Competitive Exams Accountancy Information system

Accounting As an Information System

It is true that accounting is an information system. It is system in which an accountant gets all financial reports. These reports can be received by accountant if he takes all the steps of accounting procedure. There are following pin points which show that accounting is an perfect accounting system.

  1. Accounting gives us profit and loss account and balance sheet, on these two reports, we get the information of revenue position and our financial position.

  2. Because in accounting, there is the facility of calculate cash flow statement and fund flow statement, so it provides us the information about our inflow and out flow of funds and cash.

  3. Accounting is an equipment in the hand of accountant and manager, with this equipment they can make their all future plannings, future budget. With accounting, they can easily estimate, is there suitable to invest money or not under there accounting reports.