Which subsystem of an Accounting Information System is primarily responsible for processing daily financial transactions?

The Transaction Processing System (TPS) is primarily responsible for handling the day-to-day financial transactions within an Accounting Information System. This subsystem is designed to collect, process, and store transaction data efficiently and accurately, ensuring that all financial activities—from sales and purchases to payroll and accounts receivable—are recorded in real time. The TPS provides essential support for operational tasks by maintaining data integrity and facilitating timely reporting of financial information.

In this context, the TPS plays a crucial role in producing the foundational data needed for other systems, such as financial reporting or management reporting systems. By processing daily transactions, it ensures that the financial records are up-to-date and can be utilized for reporting and decision-making purposes.

Other subsystems, such as the Financial Reporting System and the Management Reporting System, rely on the data generated by the TPS but do not process transactions directly. The Internal Control System aims to ensure the integrity and security of transactional data rather than processing those transactions itself. This distinction highlights the primary function of the Transaction Processing System in the overall framework of an Accounting Information System.