Lecture Principles of financial accouting - Chapter 7: Accounting information systems

Chapter 7

Accounting Information Systems

PowerPoint Authors:
Susan Coomer Galbreath, Ph.D., CPA
Charles W. Caldwell, D.B.A., CMA
Jon A. Booker, Ph.D., CPA, CIA
Cynthia J. Rooney, Ph.D., CPA
Winston Kwok, Ph.D., CPA
McGraw­Hill/Irwin

        Copyright © 2011 by The McGraw­Hill Companies, Inc. All rights reserved.


7 ­ 2

C1

Fundamental System Principles
Accounting
information
systems collect
and process data
from transactions
and events,
organize them in
useful reports,
and communicate
results to
decisions makers.

7 ­ 3

C1

Components of Accounting Systems
Increasingly, source documents are
electronic files creating a “paperless”
system.

•Keyboards
•Scanners
•Modems
•Bar-Code Reader

•Hardware
•Software
•Professional Judgment


7 ­ 4

C1

Components of Accounting Systems
•Printer
•Monitor
•Projectors
•Web communications

•CD/DVD
•Hard Drive
•Tape
•Paper Document


7 ­ 5

C2

Special Journals in Accounting


7 ­ 6

C3

Subsidiary Ledgers
Characteristic

Controlling
Account

Subsidiary Ledger

Amounts due
from customers

Accounts

Receivable

Accounts Receivable
Ledger

Amounts owed
to creditors

Accounts
Payable

Accounts Payable
Ledger

Subsidiary ledgers are a listing of individual
accounts with common characteristics.


7 ­ 7

C3

Accounts Receivable Ledger

After
After all
all items
items are
are posted,
posted, the

the balance
balance in
in the
the accounts
accounts receivable
receivable controlling
controlling account
account is
is
equal
equal to
to the
the sum
sum of
of the
the balances
balances in
in the
the accounts
accounts receivable
receivable subsidiary
subsidiary ledger.
ledger.


7 ­ 8

P1

Sales Journal

7 ­ 9

P2

Proving the Ledgers
A schedule of
accounts receivable
lists each customer
and the balance
owed.

The balance of the Accounts Receivable controlling
account in the general ledger should equal the accounts
in the accounts receivable subsidiary ledger.


7 ­ 10

P1

Sales Taxes
Governmental agencies often
require sellers to collect sales
taxes from customers and to
periodically send these taxes
to the appropriate agency.

7 ­ 11

P1

Sales Returns and Allowances
If a company has few sales returns, they may
be recorded in the General Journal.

A company with many sales returns may use
a Sales Returns and Allowances Journal.


7 ­ 12

P1

Cash Receipts Types
1.Cash from credit
customers
2.Cash from cash
sales
3.Cash from other
sources


7 ­ 13

P1

Footing, Crossfooting, and Posting

7 ­ 14

P1


7 ­ 15

P2

Proving the Ledger
A schedule of
accounts payable
lists each supplier
and the balance
owed to them.

The balance of the Accounts Payable controlling
account in the general ledger should equal the
accounts in the accounts payable subsidiary ledger.


7 ­ 16

P1


7 ­ 17

P1

General Journal Transactions
Adjusting
Adjusting
Entries
Entries
Closing
Closing
Entries
Entries
Purchase
Purchase
Returns
Returns &
&
Allowances
Allowances
Sales
Sales
Returns
Returns &
&
Allowances
Allowances


7 ­ 18

Computer Technology in Accounting

Off-the-Shelf Software
Familiar accounting
programs such as
Peachtree® and
QuickBooks® are
designed to be user
friendly and menu
driven.

Integrated Software
Actions taken in one
part of the system
automatically affect
related parts. For
instance, when a
credit sale is entered,
several parts of the
system are
automatically
updated.


7 ­ 19

Data Processing in Accounting
 Online

processing enters and
processes data immediately.

 Batch

processing accumulates
information for a period of time
and then processes all the data
at one time (daily, weekly, or
monthly).


7 ­ 20

Computer Networks in Accounting
Server

Work Stations

Computer networks are links among computers
giving different users access to common
databases and programs.


7 ­ 21

Enterprise Resource
Planning Software (ERP)
Programs
Programs that
that manage
manage and
and integrate

integrate aa
company
company’s
’s vital
vital operations.
operations.


7 ­ 22

A1

Segment Return on Assets
A good AIS collects financial data for a
company’s various segments.
Companies Reporting Operations
by Segments

A segment is a part of a
company that is
separately identified by its
products, services, or
geographic market.
*Total exceeds 100% because companies can report
more than one segment.


7 ­ 23

A1

Segment Return on Assets


7 ­ 24

P3

Appendix 7A: Special Journals
under a Periodic System


7 ­ 25

P3

Appendix 7A: Special Journals
under a Periodic System