AZAD College-Accounting department collects raw financial data and is stored in accounting journal.-Double-entry system is used to ensure accurate data. Double-entry system means,at least two entries must occur for every transaction.-Each entry includes the data, amount of money, account number, person’s name.-The journal purpose is to record all the transactions.-A general ledger is a collection of accounts include categories like accountsreceivable, accounts payable, inventory and cash.-Produce balance sheets; cash statements and income statements every quarterly.-Reports are produced to compare the financial positions of various companiesover time.-Accounting systems produce standardized reports.
2). PURCHASES, SALES, LOANS AND INVESTMENTS: -
-Purpose of accounting is to record the financial transactions with externalorganizations. Creates summary and detail reports to monitor key information.-If sales in a region drops, then there will be a major increase in the cash balance,then a message will be send to the appropriate manager by building exceptionreports.
3). INVENTORY: -
-Inventory control consists of knowing exactly what items are available andwhere they are located.-Determine when to place new orders.For E.g. With EDI, inventory control system can monitor current sales andautomatically place orders with the supplier.-The computer system monitors production requirements, keeps track of deliversand electronically sends order to the suppliers. The suppliers then deliver the parts, as they are needed on the production line.
4). THE ACCOUNTING CYCLE: -
-Produce information in reports that are required to reflect the financial conditionof the firm at the end of every quarter.-Managers operate for quarterly reports, with intermediate monthly reports for some items. The volume of data is kept on file by making summary reports.
5). PROCESS: -
Checks and Balances.a) Double-Entry System: - Objective of accounting system is to maintain theintegrity of the financial data.The goal is to prevent mistakes and discourage fraud, i.e., if an amountentered is incorrect, the account totals will not balance.Generally transactions involve outside organizations, mistakes can becaught by sharing data.For E.g.: - Companies typically send receipts, when they receive paymentsfrom each other. Auditors periodically send verification requests to suppliers andcustomers to make sure that data was recorded correctly.2