Relationship of the Accounting System with other Functional Management Information System
Computers, with the help of application software, perform the same functions that are carried out when accounting is done manually. Let us discuss these in brief-
- Payroll Processing - Payroll processing means preparation of wages and salaries and other related matters, such as leave record, etc.
- Transaction Recording - Transactions are recorded using the application software. Transaction recording is more accurate and also less time consuming because of two major processes, namely, posting into ledger accounts and casting, have been automated, i.e., the software is so designed that the transactions are posted and books are cast at the same time when the transaction is recorded.
- Ledger - The software is designed in such a manner that, as soon as the transaction is recorded, it is posted to the Ledger account. It is done with the help of account coding, which is done on the basis of what we commonly understand as grouping of accounts.
- Trial Balance - Since the transactions are posted to the ledger accounts, which are also totaled at the same time, Trial Balance is also ready with the recording of the transaction. Again, it is supported by the application software.
- Financial Statements - Financial statements are also prepared as the application software is so designed that it takes the accounts according to the coding and places them in the Manufacturing Account, Trading Account, Profit and Loss Account and the Balance Sheet.