Accounting Management System

Accounting Management System

Accounting Management System

What is Accounting?

The Systematic recording, Reporting, and analysis of financial transaction of a business is called accounting. The accounting System have some component like General Ledger, Day book, Financial Reports.

General ledger:

The general ledger, sometimes known as the nominal ledger, is the main accounting record of a business which uses double-entry bookkeeping. It will usually include accounts for such items as current assets, fixed assets, liabilities, revenue and expense items, gains and losses

The general ledger is a collection of the group of accounts that supports the value items shown in the major financial statements. It is built up by posting transactions recorded in the sales daybook, purchases daybook, cash book and general journal daybook. The general ledger can be supported by one or more subsidiary ledgers that provide details for accounts in the general ledger. For instance, an accounts receivable subsidiary ledger would contain a separate account for each credit customer, tracking that customer's balance separately.

Day Book :

Accountingbook of original entry in which transactions (such sales and/or purchases) are entered on the day they occur, for later posting to the appropriate ledger(s).

A journal of accounts; a primary record book in which are recorded the debts and credits, or accounts of the day, in their order, and from which they are transferred to the journal.

Financial Statement :

financial statement

A written report which quantitatively describes the financial health of a company. This includes an income statement and a balance sheet, and often also includes a cash flow statement. Financial statements are usually compiled on a quarterly and annual basis.

A financial statement or financial report is a formal record of the financial activities of a business, person, or other entity. In British English, including United Kingdom company law, a financial statement is often referred to as an account. For a business enterprise, all the relevant financial information, presented in a structured manner and in a form easy to understand, are called the financial statements. They typically include four basic financial statements, accompanied by a management discussion and analysis: which are the following,

- Balance Sheet

- Income Statement

- Statement of retained earning

- Statement of cash flow

"The objective of financial statements is to provide information about the financial position, performance and changes in financial position of an enterprise that is useful to a wide range of users in making economic decisions." Financial statements should be understandable, relevant, reliable and comparable. Reported assets, liabilities, equity, income and expenses are directly related to an organization's financial position.

Financial statements are intended to be understandable by readers who have "a reasonable knowledge of business and economic activities and accounting and who are willing to study the information diligently."

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