Question

Explain the five main components of an accounting system.

Answer 1

Following are the five main components of an accounting system.

• Source Documents: source documents are documents evidencing the transaction. E.g. sales receipts
• Input Devices: input devices are the technological devices which help enter the source documents into the accounting system. E.g. keyboard
• Processors: processors process the input raw data to post to various ledgers, to prepare financial reports. E.g. QuickBooks software.
• Storage: storage component stores all the information which are relevant ranging from raw input data to final reports. E.g. computer hard drive, cloud storages like google drive
• Output Devices: output devices are the devices which display the accounting information. E.g. printers, monitor.