Management Information System (MIS) is a planned system of collecting, processing, storing, and disseminating data in the form of information to perform the task of decision making and management of an organization. An organization basically operates in an environment, which is surrounded by its suppliers and customers. The informational needs of the organization emerge from the business processes stratified into its various functional areas.
Thus, in this sense, MIS has a functional relationship with other functional management information systems namely Manufacturing Information System, Human Resource Information System, Accounting Information System, and Marketing Information System. MIS receives information from these functional information systems and uses the received information to make appropriate decisions.
Any interest paid on capital is considered as an expense and is shown in the Profit and Loss Account. Treatment of interest on capital in the final accounts is as follows.
Treatment of interest on drawings in the final accounts is as follows. Firstly, interest in drawings is shown on the credit side of the Profit and Loss Account.
Operating Profit can be defined as the profit earned by carrying the normal business activities. It is computed by subtracting the operating expenses from the gross profit.
The balance sheet is the last financial statement that is prepared by any organization. This statement helps to ascertain the true financial position of an enterprise at the end of an accounting period
A profit and Loss Account is the second financial statement prepared by an organization. This account is prepared to ascertain the net results of a firm in form of net profit earned or net loss incurred during an accounting period.
In order to incorporate adjustments in the financial statements, we pass the required Journal entries, which are termed as adjusting entries.