Computerized Accounting Functions and Organizations Productivity

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TYPES OF COMPUTERIZED ACCOUNTING SYSTEMS By Kathy Adams McIntosh, eHow Contributor Businesses use financial information to create statements and to file income tax returns at the end of the year. Some businesses use manual accounting systems, but many businesses opt for computerized accounting systems to simplify the process and reduce errors. Businesses can choose between different types of computerized accounting systems. 1. Purpose * A computerized accounting system serves many purposes for the business owner. It improves accuracy, enhances reporting capabilities and simplifies recording. Accuracy increases because math processes occur automatically without human error. The business owner can record each transaction in the…show more content…
At the end of each period, nominal accounts are wiped clean and their values relegated to real accounts. An Explanation of Accounting System Tracking of Revenue & Expenses By Alan Li, eHow Contributor Nominal accounts are closed out at the end of each accounting time period. In accounting, the accounts that record the values of individual items and phenomenons can be divided into either real or nominal accounts. Real accounts are used to keep up to date on lasting items such as assets, liabilities, and equities. In contrast, nominal accounts are used to keep up to date on certain phenomenon such as revenues and expenses within a set time period. At the end of each period, nominal accounts are wiped clean and their values relegated to real accounts. 1. Cash and Accrual Bases * Almost all accounting is done on either a cash or an accrual basis. Cash and accounting bases differ on when revenues and expenses are recognized. Recognition means to record the transaction on the accounts in acknowledgment of its occurrence. Cash basis recognizes revenues and expenses when cash or cash equivalents are either received or paid out for either. In contrast, accrual basis recognizes revenues and expenses at the times of their occurrences. Revenue Recognition * Accrual basis accounting attempts to recognize revenues and expenses at the times of
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