Business-accounting information systems Essay Example | Topics and Well Written Essays - 1500 words

Business-accounting information systems - Essay Example The purpose of this report is to provide a company with an inadequate accounting system the basic elements of an accounting system and which computerized accounting system can provide assistance for the company. Accounting is the information system that identifies, records, and communicates the economic events of an organization to interested users (Weigant & Keiso & Kimmel, 2002, p.2). The identification process involves the recognizing economic events which create activity that affects the bottom line of a business. These activities include expenses, sales of physical goods or services, purchase of materials or inventory, payroll, accounts payables, account receivables, recognition of liabilities and equity investment transactions. The activities must be recorded in a book called the general journal which can be either manual or electronic. The general journal is a simple system which records transactions as two input transactions where a debit and its corresponding credit are recorded for every economic transaction. In all accounting systems the sum of all credits must equal the sum of all debits. The reporting of the financial results of a company is illustrated within its financial sta tements. These must be created at the end of an accounting cycle which is typically a one year cycle. The four basic financial statements are The Income Statement, The Balance Sheet, The Statement of Cash Flow and the Statement of Stockholders Equity. In order for a company to create the end result of the accounting system which is the financial statements, a series of procedures occur over the course of a year which is called the accounting cycle. Appendix A provides a flow chart which illustrates the 9-step process of the accounting cycle. The accounting discipline is self regulated and people practicing accounting must follow a strict set of standards which are called generally accepted accounting