The term "data" refers to the primary details or numerical facts associated with an event or transaction. Data is stored and maintained on a computer or network. Computer software such as HiTech Financial Accounting processes this electronic data. The data is also kept as hard copy or paper. Since accounting is limited to transactions and events of a financial nature, accounting data will include facts, financial nature, and transactions and events related to business entities during the accounting period. In addition, accounting data must be supported by documentary evidence. Therefore, a file called a credential supports data. Often the data is confusing and out of touch in its original form. It cannot be understood. Therefore, the accountant processes the raw data into a form of completion of "information", making it useful and meaningful, and can be used by various accounting information users for the decision-making process.
Therefore, accounting information generated by the accounting cycle generates accounting information. Collect, record, classify, group, evaluate, tabulate, schedule, and aggregate data to present data in the form of information for users to use to enable them to make decisions.
Accounting data includes financial transactions and events related to entities in the accounting period supported by documentary evidence [vouchers]. For example, receipts and payments are received by the payee through invoices, through outbound invoice sales, through credit notes, inbound return records; through debit notices for one-way return; bills or payment rolls, etc.
Therefore, the first and most important function of accounting is to collect data supported by the voucher to ensure the authenticity of the voucher. The accounting process consists of recording in the original entry [the journal or sub-journal] of the book; the classification [posting to the ledger] grouping [putting a transaction of a similar nature in one place in an account] to evaluate [by balancing or estimating the year-end value] ] Tabulation [preparation of balance lists and checking of arithmetical accuracy] and preparation of financial statements [transactions] and profit and loss accounts; balance sheets] convey information in the form of reports.
Now, one day of computer accounting software can manage this task very effectively in a short period of time. Accounting information is presented primarily in the form of financial statements, such as income statement [transaction and profit and loss account] position statements [balance sheet]. Today's statement of changes in financial status; value-added statements; human resources accounting reports; social performance reports, etc. that form part of accounting information
Differences between data and information
Data
1. Refer to the details of any event, facts.
2. In general, the form is chaotic and disconnected.
3. It is the original form and is the input of accounting.
4. Users cannot understand or use.
5. It does not depend on information.
Information
1. Refers only to events related to the entity.
2. Properly arrange, classify and organize.
3. It is the form of completion and is the output of the accountant.
4. Users of accounting information understand and use them to make decisions.
5. Information is based on data and is obtained from the data.
Parties interested in accounting information
Accounting information makes sense for a variety of people who are directly or indirectly involved in the business.
Management:
Small businesses are usually rented by exclusive traders or partners. However, large companies are usually carried out by a company that separates management from ownership. Manager ' Responsibility is to operate the business effectively and maximize the return on capital without compromising funds.
Management requires accounting information
[1] choose other proposals;
[2] Controlling the purchase and maintenance of inventory [inventory] cash receipts and payments;
[3] Planning or budgeting for the future
[4] Assess performance and
[5] Design remedial measures for deviations between actual results and budget targets.
owner:
Although the owners began to fund the business, they were the last to receive a return on equity investment. This applies not only to repayment but also to reward funds. The interest profit on wages and credits after satisfying all expenses including employees, if any can be distributed as a return on capital. Of course, owners are interested in the safety of their capital and reasonable returns, depending on the stability and prosperity of concern. The accounting report [annual] not only assesses past performance, but also helps assess the future prospects of the entity. This information is also very important to potential owners.
Creditors:
It may be a short-term cargo supplier, temporary advance payment or long-term lender. Mortgages, debt holders, etc., while both are interested in the stability and returns of debtor companies, the former are particularly concerned about their short-term solvency, liquidity, while the latter are interested in the company's long-term solvency.
Government:
Many products now require GST and sell Lax. The government also sets the price of essentials, for example. Medicines, vegetables, oil, etc. The government is interested in understanding the cost information of the admin consumption tax and standardizing the product price. The government is also interested in accounting information on income tax profits.
Employees:
Stable employment and stable business have come together. The union is once again interested in sharing the company's profits in the form of bonuses. Therefore, employees are naturally interested in the accounting information provided by the annual accounting report.
Consumer:
Almost all quarters are not affected by price increases. Therefore, producers strive to reduce the cost of their products and their selling prices. Consumer protection associations have recently been developed to control business and industry and to make them aware of the "social responsibility" of society. Therefore, consumers also need accounting information.
Researchers:
Financial statements mirrored as business conditions are invaluable for the study of business affairs. Therefore, these statements are of great interest to scholars engaged in accounting theory as well as business affairs and practical research.
Nature of business income
One of the main objectives of financial accounting is to determine whether business operations are profitable. Accounting allows us to understand whether a company has made a profit or suffered losses during the accounting period.
Orignal From: The importance of data in accounting information and the parties interested in accounting information
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