Functional Areas of Accounting Accounting has three working areas. Financial Accounting determines the results of the company on a continuing basis such as six months. This will assist you in ascertaining long-term courses of action.
The transaction processing system converts the raw data into meaningful information as output; this is the information, which is intended for use by the financial users. Events that affect the business are recorded, as transactions in the processing system.
It differs between both service and manufacturing industries. For example, the manufacturing industry can record the transactions related to movement of parts from one phase to another phase or from raw material to work in process to finished inventory.
The nature of transactions may be different in the service industry. The transactions processing systems are equally important for both the sectors. General Ledger system is defined as a hub, which is connected to other systems of the firm through the spokes of the information flows.
Individual events that are recorded in the subsidiary accounts and the special journals are processed by transaction cycles. The summaries of these transactions flow into the general ledger system and then become the sources of input for the Financial Reporting system.
The information provided includes tax returns, standard financial statements The problems that can cause the resulting information to be bad or ineffective can be generated at the base stage that is data sources, which are the transactions that enter the information system from either internal or external sources.
External financial transactions are the most common source of data. These are individuals outside the firm and economic exchanges with the other business entities.
If the data sources are not correct and reliable, it can result in the resulting information from the accounting information to be bad or ineffective.
But, it is not explicitly considered as a decision factor in the design of the system. Help us make our solutions better Rate this solution on a scale of below We want to correct this solution.
Tell us more Hide this section if you want to rate later Was the final answer of the question wrong? Were the solution steps not detailed enough? Was the language and grammar an issue?All the journal records must be posted to the ledger on a periodic basis (daily or weekly), which is a group of accounts put together and classified (assets, liabilities, revenue, expenses and equity)–in other words general ledger summarizes all the transactions within a period of time.
The difference between a general ledger and the general journal is that the general journal is considered the initial book of entry. The general ledger and general journal help create a double.
Journal entry is an entry to the journal. Journal entries include at least one debit entry and at least one credit entry. This method is called as the double entry recording system. In the general journal you must enter the account to be debited and the account to be credited and the amounts.
Once a transaction is recorded in the general journal, the amounts are then posted to the appropriate accounts. From the journals the amounts are posted to the specified accounts in the general ledger.
Let's illustrate the difference between entries to the general journal versus general ledger with the depreciation associated with a company's equipment. There are two kinds of ledgers: a general ledger contains information on all the accounts, while a subsidiary ledger contains information that is specific to a certain general ledger account.
If you're using a manual accounting system, you'll be using an actual book to record information in the ledger.