01.Accounting Information System.ppt
-
Upload
ratan-gohel -
Category
Documents
-
view
219 -
download
0
Transcript of 01.Accounting Information System.ppt
Accounting Information Accounting Information SystemsSystems
Rakesh S. Rakesh S. PandyaPandya
Describe an effective Describe an effective accountingaccounting
information system.information system.
Objective 1Objective 1
22Accounting Information System - 1 (RS Accounting Information System - 1 (RS Pandya)Pandya)
Control
Compatibility
Flexibility
Cost/benefit relationship
Basic FeaturesBasic Features
33Accounting Information System - 1 (RS Accounting Information System - 1 (RS Pandya)Pandya)
Basic FeaturesBasic Features
Compatibility Compatibility means that the means that the system works smoothly with system works smoothly with operations, personnel, and the operations, personnel, and the organizational structure.organizational structure.
44Accounting Information System - 1 (RS Accounting Information System - 1 (RS Pandya)Pandya)
Internal controlsInternal controls are the methods are the methods and procedures used to authorize and procedures used to authorize transactions and safeguard transactions and safeguard assets.assets.
Basic FeaturesBasic Features FlexibilityFlexibility relates to the system’s relates to the system’s
ability to accommodate changes in ability to accommodate changes in the organization.the organization.
55Accounting Information System - 1 (RS Accounting Information System - 1 (RS Pandya)Pandya)
A A cost/benefit relationshipcost/benefit relationship indicates that the cost of controls indicates that the cost of controls do not exceed their value to the do not exceed their value to the organization.organization.
CompanyPersonnel
Hardware
Software
Computerized Accounting Computerized Accounting SystemSystem
66Accounting Information System - 1 (RS Accounting Information System - 1 (RS Pandya)Pandya)
Computerized Accounting Computerized Accounting SystemSystem HardwareHardware is the electronic equipment is the electronic equipment
that makes up a computer system.that makes up a computer system. Software Software is a system of instructions is a system of instructions
that drive the computer to perform that drive the computer to perform various functions.various functions.
Properly trained Properly trained personnelpersonnel are critical are critical to the successful operations of the to the successful operations of the system.system.
77Accounting Information System - 1 (RS Accounting Information System - 1 (RS Pandya)Pandya)
Objective 2Objective 2
Understand bothUnderstand bothcomputerized and computerized and
manualmanualaccounting accounting
systems.systems.
88Accounting Information System - 1 (RS Accounting Information System - 1 (RS Pandya)Pandya)
Processing
Input (Source documents)
(Financialstatements)Output
Three Stages ofThree Stages ofData ProcessingData Processing
99Accounting Information System - 1 (RS Accounting Information System - 1 (RS Pandya)Pandya)
Computerized Computerized Accounting SystemAccounting System
entered,entered,editededited
printed toprinted topaper,paper,screenscreen
ACCOUNTING RECORDSACCOUNTING RECORDS
Journals,Journals,Ledgers,Ledgers,
Other recordsOther records
SOFTWARESOFTWAREPROCESSINGPROCESSING
PERSONNELPERSONNELinput transactions, input transactions,
requestrequestreports, protect reports, protect
recordsrecords
REPORTSREPORTSDATADATAINPUTINPUT OUTPUTOUTPUT
postedposted accessed foraccessed forreportsreports
HARDWAREHARDWARE
1010Accounting Information System - 1 (RS Accounting Information System - 1 (RS Pandya)Pandya)
Designing an Accounting Designing an Accounting SystemSystem Design of the accounting system Design of the accounting system
begins with the chart of accounts.begins with the chart of accounts. The chart of accounts lists all The chart of accounts lists all
accounts and their account accounts and their account number in the ledger.number in the ledger.
1111Accounting Information System - 1 (RS Accounting Information System - 1 (RS Pandya)Pandya)
Menu-Driven Accounting Menu-Driven Accounting SystemSystem Computer systems are organized Computer systems are organized
by function or task.by function or task. Computer systems usually have a Computer systems usually have a
choice of processing options on a choice of processing options on a “menu.”“menu.”
