Fitzory Health: Accounting Information System Project Report Analysis

This project report provides a comprehensive analysis of an Accounting Information System (AIS) designed for Fitzory Health, a medical center. The report details the AIS implementation, including software customization to manage patient data, billing, inventory, and staff salaries. It explores the accounting cycle within the system, from journal entries to the generation of financial statements such as income statements, balance sheets, and cash flow statements, ensuring adherence to GAAP and IFRS. The report also covers the chart of accounts and the benefits of the system, emphasizing the reduction of mathematical errors and the ease of financial management. It also includes a discussion of the training required for Dr. Freeman and the ongoing support provided, concluding that the customized AIS is an ideal solution for Fitzory Health's accounting needs. The report uses references to academic sources to support its claims and also provides a sample of a final financial statement and chart of accounts in the appendix.

Running Head: Accounting Statement analysis
1
Project Report: Accounting statement analysis

Accounting Statement analysis 2
Contents
Introduction.......................................................................................................................3
Medical overview.............................................................................................................3
Accounting information system........................................................................................3
Accounting cycle..............................................................................................................4
Sample of final statement.................................................................................................5
Chart of accounts..............................................................................................................6
Conclusion........................................................................................................................7
References.........................................................................................................................8
Appendix...........................................................................................................................9
Final financial statement preview.................................................................................9
Chart of accounts........................................................................................................12

Accounting Statement analysis 3
Introduction:
Accounting information system is the storage, process and collection of accounting
and financial data. It is used by the internal management of the company to maintain the
accounting and financial reports of the company and the information about the tax authorities,
creditors, debtors and the investors of the company. It is a computer based way to track the
accounting activity of an organization in terms with IT resources (Boockholdt and Li, 2009).
Accounting system software is prepared according to the need of the customers. It combines
the GAAP and traditional accounting practices together to perform better study.
Medical overview:
According to the case, Fitzory health is a medical centre which is owned by Dr
Freeman. Three doctors would be there in the medical centre which would be open in Oct,
2018. According to the research data and estimation, 800 patients would be there in the
database of the company. The fee of the centre would differ. Dr Freeman wants to set an
accounting information system to manage all the information of the company.
Proposal of Accounting information system:
Accounting information system is prepared according got the demands of the
customers and the process of the customer. In the case, it has been found that the accounting
information system is mainly need by the owner to manage the information about the patients
and to manage the information about the daily patients and their bill amount. In this case, a
customize software would be prepared for Dr Freeman so that he could collect, summarize
and process all accounting and financial information related to their business (Bodnar and
Hopwood, 2001). The accounting information system for the Fitzory Health would include an
easy system to maintain the details about the customers, their issues, total time of their
footfall, bill summary, inventory of the medicine and equipment summary, salary to doctors
and the receptionist etc.
The total cost of this accounting software would be $ 10,000 as the entire package
would be customized and lot efforts would need to be done by the IT people. the software
would need some technical requirement such as if any old patient would come in the centre
than by typing his name in the system, entire details would pop up into the screen and the
system would automatically update the inventory of the centre and will send a notification
when the inventory would be at minimum level (Romney, Steinbart and Cushing, 2000). The

Accounting Statement analysis 4
accounting system would make the process of accounting easier for the company. The
taxation liabilities would also be calculated by the system itself.
However, Dr Freeman has to take the enough training to operate the system. The
implementation of the software would be done by the information technology people in the
system of the Dr Freeman. But to operate the system, a training program would need to be
attended by Dr. Freeman (Romney and Steinbart, 2014). This training program would include
the operating process of the system in which how to set the database, feed the new entry in
the data base, set the taxation percentage etc will be included. The training program would
not take longer time. For any kind of support, our consulting team and the It team would be
there. Though, the annual maintenance is also required for the system. The annual
maintenance charge of the system would be $ 500 and if the Fitzory health wants any update
in the software than they could also contact to our team.
Accounting cycle:
In this customized accounting information system, accounting cycle process has also
been managed. Accounting cycle is a process which ensures the accuracy and conformity of
an organization’s financial statement, the accounting system has helped the companies to
reduce the mathematical errors in the process of the company. The accounting cycle would be
highly automated in this accounting software. Most of the transactions of the company would
be entered through using the specific terms such as the billing information of the patients and
the different bill of the patients.
Accounting cycle of this accounting information system would begin with recording
the journal entries into the system of the company. The entries of Fitzory health has been
recorded firstly in the accounting system which includes the receipt of the patients, total bill
amount of the patients, inventory record of the firm, expenses of the centre and other
transactions (Hall, 2012). After posting the journal entries into the general ledger accounts,
the system would directly prepare an unadjusted trail balance to ensure that the double entry
system has been followed by the system and every debit amount has been credited by the
company simultaneously. After the adjustment of trial balance, adjusting entries are done by
the software to manage all the functions of the firm well.
After it, the financial statements are prepared by the software which includes all the
relevant information of the firm such as total revenue of the form, total expenses, the
operating and non operating expenses of the company, total net profit generated by the firm,

