into "fixed assets loss", "fixed assets net loss", "asset valuation impairment", "extraordinary loss" and "operating expenses".

(9) "other business income" accounts should be divided into "sales material income", "technology pfer income", "operating lease income" and other clear ledger.

(10) "other business expenses" accounts should be divided into "sales material costs", "technology pfer costs", "operating lease payments", "other taxes and fees" and other clear ledgers.

(11) the "short-term investment" account should be divided into "equity investment" and "creditor's rights investment" subsidiary ledger.

(12) accounts receivable should be separated from the original "other receivable" account, and the accounts receivable should be divided into "purchased dividends" (including the cash dividends paid but not yet received) and the "accrued dividends" ledger.

(13) the "accrued interest" account shall be divided into "purchase interest" (the amount actually paid during the purchase of the bonds, including the interest from the issue date to the purchase date) and the "accrued interest" subsidiary ledger.

(14) the "investment cost" and "profit and loss adjustment" subsidiary ledger should be set up in the "long-term equity investment" account.

(15) the premium should be divided into "bond denomination", "premium", "discount" and "accrued interest" subsidiary ledger.

(16) "fixed assets" account should be divided into "fixed assets purchase and construction pfer", "fixed assets investment into", "accepting donations to fixed assets pfer", "fixed assets sale", "fixed assets scrapping", "fixed assets investment out", "fixed assets donation out" and other clear accounts (or accounting books).

(17) an account book should be set up in the "intangible assets" account, specifically for the purchase of intangible assets, the pfer of self created intangible assets, the pfer of intangible assets, and the sale of intangible assets.

(18) "deferred assets" account can be set up for reference book, recording some non cash payment items, such as one-time use of a large number of low value and easily consumed items.

(19) the "long term loan" account should be divided into "principal" and "payable interest" subsidiary ledger.

In case of non cash assets received in the "paid in capital" account, the registration book should be set up to register the changes in the non cash assets (such as inventory and fixed assets) actually received during the current period. 20.