Accounting information system collects financial data from the operations of the business, processes the collected data and tranforms them into financial information, and produces reports for the decision makers.  

• which transaction is recorded? (what is the recordable transaction?)
• how is the transaction recorded? (which data are collected and from where to be collected?)
• when is the transaction recorded? (before or after the occurance? )
• which controls are necessary as for the reports to be exact, valid and accurate and for the assets to
be protected, for the audit to be processed?
• which reports will produced and when?
• in which details are the reports be produced?

The differences are the hardware and software used in the system and the way of doing the transactions (Sürmeli, 2009).

Invoice is a document that indicates a sales transaction has been made.

It shows the parties(buyer and seller) involved in the transaction.

It shows the date of the transaction.

It shows the subject(for example the company sold laptop computers) of the transaction.

It shows the amount(for example, 15 laptop computers) of the transaction

It shows the amount(15x3.000T=45.000T + VAT) of the transaction.

Accounting information system is composed of three major subsystems:

The transaction processing system,

The general ledger/financial reporting system, and

The management reporting system(Hall:, 2008)

The main objective of a business is to sell products/services to the customers and make profit from the sales activity.

The common events that take place in revenue cycle are:

• Receiving customer order
• Analysing the credit approval for the
customer
• Viewing inventories
• Accepting order
• Preparing products for shipment
• Billing
• Recording and monitoring receivables
• Collecting cash
• Sales allowances and sales returns
• Preparing reports

Preparation of the bill shows a sale transaction has occured.

Receivables occur for credit sales.

• Analysing inventories
• Preparing purchase orders
• Receiving goods
• Making the payments
• Purchase returns and allowances
• Preparing reports

one copy is sent to the vendor,

one copy for the accounting process,

one copy for the warehouse for receiving the materials, and

the last copy is for the purchasing department’s files.

Fixed asset system deals with the acquisition, maintanence and disposal activities of the fixed assets.

The purposes of payroll processing system are to calculate the pay due employees, and to maintain cumulative earnings records.

This happens because of two reasons(Boockholdt, 1999, p.689):

• Payroll processing systemwithhold amounts for deductions and taxes and summarize these in cumulative earning reports. These withholding and reportings are unnecessary when processing purchases transactions in expenditure cycle.

• Payroll processing system produces payrolls for the employees. Establishing a separate system for payrolls allows greater control over these transactions.

Accounting is an information system that collects, records, classifies, and summarizes financial transactions of a business according to generally accepted accounting principles and analyses and reports them to the information users.

• Preparing opening balance sheet
• Recording opening journal entry based on opening balance sheet
• Posting opening journal entry to general ledger

Accounting information system deals with financial transactions which affect the assets, liabilities and owners’ equity of a business and preparing financial statements and reports related to the business where finance information system deals with funding the assets, finding appropriate resources for the assets.

1.Capital Budgeting

2.Cash Management

3.Credit Management

4.Financial Analysis

5.Financial Forecasts

6.Profit Planning

• To meet its day-to-day needs
• To compensate for the uncertainty associated with its cash flows and
• To satisfy bank requirements.