Design Of Accounting Systems

For the past few years, your client, Omni Care, has operated a small medical practice. Omni Cae's current annual revenues are $945,000. Because the accountant has been spending more and more times each month recording all transactions in a two-column journal and preparing the financial statements, Omni Care is considering improving the accounting system by adding special journals and subsidiary ledgers. Omni Care has asked you to help with project and has compiled the following information.

1. Briefly discuss the circumstances under which special journals would be used in place of a two-column (all-purpose) journal. Include in your answer your recommendations for Omni Care's medical practice.

2. Assume that Omni Care has decided to use a revenue journal and a purchases journal. Design the format for each journal, giving special consideration to the needs of the medical practice.

3. Which subsidiary ledgers would you recommend for the medical practice?

Estimated Frequency per Month Type of Transaction Fees earned on account Purchase of medical supplies on account Cash receipts from patients on account Cash payments on account Cash receipts from patients at time services provided Purchase of office supplies on account Purchase of magazine subscriptions on account Purchase of medical equipment on account Cash payments for office salaries Cash payments for utilities expense 240 190 175 160 120 35 4