Accounting Statement analysis 5
total assets and liabilities, reserves and capital etc of the company (Laudon and Laudon,
2016). It also evaluates the total cash inflow and outflow of the company. On the basis of this
information, the accounting process leads to successful way.
Sample of final statement:
Final statement includes the income statement, balance sheet, cash flow statement and
changes in equity of an organization. The final statement of the company would be prepared
on the basis of all the transactions of the company, final statement would be prepare after a
specify tie to evaluate the performance and the position of the company on that date. In the
accounting system, it has been found that the accounting information system would be
performed in such a way that with the entry of each transaction of the firm, the stamen of
income statement, balance sheet, cash flow statement and changes in equity of the form
would automatically update (Hall and Bennett, 2011).
Statement of financial performance of the company would include the total revenue of
the firm, total expenses, the operating and non operating expenses of the company, total net
profit generated by the firm etc of the company in particular time period. It generates the
statement of financial performance to evaluate that how much profit has been earned by the
firm. The statement of financial performance would be prepared by the accounting system
information through considering all the accounting rules and regulation of GAAP and the
IFRS. The financial statement of the company would be better and no mathematical error
would be there (Soudani 2012). It explains that the financial statement of the Fitzory health
would be better and it would lead to Dr Freeman in a better way in terms of accounting and
financial scenario.
Statement of financial position of the company would include the total current assets,
total noncurrent assets and total assets of the firm as well as total liabilities and total equity
and capital of the company. Statement of financial position is prepared to evaluate the
position of the firm in the market (Salehi, Rostami and Mogadam, 2010). The accounting
information system generates the statement of financial position to evaluate that what is the
total worth of the company. The statement of financial position would be prepared by the
accounting system information through considering all the accounting rules and regulation of
GAAP and the IFRS. The financial statement of the company would be better and no
mathematical error would be there. It explains that the financial statement of the Fitzory

Accounting Statement analysis 6
health would be better and it would lead to Dr Freeman in a better way in terms of accounting
and financial scenario.
Statement of cash flow of the company would include the total cash inflow and total
cash outflow in terms of operating activities, financial activities and the investing activities of
the company in particular time period. It generates the statement of cash flow to evaluate that
how much cash has been inflow in the firm (Bodnar and Hopwood, 2012). The statement of
cash flow would be prepared by the accounting system information through considering all
the accounting rules and regulation of GAAP and the IFRS. The financial statement of the
company would be better and no mathematical error would be there. It explains that the
financial statement of the Fitzory health would be better and it would lead to Dr Freeman in a
better way in terms of accounting and financial scenario.
Statement of changes in equity of the company would include the total capital of the
company in particular time period which has been used to manage the operations and the
activities of the company. Accounting financial system generates the statement of cash flow
to evaluate that how many changes have taken into the capital of the firm. The statement of
changes in equity would be prepared by the accounting system information through
considering all the accounting rules and regulation of GAAP and the IFRS. The financial
statement of the company would be better and no mathematical error would be there. It
explains that the financial statement of the Fitzory health would be better and it would lead to
Dr Freeman in a better way in terms of accounting and financial scenario (Eldenburg et al,
2010).
It explains that our accounting system would make it easy for the Fitzory health to
manage the accounting process and the accounting cycle. In the accounting system only
initial information is required to be filled and rest all the information would be filled directly.
It would make the process of the company very easy. The sample of final financial statement
of accounting information system has been given in appendix area.
Chart of accounts:
Chart of accounts is a listing of all the accounts which are used in an organization in
preparing the general ledger. The chart of accounts is helpful in managing the entire process
of the accounting system process of a company. It manages the final statement and the
process of an organization. On the basis of the chart of accounts, the process of the
accounting system becomes easy.

