Header Ads Widget

Accounting Information System


Accounting Information System

Information system that supports the accounting have always played a very important role in organization. According functions are performed by the organizations from the last so many centuries but now the accounting data is processed by the computer and records are kept on the magnetic and optical storage media.

"According information system is the system of recording, classifying and summarizing in a significant manner and in terms of money, transaction and events, which are, in part, at last of a financial character and interpreting the result thereof" 

Some of the important functions supported by a typical accounting information system are as explained below:

accounting information system lotsinfo.com

1. General Ledger 

 The general ledger is the function of the accounting information system.
  The general ledger contains the chart of accounts which is necessary to prepare balance sheet, income statement and other reports.

The accounting systems can use a number of unique codes to help in the control and computer processing of the accounts. By using different accounting codes, computer program in an accounting system can quickly sort and extract the data from the files and then prepare the financial report based on that data.

When a large number of individual accounts have a common characteristic then it is useful to place them in a separate ledger called subsidiary ledge. These ledger provided data needed for the further processing. For example the accounts receivable subsidiary ledger can be used to produce customer statements, customers analysis and accounts receivable analysis etc. 

The general ledger system provides managers periodic accounting reports such as income statement and balance sheet. It defines the organization fiscal period and also produces a chart of account maintained by the accounting system for example after processing the weekly payroll system provides the general ledger system with data to update the various payroll accounts.

2. Journal
A journal is timely listing of transaction. All transactions are first of all listed in a journal and then posted in to the related accounts in a ledger. In large companies where there are thousands of transactions the journals may be specialized.

Similarly if an organization is having a number of cash transactions then it can use a special journal for recording cash receipts and other journal for recording cash disbursements. A journal control the company’s all transactions when they occur.

So if during processing a transaction is lost then it can be checked in full detail from the journal.

3. Fixed Assets

Fixed assets mean equipment, property and other long term assets that organization have. This information contains the original cost of assets, their deprivations rates, the accumulated depreciation and the book value of the asset. The general ledger system uses this information to maintain current balances in the various long term assets accounts of the organization.

In the accounts receivable all the customer’s accounts are maintained. When credit sales are made data is posted to the customer account. Similarly when they money is received for these sales, the payment is reduced from the customer balances. Accounts receivable module process invoice, keeps a sales history for each customer and also helps in identifying the customers with the past due history.

 4. Accounts Receivable


In the accounts receivable all the customer’s accounts are maintained. When credit sales are made data is posted to the customer account. Similarly when they money is received for these sales, the payment is reduced from the customer balances. Accounts receivable module process invoice, keeps a sales history for each customer and also helps in identifying the customers with the past due history

 5. Accounts Payable

    The most common liabilities of an organization are recorded in the accounts payable. The accounts payable functions allows entry of purchases from the vendors, verification of bills, discount and due date monitoring of bill etc. Accounting information system can produce a number of reports such as list of vendors, purchase history reports, payment made to each vendor, outstanding transactions, audit, cash requirement report etc.


6. Sales order Entry and Processing

Order processing is another important function of the accounting information system. It is a way for the customer’s order’s to get into the accounting system.

It checks the credit online, product availability, to allocate the stock, to track the achieve, outstanding and future orders, price list, order acknowledgements, price management, back order reports etc.

A Computerized sales order system usually track the sales made by each salesperson and provides input to the payroll system so that salesperson commission can be calculated. The system also provides information to the shipping department to ensure that correct stock sent to the customer.


7. Purchase order and Receiving

    Purchase order and receiving function enables a company to maintain the purchasing record of the company of the company, to the quality and accuracy and timely delivery of the purchased items.

The module of the accounting information system is used to produce purchase orders, to make changes to the purchase orders and cancellation of the purchases. It generates a number of reports such as the receiving reports, receipt by vendor, by item or by department.

8. Payroll 

Every accounting information system must have the payroll module which is used for the payroll calculations, payments and reporting. 

Every organization want to process the salaries of its various type of employees according to various types of salaries as per daily, weekly, monthly basis etc.

The accounting managers also needs a number of reports generated by the payroll module of the accounting information system such as employee details, sickness reports unemployment  reports,  employee master reports, payroll register etc.


9. Word Processing 

word processing function has also become the important function of the accounting information system. This module provides the tools to prepare various types of letters, documents and reports using a number of functions such as cut, copy and paste, various types of fonts, automatic header and footers, spell checking, mailing labels, mail merging and printing facilities. It can also be used to generate a variety of graphical reports using bar graphs histograms etc. 

A number of readymade accounting information system are available in the market which have a number of features and accounting capabilities for a number of different accounting firms. Powerful accounting packages bundle all of the above mentioned functions into their accounting systems. 

So an accounting information system must contain the following information subsystems to perform the different function.

  • General Ledger System 
  • Journal System
  • Fixed Assets System 
  • Account Receivable System
  • Accounts Payable System
  • Sales order processing system
  • Purchase order processing system
  • Payroll processing system
  • Word processing system 

An operational accounting management system takes various types of transactional and other type of input data which is processed by the information system as shown below to give the outputs.

Accounting information is mainly used at operational level where it is used to store track and control the accounting transactions such as paychecks, payments to vendors, receipts etc. 

10. Advantages of accounting information system are 

  • It helps in calculation the profit and loss of business organization
  • It helps in the proper recording of the business transactions.
  • By law it is mandatory to keep the accounting records for legal purposes.
  • It helps in the preparation of organizations to meet their tax liabilities such as income tax, sales tax, excise, VAT etc. 
  • It is helpful for the financial managers to take the long term plans about the organizations and for effective decision making.
  • It helps the company's to compare their performance with their competitors and also with their past performance.



Post a Comment


  1. You also can declare different deals using varied Ignition Casino bonus codes, such because the site’s weekly boost and referral bonus. 메리트카지노 Again, this deal is break up equally between the site’s casino and poker section. Ignition has also made a reputation for itself in the poker world and runs well-liked online tournaments boasting prize swimming pools worth millions of dollars. The site offers five roulette variations, with most centering around American and European roulette. Remember that you're going to get a better bonus deal using crypto than a traditional cost technique. The BitStarz cell casino is fully responsive to smaller screens, the actual fact} that|although} is not a|there isn't any} dedicated app.

  2. The level totals decide whether both hand will get a third card. A complete of eight or 9 identified as} a "natural," and the participant hand will get no more cards. In truth, except the banker has a natural 9 or ties the natural eight, no additional cards are drawn, and the naturals are computerized winners. On any other complete, zero via 5, participant draws a third card, except banker has a natural, by which case the financial institution hand wins with no additional draw. bet365 The active participant seems on the gamers' two cards and if the total is eight or 9 locations them face up, announcing 'la petite' for eight or 'la grande' for 9.