However, both funds may be kept with in a single bank account, with the
bank account holding all transactions and balances that applied to both
Expenses are generally a llocated to different accounts for reporting and
manage ment purposes.
For e xa mp le, an account may be kept fo r re funds for damaged or returned
ite ms, wh ile a separate account may be kept for pay ments to suppliers.
Both accounts may be ma intained as separate accounts, although cheques
may be dra wn on a single bank account.
In this case, transactions fro m both accounts would all be processed through
a single bank account.
Accounting systems can become e xt re mely co mp le x, with some la rge
businesses ma intaining thousands of accounts, including sub-accounts within
ma jor accounts.
Alternatives include maintain ing a simple list of accounts, and tagging
individual t ransactions with additional informat ion for reporting purposes.
This arrangement a llo ws for relat ively simple balancing and reconciling of
This approach also allows the possibility of grouping transactions into
categories to provide additional informat ion about the break-up of e xpenses.
18.104.22.168. Other Accounting issues
Accounting is a comple x a rea, and there are many issues that can result in the
financia l statements being quite different to the figures that would be
e xpected fro m the underlying situation.
Accounting standards also vary from t ime to t ime and fro m place to place.
Assets are generally recorded at their cost price, rather than current market