ACCOUNTING SYSTEM Definition

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ACCOUNTING SYSTEM is the set of manual and computerized procedures and controls that provide for identifying relevant transactions or events; preparing accurate source documents, entering data into the accounting records accurately, processing transactions accurately, updating master files properly, and generating accurate documents and reports.

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OPERATING CASH FLOW RATIO is a measure of how well current liabilities are covered by the cash flow generated from a companys operations. It is calculated: OCF = Cash Flow From Operations / Current Liabilities.

CAPITAL BUDGET is the estimated amount planned to be expended for capital items in a given fiscal period. Capital items are fixed assets such as facilities and equipment, the cost of which is normally written off over a number of fiscal periods. The capital budget, however, is limited to the expenditures that will be made within the fiscal year comparable to the related operating budgets.

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