A ratio expresses the numerical relationship between two numbers. In the words of Kennedy and McMullen, “the relationship of one item to another expressed in simple mathematical form is known as a ratio”. Thus, the ratio is a measuring device to judge the growth, development and present condition of concern. It plays an important role in measuring the comparative significance of the income and position statement. Accounting ratios are expressed in the form of time, proportion, percentage, or per one rupee. Ratio analysis is not only a technique to point out the relationship between two figures but also points out the devices to measure the fundamental strengths or weaknesses of a concern.
The following is a summary from the cash book of BW Ltd for July 2015:
On investigation, it was discovered that:
i) Bank charges of TZS 15 shown on the bank statement have not been entered into the cash book.
ii) A cheque drawn for TZS 110 to pay a supplier has been entered in the cash book as a receipt.
The accounting information system is the system which provides quantitative information about the effects of transactions and other events on accounting entity.
An accounting information system is generally a computer-based method for tracking accounting activities in conjunction with information technology resources. It combines the application of generally accepted accounting principles with the use of information technology resources.