Accounting Statement analysis 7
In case of Fritzo Health, all the related chart of accounts has been prepared so that the
better accounting cycle could be managed by the company as well as the performance of the
company could also be maintained (Chapman and Kihn, 2009). These charts are usually
sorted in accounting numbers or the alphabetic order so that they could easily be found and
used by the user of the accounting system.
Conclusion:
To conclude, the customized Accounting information system of Fitzroy health
includes the storage, process and collection of accounting and financial data. It could be used
by the internal management of the company to maintain the accounting and financial reports
of the firm and the information about the tax authorities, creditors, debtors and the investors
of the company. It is a computer based way to track the accounting activity of an organization
in terms with IT resources. Accounting system software is prepared according to the need of
the customers. It combines the GAAP and traditional accounting practices together to
perform better study. No mathematical error would occur into the performance of the
company and thus, this accounting information system is one of the best system for the
Fitzroy health to manage their accounting and financial activities.

Accounting Statement analysis 8
References:
Bodnar, G.H. and Hopwood, W.S., 2001. Accounting lnfoimation Systems.
Bodnar, G.H. and Hopwood, W.S., 2012. Accounting information systems. Pearson Higher
Ed.
Boockholdt, J.L. and Li, D.H., 2009. Accounting information systems: transaction processing
and controls. Irwin/McGraw-Hill.
Chapman, C.S. and Kihn, L.A., 2009. Information system integration, enabling control and
performance. Accounting, organizations and society, 34(2), pp.151-169.
Eldenburg, L., Soderstrom, N., Willis, V. and Wu, A., 2010. Behavioral changes following
the collaborative development of an accounting information system. Accounting,
Organizations and Society, 35(2), pp.222-237.
Hall, J.A. and Bennett, P.E., 2011. Introduction to Accounting Information Systems. South-
Western Cengage Learning.
Hall, J.A., 2012. Accounting information systems. Cengage Learning.
Laudon, K.C. and Laudon, J.P., 2016. Management information system. Pearson Education
India.
Romney, M.B. and Steinbart, P.J., 2014. Accounting information systems. Pearson Higher Ed.
Romney, M.B., Steinbart, P.J. and Cushing, B.E., 2000. Accounting information systems (pp.
638-641). Upper Saddle River, NJ: Prentice Hall.
Salehi, M., Rostami, V. and Mogadam, A., 2010. Usefulness of accounting information
system in emerging economy: Empirical evidence of Iran. International Journal of
Economics and Finance, 2(2), p.186.
Soudani, S.N., 2012. The usefulness of an accounting information system for effective
organizational performance. International Journal of Economics and Finance, 4(5), p.136.

Accounting Statement analysis 9
Appendix:
Final financial statement preview:
Profit &
Loss
Statement
Month Oct 19 Oct 20 Oct
21
Income
Total revenue 5,500 6,750 8,513
Less Total Disc/Comm 130 180 215
Total Net revenue 5,370 6,570 8,298
Less Total Cost of Gooods
Sold
1,900 2,475 3,094
Gross Profit 3,470 4,095 5,204
Expenses
General & Administrative 295 315 315
Marketing & Promotional 150 210 216
Operating Expenses 555 605 668
Motor Vehicle Expenses 95 95 95
Website Expenses 45 45 45
Total Employment
Expenses
215 283 339
Occupancy Costs 585 648 726
Other Expenses 120 160 160
Total Expenses 1,800 2,060 2,264
Yearly Net
Profit /
(Loss)
1,670 2,035 2,940
Total Year to Date Net Profit / (Loss) 1,670 3,705 6,645
Balance Sheet
Month Oct 19 Oct 20 Oct 21
Assets
Current Assets
Cash on hand $1,000.0
0
$5,000.0
0
$25,000.
00
Debtors $3,000.0
0
$4,000.0
0
$8,000.0
0
Prepaid Expenses
General $200.00 $200.00 $200.00
Rates $100.00 $100.00 $100.00
Workcover $25.00 $25.00 $25.00
Insurance $50.00 $50.00 $50.00

