Business, Legal & Accounting Glossary
An accounting system is the system used to manage the income, expenses, and other financial activities of a business.
An accounting system is a collection of interconnected accounting processes, procedures, and controls. Accounting systems are designed to capture company transactions, aggregate them, and provide reports that decision-makers may utilise to monitor, evaluate, and improve operations.
While an accounting system may be totally paper-based, this is a rare occurrence in small organisations. Accounting systems are typically built on off-the-shelf accounting software, augmented with any procedures required to enter data into the software.
Accounting systems often cover all of an organization’s primary functional areas, including the acquisition of products and services, the sale of goods and services, the payment of wages to employees, and finance operations such as borrowing debt, selling shares, and paying interest to lenders. Accounts payable, billings and accounts receivable, fixed assets, inventories, and payroll are the specific components of an accounting system. Depending on the amount of transactions completed, each of the previous modules may have specialised accounting employees allocated to it.
cost-accounting system, accounts system, system of accounting, accountancy system, bookkeeping system
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This glossary post was last updated: 10th August, 2022 | 0 Views.