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Accounting Information System

Accounting Information System Notes

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Jashly Chavez
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8 views4 pages

Accounting Information System

Accounting Information System Notes

Uploaded by

Jashly Chavez
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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AIS - identifies, collects, processes & communicates economic information of a firm using

variety of technologies.

Transactions - event that affects or is of interest to the org


Financial transaction - event that affects assets & equities of an entity
Non- financial transaction - all other events

Subsystems
TPS - Transaction Processing System
- daily business operations
GL/FRS - General Ledger/Financial Reporting System
- financial statements & reports
MRS - Management Reporting System
- special purpose reports for internal use

Transforming data-info accounting to AIS model


1. Data collection
2. Data processing
3. Data Management
4. Info generation

Users
● Internal - primary users
Management
- analyzing the org performance
- taking appropriate measures
Employees
- assessing company's profit
- consequences on their future & job security
Owners
- analyzing liability & profit of investment
- future course of action

● External - secondary users


Creditors
- determine credit worthiness
Tax authorities
- determine credibility
Investors
- analyze feasibility of investing
Customers
- assess financial position
Regulatory authorities
- ensuring company disclosures is in accordance with rules & regulations
Accountant as System Designer
- domain experts & responsible for conceptual design
- concept design needs specifying criteria

Accountant as System Auditors


External audit - certify fairness of financial statements
Internal audit - independent within an org to examine & evaluate activities
Fraud audit - investigate anomalies & gather evidences

TRANSACTION CYCLE
Revenue Cycle - direct change of finished goods or services

2 MAJOR SUB-SYSTEMS
● Sales Order Processing Subsystem
● Cash Receipt Subsystem

2 MAIN SECTION OF REVENUE CYCLE


● Conceptual Revenue Cycle
● Physical System

THE CONCEPTUAL SYSTEM


- overview of movement of accounting information

3 Revenue Cycle Process


1. Sales Order Procedure
2. Sales Return
3. Cash Receipts Procedure

SALES ORDER PROCEDURE


1. Received order
2. Check credit
3. Pick goods
4. Ship goods
5. Bill's customer

SALES RETURN PROCEDURE


reasons:
● shipped wrong merchandise
● goods were defective
● product was damaged in shipment
● buyer refused deliver because the seller shipped the goods too late or they were
delayed in transit
process:
1. Prepare return slip
2. Prepare credit memo
3. Approve credit memo
4. Update Sales Journal
5. Update Inventory & Accts Receivable
6. Update General Ledger

CASH RECEIPTS PROCEDURE


1. Open mail and prepare remittance advice
2. Record and deposit checks
3. Update accounts receivable
4. Update general ledger
5. Reconcile cash receipts and deposits

REVENUE CYCLE CONTROLS


● Transaction authorization
● Segregation of duties
● Supervision
● Accounting Records
● Access
● Independent verification

THE PHYSICAL SYSTEM


- review of manual procedures & computer-based systems

MANUAL SYSTEM - depicting people, org units, & physical documents & files

SALES ORDER PROCESSING


1. Sales department
2. Credit department approval
3. The shipping department
4. Billing department

SALES RETURN PROCEDURE


1. Receiving department
2. Sales department
3. Processing the credit memo

CASH RECEIPT PROCEDURE


1. Mail room
2. Cash receipt
3. Accounts receivable
4. General ledger
5. Controller's office

COMPUTER-BASED SYSTEMS
automation - using technology to improve the efficiency and effectiveness of a task
reengineering - radically rethinking the business process

1. AUTOMATING SALES ORDER PROCESSING WITH TECHNOLOGY


1. Sales department
2. Credit department approval
3. Warehouse procedure
4. Shipping department

2. REENGINEERING SALES ORDER PROCESSING WITH REAL-TIME TECHNOLOGY


1. Sales Procedure
2. Warehouse Procedure
3. Shipping department

3. GENERAL LEDGER UPDATE PROCEDURE


1. Inventory-control
2. Sales
3. AR control
4. and Cost of goods sold

4. AUTOMATED CASH-RECEIPT PROCEDURE


1. Mail room
2. Cash receipts department
3. AR department
4. Data processing department

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