Accounting Statement analysis 10
Etc.
Total Prepaid
expenses
$
375.00
$
375.00
$
375.00
Inventory
Raw material $100.00 $125.00
Total Inventory $
-
$
100.00
$
125.00
Short term Investments $
50.00
$
500.00
$
1,000.00
Other current assets $
-
$
1,500.00
$
2,500.00
Total Current Assets $
4,425.00
$
11,475.00
$
37,000.0
0
Fixed Assets
Computer $1,000.0
0
$1,000.0
0
$1,000.0
0
Medicine $500.00 $500.00 $500.00
Office Equipment $500.00 $750.00 $1,500.0
0
Leasehold $150.00 $200.00 $450.00
Buildings & improvements $300.00 $500.00 $800.00
Furniture & Fixtures $100.00 $300.00 $500.00
Etc.
Total Fixed Assets $
550.00
$
1,000.00
$
1,750.00
Total Assets $
4,975.00
$
12,475.00
$
38,750.0
0
Liabilities
Current Liabilities
Bank Overdraft $
-
$
900.00
$
900.00
Credit Card Debt $
500.00
$
800.00
$
1,200.00
Creditors $
300.00
$
1,200.00
$
900.00
GST collected $
50.00
$
500.00
Superannuation $
-
$
15.00
$
80.00
PAYG Witholding Payable $
-
$
20.00
$
60.00
Workcover Insurance Payable $
-
$
40.00
$
40.00
Current portion of long term
debt
$
1,000.00
$
1,000.00
$
1,000.00
Etc.
Total Current Liabilities $
1,800.00
$
4,025.00
$
4,680.00
Long Term Liabilities

Accounting Statement analysis 11
Motor
Vehicle
Loan
$
1,000.00
$
500.00
$
300.00
Equipment
Finance
$
800.00
$
1,500.00
$
1,000.00
Long term Loans $
200.00
$
500.00
$
800.00
Total Long Term Liabilities $
2,000.00
$
2,500.00
$
2,100.00
Total Liabilities $
3,800.00
$
6,525.00
$
6,780.00
Net Assets $
1,175.00
$
5,950.00
$
31,970.0
0
Shareholders Funds ( Equity)
Owners
Funds
$
1,000.00
$
1,745.00
$
23,324.7
5
Retained
Earnings
$
175.00
$
500.00
$
2,000.00
Current Year Profit $
1,670.00
$
3,705.00
$
6,645.25
Total Shareholders
Funds (Equity)
$
2,845.00
$
5,950.00
$
31,970.0
0
Cash Flow Statement
Cashflows from Operations
Cash receipts from customers
(enter positive amounts) Cash Sales $
2,500.00
Cash collected from customers
(debtors)
$
3,000.00
Funding from Creditors
Stock purchased, not yet paid $
300.00
Cash paid for $
1,700.00
(enter negative amounts) Total Expenses $ -
Inventory (stock)purchases $ -
Funding to Debtors
Sales made not yet collected $ -
Net Cash Flow from Operations $
7,500.00
Investing Activities
Cash receipts from
(enter positive amounts) Sale of property and equipment $ -
Matured Investments $
1,000.00

Accounting Statement analysis 12
Cash paid for
(enter negative amounts) Purchase of property and equipment $
500.00
Purchase of investments $
5,000.00
Net Cash Flow from Investing
Activities
$
6,500.00
Financing Activities
Cash receipts from
(enter positive amounts) Increase in short term debt $
50.00
Increase in long term debt $
100.00
Increase in equity (proceeds from
owners)
$
500.00
Cash paid for
(enter negative amounts) Repayment of loans $
1,000.00
Dividends $
500.00
Net Cash Flow from Financing
Activities
$
2,150.00
Net Increase in Cash $
16,150.00
Cash at End of Year $
16,150.00
Chart of accounts:
Chart account Number of chart account
Total revenue 1-100
Total Disc/Comm 1-101
Total Net revenue 1-102
Gross Profit 1-103
General & Administrative 1-104
Marketing & Promotional 1-105
Operating Expenses 1-106
Motor Vehicle Expenses 1-107
Website Expenses 1-108
Total Employment Expenses 1-109
Occupancy Costs 1-110
Other Expenses 1-111
Monthly Net Profit / (Loss) 1-112
Cash on hand 2-100
Debtors 2-101
Prepaid expenses 2-102
Inventory
2-103