ACC 421 Accounting Cycle Paper Week 1
Accounting Cycle Paper
ACC 421
May 26, 2015
Accounting Cycle
The purpose of accounting is to accumulate and report on financial information about the performance, financial position, and cash flows of a business. This information is then used to reach decisions about how to manage the business.
Once this financial information has been stored in the accounting records, it is usually compiled into financial statements, which include the following documents: income statement, balance sheet, statement of cash flows, statement of retained earnings, and disclosures or notes that accompany the financial statements.
Accounting Cycle
Accounting information systems generally consist of six main parts: people, procedures and instructions, data, software, information technology infrastructure and internal controls.
People
The people in an AIS are simply the system users. Professionals who may need to use an organization 's AIS include accountants, consultants, business analysts, managers, chief financial officers and auditors.
Procedure and Instructions
The procedure and instructions of an AIS are the methods it uses for collecting, storing, retrieving and processing data. These methods will be both manual and automated, and the data can come from both internal sources such as employees, and external sources like customers online orders. Procedures and instructions must be followed consistently to be effective.
Data
The data contained in an AIS is all the financial information pertinent to the organization 's business practices. Any business data that impacts the company 's finances should go into an AIS. This data can then be used to prepare accounting statements and reports such as accounts receivable aging, depreciation/amortization schedules, trial balances, profit and loss, and so on. Having all this data in one place - in the AIS - facilitates a business 's recordkeeping, reporting, analysis, auditing and decision-making activities. For the data to
ACC 421
May 26, 2015
Accounting Cycle
The purpose of accounting is to accumulate and report on financial information about the performance, financial position, and cash flows of a business. This information is then used to reach decisions about how to manage the business.
Once this financial information has been stored in the accounting records, it is usually compiled into financial statements, which include the following documents: income statement, balance sheet, statement of cash flows, statement of retained earnings, and disclosures or notes that accompany the financial statements.
Accounting Cycle
Accounting information systems generally consist of six main parts: people, procedures and instructions, data, software, information technology infrastructure and internal controls.
People
The people in an AIS are simply the system users. Professionals who may need to use an organization 's AIS include accountants, consultants, business analysts, managers, chief financial officers and auditors.
Procedure and Instructions
The procedure and instructions of an AIS are the methods it uses for collecting, storing, retrieving and processing data. These methods will be both manual and automated, and the data can come from both internal sources such as employees, and external sources like customers online orders. Procedures and instructions must be followed consistently to be effective.
Data
The data contained in an AIS is all the financial information pertinent to the organization 's business practices. Any business data that impacts the company 's finances should go into an AIS. This data can then be used to prepare accounting statements and reports such as accounts receivable aging, depreciation/amortization schedules, trial balances, profit and loss, and so on. Having all this data in one place - in the AIS - facilitates a business 's recordkeeping, reporting, analysis, auditing and decision-making activities. For the data to
References: Bragg, S. (2011, November 9). What is the purpose of accounting? - Questions & Answers - AccountingTools. Retrieved May 26, 2015, from http://www.accountingtools.com/questions-and-answers/what-is-the-purpose-of-accounting.html Fontinelle, A. (2011, March 2). Introduction To Accounting Information Systems. Retrieved May 26, 2015, from http://www.investopedia.com/articles/professionaleducation/11/accounting-information-systems.asp