Which of the following is not a sub-system of Accounting Information System?

An Accounting Information System (AIS) consists of various sub-systems that handle specific accounting functions within an organization.

The typical sub-systems of AIS include:

• Sales and Account Receivable sub-system
• Purchase and Account Payable sub-system
• Payroll sub-system
• Inventory sub-system
• Fixed Assets sub-system
• General Ledger sub-system
• Costing sub-system
• Expense Accounting sub-system

Finance sub-system is not considered a sub-system of AIS. Finance is treated as a separate functional area with its own management information system called Financial Management Information System (FMIS).

While accounting focuses on recording, classifying, and summarizing financial transactions, finance deals with broader functions like:

• Capital structure decisions
• Investment and financing decisions
• Dividend policy
• Fund management
• Financial planning

Though accounting and finance are closely related, finance operates as an independent system rather than being a sub-system under AIS.

Options 1, 2, and 4 are all legitimate sub-systems that form part of the Accounting Information System, making Option 3 the correct answer.