Book contents
- Frontmatter
- Contents
- Preface
- 1 Basic concepts
- 2 The accounting framework
- 3 The accounting system: elements of double entry accounting
- 4 The accounting system: revenues and expenses
- 5 The accounting system: accruals, prepayments and depreciation
- 6 The interpretation of accounts
- 7 Accounting for price changes
- 8 The collection and processing of accounting data
- 9 Some extensions and suggestions for further reading
- Solutions to exercises
- Notes
- Index
8 - The collection and processing of accounting data
Published online by Cambridge University Press: 01 June 2011
- Frontmatter
- Contents
- Preface
- 1 Basic concepts
- 2 The accounting framework
- 3 The accounting system: elements of double entry accounting
- 4 The accounting system: revenues and expenses
- 5 The accounting system: accruals, prepayments and depreciation
- 6 The interpretation of accounts
- 7 Accounting for price changes
- 8 The collection and processing of accounting data
- 9 Some extensions and suggestions for further reading
- Solutions to exercises
- Notes
- Index
Summary
INTRODUCTION
In earlier chapters, we have concentrated on the end-product of the accounting system: the final accounts which summarise the business firm's activities over a period. In this chapter, we pause briefly to consider how we might ascertain and record the basic facts about the transactions and financial position of a business. Our examples have, hitherto, assumed that we have this knowledge, but in practice we will need a carefully designed information system to gather it: otherwise, our accounting records will suffer from avoidable error and, in some cases, fraud. The possibility of error and fraud also exists in the subsequent data processing which takes place within the accounting system. It is therefore desirable that the system contains appropriate cross-checks, and we shall illustrate this with the example of control accounts.
DATA COLLECTION
Information about the basic transactions and events on which the accounting system rests is obtained by a wide range of devices, most of them involving the exchange of paper records. For example, bus passengers are accustomed to receiving tickets in exchange for payment of their fares. The obvious role of the ticket, from the passenger's point of view, is as proof of payment of the fare and, therefore, of the right to travel. Thus one important use of bus tickets is the avoidance of possible fraud by passengers through non-payment of fares.
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- Chapter
- Information
- The Elements of AccountingAn Introduction, pp. 127 - 135Publisher: Cambridge University PressPrint publication year: 1992