Subject Area Concepts
The financial ledger illustrated in this entity model does not replace the corporate level general ledger. It is intended to provide an intermediate level of financial reporting and control at the business unit group level. It is based on the assumption that each business unit group must be able to "balance its books" at the end of each fiscal period. The financial ledger is composed of business unit group operation-specific accounts that may be reconciled to the corporate general ledger at the home office.
The primary objective of the FinancialLedger entity type is to reconcile the business unit group's current assets: cash and inventory. As the business unit group is presumed to be a microcosm of the retail enterprise, the same principles underlying this ledger can be employed within the design of an enterprise-level general ledger.
The FinancialLedger entity type summarizes and retains the financial results of following transactions and transaction line items:
•The gross sales which include tax and are net of returns;
•Discounts which comprise any allowances permitted to employees and customers;
•Accounts receivable which normally encompass customer accounts and any form of deferred payments;
•Accounts payable which can be categorized into three groups:
❖Liabilities such as gift certificates outstanding and customer deposit payments;
❖Sales taxes collected in the RetailTransaction that need to be paid to a TaxAuthority; and
❖Payments to suppliers.
•Miscellaneous income that comprises any income attributed to the selling activity, including leased department receivable and payments for mounting certain in-store promotions, which is typical, for example, within the cosmetic department;
•Miscellaneous expenditures that cover local maintenance, such as cleaning the sales floor, or the purchase of incidentals;
•Cost of goods which is the the cost of merchandise received plus transfers in, minus transfers out, minus return to vendors ; and
•The current inventory value that is derived from the Item InventoryLocation based StockLedgerAccount.