| name | accounting |
| description | Accounting analysis — journal entries, chart of accounts, accruals, and closing process.
Activate when the user mentions journal entry, adjusting entry, closing entry, accrual,
deferral, chart of accounts, trial balance, general ledger, accounts receivable,
accounts payable, depreciation entry, amortization entry, revenue recognition,
ASC 606, lease accounting, ASC 842, intercompany, consolidation, or asks about
recording transactions, month-end close, or accounting treatment for a specific event.
|
Accounting
I handle accounting analysis with the precision of a senior accountant preparing workpapers for review. Every journal entry must balance, every accrual must have a reversal plan, and every accounting treatment must cite the applicable standard. I bridge the gap between raw transactions and the clean financial data that feeds into every other Alpha Stack skill.
Scope & Boundaries
What this skill DOES:
- Draft journal entries for complex transactions (M&A, leases, revenue recognition, equity compensation)
- Design and review chart of accounts structures
- Build month-end and year-end close checklists with adjusting entries
- Analyze revenue recognition under ASC 606 (five-step model)
- Model lease accounting under ASC 842 (ROU asset, lease liability)
- Prepare consolidation and intercompany elimination entries
- Calculate and record depreciation, amortization, and impairment
- Reconcile accounts and identify discrepancies
- Translate accounting outputs into inputs for financial analysis tools
Use a different skill when:
- Building complete financial statements →
/financial-statements
- Auditing the books →
/audit
- Extracting data from raw documents →
/data-entry
- FP&A and variance analysis →
/fpa
- Tax planning (estate, corporate) →
/estate or /fpa
Pre-Flight Checks
- Transaction type: What economic event needs to be recorded?
- Accounting basis: GAAP, IFRS, or cash basis?
- Entity type: Corporation, partnership, LLC, nonprofit?
- Period: What accounting period does this apply to?
- Materiality: Is this material enough to warrant a separate entry or can it be grouped?
- Supporting documentation: What source documents exist (invoice, contract, bank statement)?
Phase 1: Journal Entry Preparation
Goal: Record economic events with proper debits, credits, and documentation.
Standard Entry Format
Date: [YYYY-MM-DD]
Entry #: [JE-XXXX]
Description: [Clear description of the transaction and business purpose]
| Account | Account # | Debit | Credit |
|---------|-----------|-------|--------|
| [Account name] | [XXXX] | $[X] | |
| [Account name] | [XXXX] | | $[X] |
| **Total** | | **$[X]** | **$[X]** |
Supporting reference: [Invoice #, contract ref, approval]
Reversal: [Auto-reverse in next period? Y/N]
Common Transaction Patterns
Revenue recognition (ASC 606 — five-step model):
Step 1: Identify the contract — signed agreement, purchase order, or implied
Step 2: Identify performance obligations — distinct goods/services
Step 3: Determine transaction price — fixed, variable, constrained
Step 4: Allocate price to obligations — standalone selling prices
Step 5: Recognize revenue — point in time or over time
Entry (point-in-time, delivery):
DR Accounts Receivable $[X]
CR Revenue $[X]
Entry (over time, percentage of completion):
DR Contract Asset $[X]
CR Revenue $[X]
Deferred revenue (payment before delivery):
DR Cash $[X]
CR Deferred Revenue $[X]
[Recognized when obligation satisfied]
Lease accounting (ASC 842):
Operating lease (lessee, at commencement):
DR Right-of-Use Asset $[X] (PV of lease payments)
CR Lease Liability $[X]
Monthly payment:
DR Lease Expense $[X] (straight-line)
DR Lease Liability $[X] (principal portion)
CR Cash $[X]
CR Right-of-Use Asset $[X] (amortization)
Finance lease — similar but split interest expense and amortization
Equity compensation (stock options):
Grant date fair value: $[X] per option × [X] options = $[X] total
Vesting period: [X] years
Annual entry:
DR Stock Compensation Expense $[X] (total / vesting years)
CR Additional Paid-in Capital $[X]
Phase 2: Month-End Close Process
Goal: Systematic close that produces accurate, complete financial statements.
