The paper "Establishing and Maintaining Accounting Systems" is a perfect example of a finance and accounting assignment. Data and information are used commonly as if they are the same thing. In isolating data from information, data are information assembled in asset order, format for further processing to produce a meaningful result that support of an existing theory or hypothesis (Henson, 2006). For example, data can drown on individual say he is the height or by average age and gender or take a descriptive of the world we can perceive data with our senses and then the brain can process.
It can be a raw material for data processing. On the other hand, information is a set of characters or quality or quantity or even a combination of all of the attributes of items of both tangible and non-tangibles. The information allows as expanding our knowledge beyond the range of our senses. We can compute data in information and move it about for people can access it at different times. For instance, if I take an individuals photograph is information. But what the individual look like is data. Question 2 The transaction processing system and accounting information play different functions in any organization.
For instance, the transaction processing system (TPSs) has a role of collecting, storing, modifying and retrieving transaction of the organization. For information generated in the TPSs to relied own, data store has to be left in a consistent state (Strawser, 42-46). For example, if any electronic payment is made, the amount has to be withdrawn from one account and deposited to the other. In case of a failure, the program is designed in a manner that prevents the transaction completion and the partially executed transaction rolled back by the TPS.
On the contrary, the accounting information system combines the information already processed in the TPS makes an analysis, study the practice and designs used in the accounting for the organization transaction process, implementation, and monitoring information systems. Such an accounting system uses both modern and traditional accounting control methods in providing users with the financial information necessary for the management of the organization. Question 3 The accounting systems such as the Management information systems (MIS) are interactive human-machine programs that work to support decision making for users both in and out of the traditional organizational boundaries (Elliott, p.
39). The systems are used to support an organization’ s daily operational activities, for both future and current tactical decisions and overall strategic direction decisions of the firm. The management information systems consist of several applications that include but not limited to, the financial and human resource systems. The financial application makes up the heart of an accounting information system in practice such as the ledger, payables, purchasing systems ad the receivables and so forth.
While the human resource application makes up of part of the major modern information systems that are commonly integrated with accounting information systems. All this is indented to achieve better results concerning decision making by the organization’ s management. Question 4 Importance of Recordkeeping Claims by Elliott, record keeping is crucial for successful business management (29). A comprehensive for instance, a record of cash purchases, withdrawal, payment, and drawings makes it possible for the entrepreneurs to develop an accurate and timely financial report, which clearly generates a possible analysis on the performance of business and management can easily compare the performance of the business on either monthly, quarterly or annual basis to measure business growth, and analyze possible trends and plan for a future business undertaking.
For instance, if the business has to make funds borrowing in support of business expansion the lender will at all-time demand for financial statements to access if the business qualifies for loans. Accurate recording and accounting for the business expenditure and income indicates what the business is doing when it concerns profit-making or loss incurred (Elliott, 78-90).
This creates the analysis process easier and the management can easily determine if price adjustment or tightening business activity. Many business ventures have collapsed as a result of poor record-keeping, looking at the recording shortfall undertaken by John William indicates a possible fall if proper measures in the account are not addressed.
Barry Elliott, Jamie Elliott. Financial accounting and reporting. London: Prentice Hall,, 2007.
Henson, Walter. "ACCOUNTING INFORMATION SYSTEMS." ACCOUNTING (2006): http://accounting.e-articles.info/title/ACCOUNTING-INFORMATION-SYSTEMS/.
Hervé Stolowy, Michel Lebas. Financial accounting and reporting: a global perspective. London: Cengage Learning EMEA, 2006.
Jeffrey W. Strawser, Joyce A. Strawser. Financial Accounting and Reporting 7e. London: Cengage Learning, 2006.
Phiri, Michael. Information technology in construction design. New York: Thomas Telford, , 1999.
Romney, Marshall B., and Paul John. Steinbart. Accounting Information Systems. London: Pearson Prentice Hall, 2009