How does the data flow from the transaction (e.g. MRI scan) to financial statements? Use the following key terms in your response: transaction, journal entry, general ledger, financial statement.
Answers (1)
In business and financial analytics, the data flow from transactions to financial statements involves several key steps:
Transaction Recording: Financial transactions are initially recorded in source documents and entered into transactional systems, such as accounting software.
Data Integration: The recorded transactions are then integrated into a centralized database or financial management system, where they are organized and aggregated.
Data Processing: The integrated data undergoes processing, which includes categorization, application of accounting principles, and adjustments to ensure accuracy.
Financial Statement Preparation: Processed data is used to prepare financial statements, including the balance sheet, income statement, and cash flow statement.
Analytics and Reporting: Business and financial analytics tools analyze these financial statements to generate insights into financial performance and trends, aiding in strategic decision-making.
This flow ensures accurate financial reporting and effective analysis, critical for informed business decisions and financial planning.