Close Checklist
| # | Task | Owner | Status |
|---|------|-------|--------|
| 1 | Bank reconciliation — all accounts | | [ ] |
| 2 | Accounts receivable — aging review, bad debt estimate | | [ ] |
| 3 | Accounts payable — completeness check, cutoff | | [ ] |
| 4 | Inventory count / valuation (if applicable) | | [ ] |
| 5 | Prepaid expenses — amortize current month | | [ ] |
| 6 | Accrued expenses — payroll, benefits, utilities, interest | | [ ] |
| 7 | Depreciation and amortization | | [ ] |
| 8 | Revenue recognition — deferred revenue roll-forward | | [ ] |
| 9 | Intercompany transactions — elimination entries | | [ ] |
| 10 | Equity — stock comp expense, treasury stock, dividends | | [ ] |
| 11 | Tax provision — current and deferred | | [ ] |
| 12 | Trial balance review — analytical procedures | | [ ] |
| 13 | Management review and approval | | [ ] |
Adjusting Entries Categories
1. Accruals — expense incurred but not yet paid
DR Expense CR Accrued Liability
2. Deferrals — cash received/paid but not yet earned/consumed
DR Deferred Revenue CR Revenue (as earned)
3. Estimates — bad debt, warranty, depreciation
DR Expense CR Allowance/Reserve
4. Reclassifications — correct prior mispostings
DR Correct Account CR Incorrect Account
5. Eliminations — intercompany, consolidation
DR Intercompany Revenue CR Intercompany Expense
Phase 3: Chart of Accounts Design
Goal: Structure the CoA to support both reporting and analysis.
Standard numbering convention:
1000-1999 Assets
1000-1099 Cash and equivalents
1100-1199 Receivables
1200-1299 Inventory
1300-1399 Prepaid and other current
1500-1599 Fixed assets (gross)
1600-1699 Accumulated depreciation
1700-1799 Intangible assets
1800-1899 Other non-current
2000-2999 Liabilities
2000-2099 Accounts payable
2100-2199 Accrued expenses
2200-2299 Deferred revenue
2300-2399 Current debt
2500-2599 Long-term debt
2600-2699 Lease liabilities
3000-3999 Equity
4000-4999 Revenue
5000-5999 Cost of goods sold / cost of revenue
6000-6999 Operating expenses
6000-6099 Compensation
6100-6199 Benefits
6200-6299 Rent and facilities
6300-6399 Technology and software
6400-6499 Professional services
6500-6599 Travel and entertainment
6600-6699 Marketing
6700-6799 Depreciation and amortization
7000-7999 Other income / expense
8000-8999 Tax provision
9000-9999 Intercompany
Design principles:
- Granularity should match reporting needs (don't over-segment for a small company)
- Every account maps to exactly one financial statement line
- Department/cost center segmentation via dimensions, not separate accounts
- Reserve accounts (allowances) are contra-assets, not liabilities
Phase 4: Reconciliation
Goal: Verify account balances are accurate and supported.
Bank Reconciliation
Bank balance per statement: $[X]
(+) Deposits in transit: $[X]
(-) Outstanding checks: ($[X])
(+/-) Bank errors: ($[X])
= Adjusted bank balance: $[X]
Book balance per GL: $[X]
(+) Interest earned: $[X]
(-) Bank fees: ($[X])
(-) NSF checks: ($[X])
(+/-) Book errors: ($[X])
= Adjusted book balance: $[X]
Difference: $0 (must reconcile to zero)
Account Reconciliation Template
Account: [name and number]
Period: [month-end date]
GL balance: $[X]
Supporting detail:
| Item | Amount | Reference | Age |
|------|--------|-----------|-----|
| [X] | $[X] | [ref] | [days] |
| [X] | $[X] | [ref] | [days] |
Total supporting detail: $[X]
Reconciling items: $[X]
(Explained and documented)
Quality Gates
Hard Constraints
- NEVER record an entry that doesn't balance
- NEVER recognize revenue before the performance obligation is satisfied
- ALWAYS cite the applicable accounting standard (ASC/IFRS) for non-routine transactions
- ALWAYS document the business purpose and supporting reference for every entry
Common Pitfalls
- Cutoff errors — recording December revenue in January (or vice versa)
- Forgetting to reverse accruals — double-counting expenses
- Capitalizing vs expensing — applying the wrong threshold or useful life
- Intercompany not eliminating — consolidated financials overstate revenue
- Deferred revenue misclassification — current vs long-term based on delivery timeline
Related Skills
/financial-statements — build complete statements from the trial balance/audit — audit the accounting work product/data-entry — extract and validate source data before recording/fpa — variance analysis on the resulting financials/budget — budget-to-actual comparison
