The term "data" means primary details or numeric facts about the event or transaction. Data is stored and maintained on a computer or network. Computer software, such as HiTech Financial Accounting, processes this electronic data. Data is retained on paper or on paper. As accounting is limited to financial transactions and events only, accounting data consists of financial facts that relate to the business's business and events in the accounting period. In addition, the accounting data must be supported by documented evidence. Thus, documents known as vouchers support the data. Data is usually unordered and can be separated in raw form. You can not understand. Thus, in accounting processes, raw data is made to the "ready" form of information to make it useful and meaningful to use for accounting users in the decision making process.
Thus, accounting data processed by the accounting cycle produces accounting information. The data is collected, recorded, classified, grouped, evaluated, charted, sorted, summarized in order to present the same information to the users in order to enable them to make decisions.
Accounting Data Financial transactions and events supported by the entity for documented evidence for the accounting period (vouchers). For example, revenue and payments are returned by crediting to the beneficiary account, sales on the invoice, sales on the foreign account; settles the collection order; bills or pay rolls, etc.
Thus, the first and most important task of accounting is to collect data supported by vouchers to ensure its authenticity. Accounting processes consist of recording in the books of the original entry (journals or journals); (placement of similar transactions at one place on an invoice) (making a balance sheet or valuation at the end of the year) (making balances and checking arithmetic accuracy) and preparation of financial statements and profit and loss accounts, balance sheet) as a reporting format for the disclosure of information.
Now a daily computer accounting software can handle this task very efficiently in a short time. Accounting information is best presented in the form of financial statements, such as the profit and loss account (trading and income statement) positions (balance sheet). Now-a-day statement on changes in the financial situation; value-added statement; report on human resources accounting; Social Performance Report etc. Part of the accounting information
Difference between data and information
1. It refers to every detail and fact.
2nd Generally abnormal and dissociated.
3rd It's raw and accounting.
4th Users can not understand or use it.
5th It does not depend on the information.
1. It only applies to event events.
2nd Properly sorted, classified and organized.
3rd It's in the form and is the result of the bookkeeping.
4th The users of accounting information understand and use to make their decisions.
5th Information is based on and comes from information.
Parties interested in accounting information
Accounting information is of interest to individuals directly or indirectly affected by an enterprise.
Small business is usually rented by the sole trader or partners. But a big business is usually done by an affiliate company that separates the management from ownership. Managers & the responsibility is to effectively operate the business and maximize the return on capital without endangering the fund.
Management needs accounting information to select alternative proposals
(2) checking the cash receipts and payments of inventories (stocks);
(3) Planning or Budgeting for the Future
(4) Evaluating Performance and
(5) Developing corrective measures for deviating the actual results from budget targets.
Although owners initiate a contribution basis for business, they are the last to get their claim on the return on investment. This is true not only for repayment, but for capital injection. After all costs have been incurred, including employees, wages and lender interest income if any of them is distributed as a reward for capital. Of course, the owners are also interested in the security of their capital and for a reasonable return on the stability and prosperity of concern. Accounting reports (annual) not only evaluate past performance but also help the entity's future prospects. Such information is very important to the owners as well.
May be a short-term supplier of goods, temporary or long-term lenders. mortgage loans, holders of debtors, etc. While both are interested in the stability and income of the debtor company, the former are particularly concerned with their short-term solvency, ie liquidity, while the latter strives for long-term solvency.
Many daily products are subject to excise duty and sales obligations. The government regulates the prices of basic commodities e.g. medicines, vegetables, oil, etc. Therefore, the government is interested in knowing the costs of the administrator with excise taxes and regulating the prices of the products. The government is also interested in accounting information on income tax purposes.
Continuous employment and business stability are associated. Again, trade unions are interested in sharing the profits of the company in the form of bonuses. Therefore, employees are of course interested in the accounting information of annual accounts.
It is below the price increase in almost every quarter. Accordingly, the producer seeks to reduce the cost of the product and the selling price. Recently, consumer protection federations have been designed to exercise control over business and industry and social responsibility towards society. Thus, consumers also need accounting information.
Financial Statements in the business terms are an irreplaceable value for business research. These statements are therefore of great interest in accounting theory and in business and practice research.
Nature of Business Income
One of the main purposes of financial settlement is to determine whether or not a business is profitable. Accounting allows us to know whether the company has gained or suffered losses in the reporting period.
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