1212Accounting Information System - 1 (RS Accounting Information System - 1 (RS Pandya)Pandya)
Menu-Driven Accounting Menu-Driven Accounting SystemSystem
General Receivables Payables Payroll Reports
PostingAccount Maintenance
COMPUTERIZEDACCOUNTING
SYSTEM
Use arrow keys to make choice.
Press <return> to access choice.
Press F7 <escape> to leave menu.
MAIN
Inventory Utilities
Closing
1313Accounting Information System - 1 (RS Accounting Information System - 1 (RS Pandya)Pandya)
Preparing Accounting Preparing Accounting ReportsReports
TrialBalance
FinancialStatements
AccountsReceivable Detail
AccountsPayable Detail
Daily CashReport
Income Statement
Balance Sheet
Statement of Owners’ Equity
Statement of Cash Flows
Use arrow keys to make choice.
Press <return> to access choice.
Press F7 <escape> to leave menu. REPORTS
1414Accounting Information System - 1 (RS Accounting Information System - 1 (RS Pandya)Pandya)
Objective 3Objective 3
Understand how Understand how spreadsheetsspreadsheetsare used in are used in accounting.accounting.
1515Accounting Information System - 1 (RS Accounting Information System - 1 (RS Pandya)Pandya)
Integrated Accounting Integrated Accounting SystemsSystems Computerized accounting systems Computerized accounting systems
are organized by modules.are organized by modules. These modules are separate but These modules are separate but
integrated units.integrated units. A sales transaction entry will update A sales transaction entry will update
two modules:two modules:1 Accounts Receivable/SalesAccounts Receivable/Sales2 Inventory/Cost of Goods SoldInventory/Cost of Goods Sold
1616Accounting Information System - 1 (RS Accounting Information System - 1 (RS Pandya)Pandya)
Ana’s Boutique ExampleAna’s Boutique Example Ana wants to budget for expected Ana wants to budget for expected
cash collections in the month of cash collections in the month of May.May.
Past experience indicates that 50% Past experience indicates that 50% of credit sales are collected in the of credit sales are collected in the month of sales and 50% the month of sales and 50% the following month.following month.
1717Accounting Information System - 1 (RS Accounting Information System - 1 (RS Pandya)Pandya)
Ana’s Boutique ExampleAna’s Boutique Example May sales were $250,000.May sales were $250,000. $50,000 were cash sales.$50,000 were cash sales. April credit sales amounted to April credit sales amounted to
$120,000.$120,000. What are the expected cash What are the expected cash
collections during the month of collections during the month of May?May?
1818Accounting Information System - 1 (RS Accounting Information System - 1 (RS Pandya)Pandya)
Ana’s Boutique ExampleAna’s Boutique Example
May cash salesMay cash sales $ $ 50,00050,000
Collection of April’s credit salesCollection of April’s credit sales 60,00060,000
Collection of May’s credit salesCollection of May’s credit sales 100,000100,000
TotalTotal$210,000$210,000
Spreadsheets make computations like Spreadsheets make computations like these easier.these easier. 1919Accounting Information System - 1 (RS Accounting Information System - 1 (RS
Pandya)Pandya)
Spreadsheet ExampleSpreadsheet Example
Income Statement:
Revenues 100,000
Expenses 60,000
Net Income
Row: 1
2
3
4
5
Column: A B CFormula for B4: =B2–B3
Cursor is on cell B4.
40,000
2020Accounting Information System - 1 (RS Accounting Information System - 1 (RS Pandya)Pandya)
Objective 4Objective 4
Use the sales Use the sales journal,journal,
the cash receipts the cash receipts journal,journal,
and the accounts and the accounts receivablereceivableledger.ledger. 2121Accounting Information System - 1 (RS Accounting Information System - 1 (RS
Pandya)Pandya)
Special JournalsSpecial Journals What are special journals?What are special journals? They are accounting journals used They are accounting journals used
to record one specific type of to record one specific type of transaction.transaction.
