Question

Specific procedures need to be in place to deal with the way in which the accounting information system records and handles information. What are the areas of importance?

Answer 1

An accounting information system collects, records and processes transactions and becomes the main sources of information and evidences. they also provide documentation to prove assets ownership for creation and proof of monetary and non monetary transaction.

Accounting procedures are vast in nature. Areas of importance are -

Source Documents: first of all we have to collect accounting source documents (like. Bills, invoices) for which we using accounting.

Journal Entry: To Record the transaction as per source documents of the business entity.

Ledger Posting: transactions from Journal Entry book to be post in appropriate ledger accounts

Prepare trial balance:

Adjusted trial balance:

Prepare financial record : means preparing financial record like Profit and loss account, Balance sheet, cash flow

At the last closing the Accounting books