The Accounting System

Abstract

In Part I we discussed the importance of financial information, together with the main users and uses. In order to generate financial information, a business needs to establish an accounting system. The nature of the system depends on the type of business and the size of the organisation, but there are common features since procedures must be established to allow all financial transactions to be recorded. These procedures involve raising source documents, such as invoices, purchase orders and credit notes, so that those responsible in the business are made aware that a transaction has taken place and the details of the transaction can be recorded.