What are some examples?What are some examples?Sales Cash Receipts Payroll
Cash DisbursementsPurchases2222Accounting Information System - 1 (RS Accounting Information System - 1 (RS
Pandya)Pandya)
Sales Journal Sales Journal Page 5Page 5InvoiceInvoice AccountAccountAccountAccountPostPost
DateDate NumberNumber DebitedDebited NumberNumber Ref. AmountRef. AmountJan. 2Jan. 2 201 201 Joe Co. Joe Co. 120-122120-122 600.00 600.00Jan. 2Jan. 2 202 202 May Co.May Co. 120-033120-033 700.00 700.00Jan. 2Jan. 2 203 203 XYZ Co.XYZ Co. 120-111120-111 900.00 900.00TOTALTOTAL 2,200.00 2,200.00
120/410120/410
Using the Sales JournalUsing the Sales Journal
2323Accounting Information System - 1 (RS Accounting Information System - 1 (RS Pandya)Pandya)
Sales Journal Page Sales Journal Page 55InvoiceInvoice AccountAccountAccountAccountPostPost
DateDate NumberNumber DebitedDebited NumberNumber Ref. AmountRef. AmountJan. 2Jan. 2 203 203 XYZ Co.XYZ Co. 120-111120-111 900.00 900.00TOTALTOTAL 2,200.00 2,200.00
120/410120/410 General Ledger
Account: Accounts Receivable Account Number: 120 Date Description Post Ref Debit Credit Balance Jan. 2 Sales SJ52,200 2,200
Using the Sales JournalUsing the Sales Journal
2424Accounting Information System - 1 (RS Accounting Information System - 1 (RS Pandya)Pandya)
Using the Sales JournalUsing the Sales Journal Sales Journal Page 5
Invoice Account Account PostDate Number Debited Number Ref. AmountJan. 2 203 XYZ Co. 120-111 900.00
TOTAL 2,200.00 120/410
General Ledger Account: Credit Sales Account Number: 410 Date Description Post Ref Debit Credit Balance Jan. 2 Sales SJ5
2,200 2,200 2525Accounting Information System - 1 (RS Accounting Information System - 1 (RS Pandya)Pandya)
Subsidiary LedgerSubsidiary Ledger A subsidiary ledger is often used to A subsidiary ledger is often used to
provide details on individual provide details on individual balances of...balances of...
– customers (accounts receivable) customers (accounts receivable) and...and...
– suppliers (accounts payable).suppliers (accounts payable).
2626Accounting Information System - 1 (RS Accounting Information System - 1 (RS Pandya)Pandya)
A Control AccountA Control Account What is a control account?What is a control account? It is the general ledger account.It is the general ledger account. It equals the sum of the individual It equals the sum of the individual
account balances in a subsidiary account balances in a subsidiary ledger.ledger.
2727Accounting Information System - 1 (RS Accounting Information System - 1 (RS Pandya)Pandya)
Debits Credits Debits Credits SalesSales Accounts Sales Accounts Sales
DateDate Cash Cash Discounts Discounts Receivable Revenue Receivable Revenue Jan. 2 Jan. 2 200 200 200 200
1111 882882 1818 900900 3030 800 800 800 800 31311,8821,882 1818 900900 1,000 1,000 (101) (101) (420) (420) (112) (112) (410) (410)
Cash Receipts Journal — Cash Receipts Journal — Page 6Page 6
2828Accounting Information System - 1 (RS Accounting Information System - 1 (RS Pandya)Pandya)
Accounts ReceivableAccounts Receivable
XYZ Company Subsidiary LedgerJrnl.
Date Ref. Debit Credit BalanceJan. 2 S.5 900 900 11 CR.6 900 -0-
2929Accounting Information System - 1 (RS Accounting Information System - 1 (RS Pandya)Pandya)
General LedgerGeneral Ledger
Jrnl. DebitDate Ref. Debit Credit BalanceJan. 31 CR.6 1,882
Cash No. 101
3030Accounting Information System - 1 (RS Accounting Information System - 1 (RS Pandya)Pandya)
Cash Receipts JournalCash Receipts Journal Additional columns are provided to enter Additional columns are provided to enter
other account descriptions and amounts.other account descriptions and amounts. Cash receipts amounts affecting Cash receipts amounts affecting
subsidiary ledger accounts are posted subsidiary ledger accounts are posted daily to keep customer balances up to daily to keep customer balances up to date.date.
At month end, foot and crossfoot the At month end, foot and crossfoot the journal and post to the general ledger.journal and post to the general ledger.
