Structuring Database for Accounting

Data Processing Cycle and Database for Accounting

When you observe a chef making a dish, you can clearly see that he has arranged a variety of components systematically in front of him. The perfect arrangement of these components is required to cancel the confusion and prepare the dish efficiently. Same is the case with accountancy. Data processing is the carrying out systematic operations on data, especially by a computer, to retrieve, store, transform, or classify information.

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Data Processing Cycle

To begin with, we know that information is the final product of data. The quality of the final information obtained is directly related to data used in the first place. Keeping in mind the end goal of database design, let us comprehend the data processing cycle used in accounting. Data Processing includes the procedure of gathering, arranging, relating, translating and registering the data in such a way as to give reasonable and valuable information in the decision making the process of the administration.

Few crucial steps associated with the data processing cycle are data occupying, inputting, computing and generating information accessible to the user. As a result, Data Processing cycle when seen with regards to accounting needs multiple guidelines which are mentioned below;

Source Documents

Usually, the initial step is to occupy accounting data from the transaction(s) to make a report, known as a voucher (as expressed before), that proves and reports an accounting exchange.

Input of Data

The accounting data comprised in vouchers is to be fed in PC’s memory device. This is accomplished by utilizing a pre-planned Data Entry Form. This form is planned in a way that it is like a physical voucher document. Data entry form is made utilizing software and it is designed to show up on the PC screen so that the data is entered.

Data storage

An appropriate data storage structure is needed to accommodate a clear data record as demonstrated as follows;

Code Name Type

The above clear record that is utilized for accumulating the input of data regarding code of account, the name of the account and the category type to which it belongs is demonstrated below;

Code Name Type
B1212 Capital Account 4
56654 Purchases Account 1

Speculatively, the category type 4 above points towards Liabilities and the category type 1 point towards Expenses. The Data storage structures (additionally called data tables) are made as a segment of structuring database for accounting.

Manipulation of Data

The collected information is controlled for a fundamental change to create final reports. Such changed information might be collected independently and in this way utilized for creating final reports. On the contrary, the changed information can be specifically exhibited in the name of a report.

Output of Data

The accounting documents, for example, a ledger, a trial balance, and so on are acquired in a pre-outlined format by getting to the changed information. Since you learned about the manner in which data content is collected in an organized way, we will examine how the data structures are composed in consonance with the data content that rises up out of accounting exchanges.

Data Processing

(Source: DataIreland)

Database for Accounting

An organization is built up to take over one or numerous ventures. Normally in a situation with a single administration. Such cases of organizations are banks, medical centers, producers, and so forth. Every one of these organizations has diverse functions yet at the same time, there are a few essentials or regular functions performed by every one of the organization. One regular function of the organization is ‘accounting’.

Computerized and PC based AIS need a firm data structure for reserving the information of the transaction. Above all, the databases are utilized for reserving accounting data. The guidelines of the planning database (for accounting) starts with a reality (also accounting reality) that is communicated using components of a conceptual data model.

  • Reality: It takes into consideration some part of real-world circumstances, for which database is to be designed. In particular, with regards to accounting, it is the accounting reality that will be defined with the utmost precision.
  • ER Design: This is a formal blueprint, with a pictures format, in which Entity-Relationship (ER) Model ideas are utilized for the portrayal of reality.
  • Relational Data Model: It is authentic data model through which ER configuration is changed between related data tables alongside the limitation in the form of rules that are indicated to guarantee the consistency and respectability of accumulated data.
  • Standardization: Specifically, this is the procedure of refining a database outline (that comprises interrelated data tables) through which the likelihood of copy or repeated information things are eliminated or disposed of.
  • Refinement: Consequently, this is the result of the procedure of standardization as said above. The final database configuration is reached after the procedure of standardization is finished.

Solved Question for You

Q: How is the data manipulated?

Ans: The collected information is controlled for a fundamental change to create final reports. Such changed information might be collected independently and in this way utilized for creating final reports. On the contrary, the changed information can be specifically exhibited in the name of a report.

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