Abstract

The article presents information on the accounting system as an operation model of firms. It goes without saying that management is interested in the financial implications of the operating decisions being made within the firm. Thus, the general ledger in the illustrations given provides a means for transferring the actual and forecasted operating changes into their financial statement consequences. This is a straightforward application of the accounting system applied to hypothetical data. On a second level, the accounting system makes a much more significant contribution. Many individual operating models have been developed over the years as a means for solving specific problems. The accounting system may thus be viewed as an executive system which calls these individual programs into use and determines the financial statement implications of the individual operating models. When used in this manner, the accounting system provides a mechanism for coordinating the results derived from these individual programs and for checking the consistency between them. Procedures for performing routine business operations are actually models of segments of the business environment.