3131Accounting Information System - 1 (RS Accounting Information System - 1 (RS Pandya)Pandya)
Objective 5Objective 5
Use the purchase Use the purchase journal, thejournal, the
cash disbursements cash disbursements journal,journal,
and the accounts and the accounts payablepayableledger.ledger. 3232Accounting Information System - 1 (RS Accounting Information System - 1 (RS
Pandya)Pandya)
Purchases JournalPurchases Journal This is designed to account for all This is designed to account for all
purchases of inventory, supplies, purchases of inventory, supplies, services, and other assets on services, and other assets on account.account.
3333Accounting Information System - 1 (RS Accounting Information System - 1 (RS Pandya)Pandya)
Purchases JournalPurchases Journal Cash purchases are recorded in the Cash purchases are recorded in the
cash disbursements journal.cash disbursements journal. At month end the journal is footed At month end the journal is footed
and crossfooted.and crossfooted. Posting to the general ledger is Posting to the general ledger is
similar to posting from sales and similar to posting from sales and cash receipts journals.cash receipts journals.
3434Accounting Information System - 1 (RS Accounting Information System - 1 (RS Pandya)Pandya)
Cash Disbursements Cash Disbursements JournalJournal Most payments are by check and Most payments are by check and
are recorded in the cash are recorded in the cash disbursements journal.disbursements journal.
The cash disbursements journal is The cash disbursements journal is also called:also called:
– check registercheck register– cash payments journalcash payments journal
3535Accounting Information System - 1 (RS Accounting Information System - 1 (RS Pandya)Pandya)
Cash Disbursements Cash Disbursements JournalJournal This has columns for :This has columns for :– datedate– check numbercheck number– payeepayee– cash amount (credit)cash amount (credit)– accounts payable (debit)accounts payable (debit)– description and amount of other debits description and amount of other debits
and credits and credits
3636Accounting Information System - 1 (RS Accounting Information System - 1 (RS Pandya)Pandya)
General JournalGeneral Journal Special journals save much time in Special journals save much time in
recording repetitive transactions recording repetitive transactions and posting to the ledger.and posting to the ledger.
However, some transactions do not However, some transactions do not fit into any of the special journals.fit into any of the special journals.
3737Accounting Information System - 1 (RS Accounting Information System - 1 (RS Pandya)Pandya)
General JournalGeneral Journal Every accounting system needs a Every accounting system needs a
general journal.general journal. What entries are recorded in the What entries are recorded in the
general journal?general journal?– depreciationdepreciation– expiration of prepaid insurance expiration of prepaid insurance – accrual of salaries payable accrual of salaries payable – adjusting and closing entriesadjusting and closing entries
3838Accounting Information System - 1 (RS Accounting Information System - 1 (RS Pandya)Pandya)
General JournalGeneral Journal Many companies record sales Many companies record sales
returns and allowances and returns and allowances and purchase returns in the general purchase returns in the general journal.journal.
A A credit memorandumcredit memorandum is the is the document issued by the seller for a document issued by the seller for a credit to a customer’s Accounts credit to a customer’s Accounts Receivable.Receivable.
3939Accounting Information System - 1 (RS Accounting Information System - 1 (RS Pandya)Pandya)
Purchase Returns and Purchase Returns and AllowancesAllowances A A debit memorandumdebit memorandum is the is the
business document that states that business document that states that the buyer no longer owes the seller the buyer no longer owes the seller for the amount of the returned for the amount of the returned purchases.purchases.
The buyer debits the Accounts The buyer debits the Accounts Payable to the seller and credits Payable to the seller and credits Inventory.Inventory.
4040Accounting Information System - 1 (RS Accounting Information System - 1 (RS Pandya)Pandya)
Balancing the LedgersBalancing the Ledgers At the end of the accounting period:At the end of the accounting period: Total debits and credits of account Total debits and credits of account
balances in the general ledger are balances in the general ledger are equal.equal.
Control account balances are equal Control account balances are equal to the sum of the appropriate to the sum of the appropriate subsidiary ledger accounts.subsidiary ledger accounts.
4141Accounting Information System - 1 (RS Accounting Information System - 1 (RS Pandya)Pandya)
Thank you?Thank you?