Question

define and describe multiple accounting systems.

Answer 1

Ans:

An accounting system refers to the system which is used to manage all the incomes, expenses, and other financial transactions or activities of an organisation or business. An accounting system helps in keep recording of the business transactions such as expenses in purchasing of business related goods and services, incomes or invoices etc. Basically accounting systems helps in an overall tracking of the financial transactions of the business.

There are four main types of accounting systems that helps in maintaining financial records of transactions are as follows :-

• Manual Accounting Systems : Manual accounting systems refers to the bookkeeping system that maintains records of financial transactions by hand, and as the name suggests " manual " it only involves bookkeeping or recording by hands and requires no computer for the recording.
• Computerized Accounting Systems : Computerized accounting systems are the software or financial software programs, provided by the company or installed in company's computer systems in order to maintain all financial records of purchases, expenses, and incomes etc.
• Single - Entry System : Single-entry systems are the financial accounting system which includes bookkeeping without the dual aspects of accounting, as it has no fixed rules of recording financial transactions, and it is also known as unscientific or incomplete methods of bookkeeping or recording transactions.
• Double-Entry System : Double - entry system refers to the system of bookkeeping which includes two sides that is " debit & credit " in which the entries used to made for the financial recording, which shows an effect of the financial transactions on both sides or with dual aspects of the transaction recording.