Computerized Accounting Information Systems OVERVIEW - PowerPoint PPT Presentation

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Computerized Accounting Information Systems OVERVIEW

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Title: Components of the Transaction Processing System Author: Rio&Umi 4ever together Last modified by: Rio&Umi 4ever together Created Date: 6/20/2001 2:08:27 AM – PowerPoint PPT presentation

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Title: Computerized Accounting Information Systems OVERVIEW


1
Computerized Accounting Information
SystemsOVERVIEW
2
Transaction Processing System Architectures
  • A firms transaction processing systems may
    either be manual or computerized

3
Computerized Transaction Processing System
T1
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T7
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Display
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4
Components of the Transaction Processing System
  • What are some examples of inputs?
  • customer orders
  • sales slips
  • invoices
  • purchase orders
  • employee time cards

5
Components of the Transaction Processing System
  • Processing involves the use of journals and
    registers to provide a permanent and
    chronological record of inputs.
  • Journals are used to record financial accounting
    transactions.
  • Registers are used to record other types of
    data not directly related to accounting.

6
Components of the Transaction Processing System
  • Special journals are used to record similar and
    recurring transactions.
  • What are examples of special journals?
  • sales journal
  • purchase journal
  • cash receipts journal
  • cash disbursements journal

7
Components of the Transaction Processing System
Source Documents
Cash Receipts Journal
Cash Disbursements Journal
General Journal
Purchases Journal
Sales Journal
8
Components of the Transaction Processing System
  • Ledgers and files provide storage of data in
    both manual and computerized systems.
  • Ledgers provide summaries of a firms financial
    accounting transactions.
  • A file is an organized collection of data.
  • transaction file
  • master file
  • reference or table file

9
Components of the Transaction Processing System
  • What is an output?
  • It is any document generated in the system.
  • What are some examples of outputs?
  • trial balance
  • financial reports
  • operational reports
  • paychecks

10
Designing Double-Entry Systems
  • An accounting system must fit a particular
    organization.
  • What must be taken into account in designing an
    accounting system?
  • the nature and purpose of the organization
  • its structural and functional characteristics
  • its physical layout, products, and services
  • the personnel who operate the system

11
Designing Double-Entry Systems
Hierarchical Model of an Accounting System
Financial Statements
Chart of Accounts
Cycles Revenue Expenditure Production
Sales
Purchasing
Inventory
Application Systems
Payroll
Property
Accounts Receivable
Standard Journal Entries
Identify accounts affected by each application
system
12
Designing Double-Entry Systems
Hierarchical Model of an Accounting System
Financial Statements
Chart of Accounts
Cycles Finance Financial Reporting
Cash
General Ledger
Application Systems
Consolidation
Standard Journal Entries
Identify accounts affected by each application
system
13
Designing Double-Entry Systems
  • What are the four stages involved in the design
    of an accounting system?
  • Design a rough classification of accounts, or
    chart of accounts, and related financial
    statements and reports.
  • Review this with management and operating
    personnel.

14
Designing Double-Entry Systems
  • Finalize statements, chart of accounts, and other
    reports.
  • Prepare a plan of journalizing and design the
    necessary business papers and procedures to
    implement and operate the system.

15
Designing Double-Entry Systems
  • The chart of accounts is a listing of all asset,
    liability, revenue, expense, and equity accounts
    used in an accounting system.
  • It is used to achieve an organizations
    objectives for financial reporting and control.

16
Designing Double-Entry Systems
  • A plan for journalizing and posting transactions
    involves several steps.
  • Step 1 Analyze the natures of activities within
    the four basic transaction cycles.
  • Revenue cycle
  • Expenditure cycle
  • Finance cycle
  • Production cycle

17
Designing Double-Entry Systems
  • It is common to identify a fifth major
    transaction cycle to group accounts that are
    not directly affected by transactional activity.
  • The financial reporting cycle does not process
    transactions involving external parties.

18
Designing Double-Entry Systems
  • Step 2 Group activities within each major
    transaction cycle into application systems.
  • An application system processes a logically
    related set of transactions.
  • Step 3 Develop a complete set of standard or
    recurring journal entries.

19
Designing Double-Entry Systems
  • What are standard journal entries?
  • They are pro forma or hypothetical entries that
    are expected to occur in the normal operation of
    the system.
  • They should indicate three items.
  • The accounts affected by the entry
  • The source of the entry
  • The date or period of the entry

20
Designing Double-Entry Systems
Journal and Journal-Entry Relationship
Sales Journal Page 1
Debits Credits Accounts
Receivable
Sales Date Reference Customers Other Class 1
Class 2 Services Tax Number
120 121 511 512 520
550 Standard
Journal Entry No.
15 Monthly DR. 120 Accounts
ReceivableCustomers DR. 121 Accounts
ReceivableOthers CR. 511 SalesClass 1 CR.
512 SalesClass 2 CR. 520 SalesServices CR.
550 SalesTax
21
Designing Double-Entry Systems
  • The flow of processing in a manual accounting
    system is from source documents to journals,
    journals to ledgers, and from ledgers to
    financial statements.
  • Multiple transaction techniques become essential
    as the volume of transactions grows.

22
Designing Double-Entry Systems
  • What is a one-write system?
  • It is a device that both posts a transaction and
    journalizes it in the same operation.
  • A writing board is designed to allow simultaneous
    recording on several documents arranged and held
    on a special board.

23
Designing Double-Entry Systems
  • What is ledgerless bookkeeping?
  • It is a form of processing in which source
    documents are sorted and filed rather than posted
    to ledgers.
  • The file of source documents replaces a separate
    ledger.

24
Designing Double-Entry Systems
  • Accounts receivable and accounts payable systems
    are typically best suited for ledgerless
    bookkeeping applications.
  • Ledgerless bookkeeping systems have less
    redundancy, and therefore less inherent control.

25
Designing Double-Entry Systems
  • When computers are used to process transactions,
    two different modes of processing accounting
    transactions are possible.
  • Batch processing
  • Direct processing

26
Designing Double-Entry Systems
  • Batch processing is a form of processing in
    which batches of transactions are accumulated and
    processed as a group.
  • Direct processing is a form of processing in
    which individual transactions are processed
    separately.

27
Designing Double-Entry Systems
  • What is data validation?
  • It is the process of reviewing transaction
    details for accuracy and completeness during
    input.

28
Designing Double-Entry Systems
  • The basic double-entry accounting model contains
    just three accounts assets, liabilities, and
    equity.
  • Block coding is a way to organize a chart of
    accounts.
  • It sets aside a block or group of sequential
    account numbers for each major group of accounts.

29
Form Design and Records Retention Considerations
  • Accounting-related forms and papers serve several
    functions.
  • What are these functions?
  • They serve as a physical medium to store and
    transmit data.
  • They transmit authority and responsibility.
  • They assist employees by indicating what data
    should be recorded.

30
Form Design and Records Retention Considerations
  • The fundamental consideration in form design is
    the user.
  • Concerning paper forms, optional design features
    such as multiple colors, prenumbering, and rigid
    specifications for size and quality of the paper
    stock are often desirable.

31
Form Design and Records Retention Considerations
  • Records retention requirements must be considered
    in the design of an accounting system.
  • Various government and tax regulations set
    specific guidelines and legal requirements over
    records retention.

32
Form Design and Records Retention Considerations
  • Records retention must also be considered from
    the internal viewpoint of information storage and
    usage.
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