(6179) 4. Accounting In for Nation System

8/2/2019 (6179) 4. Accounting In for Nation System

1/41

6 -2002 Prentice Hall, Inc. Business Publishing Accounting, 5/E Horngren/Harrison/Bamber

Accounting Information Systems


2/41


Describe the features of

an effective accounting

information system.

Objective 1


3/41


Control

Comparability

Flexibility

Cost/benefit relationship

Basic Features


4/41


Basic Features

Internal controls are the methods and

procedures used to authorize transactions

and safeguard assets.

Comparability means that the system works

smoothly with operations, personnel, and

the organizational structure.


5/41


Basic Features

Flexibility relates to the systems ability to

accommodate changes in the organization.

A cost/benefit relationship indicates that the

cost of controls do not exceed their value to

the organization.


6/41


CompanyPersonnel

Hardware

Software

Computerized Accounting

System


7/41


Computerized Accounting

System Hardware is the electronic equipment that

makes up a computer system.

Software is a system of instructions that

drive the computer to perform various

functions.

Properly trainedpersonnelare critical to the

successful operations of the system.


8/41


Objective 2

Understand how both

computerized and manual

accounting systems work.


9/41


Processing

Input(Source documents)

(Financialstatements)Output

Three Stages of

Data Processing


10/41

6 - 12002 Prentice Hall, Inc. Business Publishing Accounting, 5/E Horngren/Harrison/Bamber

Computerized

Accounting System

entered,edited

printed topaper,screen

ACCOUNTING RECORDS

Journals,Ledgers,

Other records

SOFTWARE

PROCESSING

PERSONNEL

input transactions, requestreports, protect records

REPORTSDATA

INPUT OUTPUT

posted accessed forreports

HARDWARE


11/41


Designing an Accounting System

Design of the accounting system begins

with the chart of accounts.

The chart of accounts lists all accounts and

their account number in the ledger.


12/41


Menu-Driven Accounting

System Computer systems are organized by

function or task.

Computer systems usually have a choice

of processing options on a menu.


13/41


Menu-Driven Accounting

SystemGeneral Receivables Payables Payroll Reports

Posting

Account Maintenance

COMPUTERIZED

ACCOUNTING

SYSTEM

Use arrow keys to make choice.

Press to access choice.

Press F7 to leave menu.

MAIN

Inventory Utilities

Closing


14/41


Preparing Accounting Reports

TrialBalance

FinancialStatements

AccountsReceivableDetail

AccountsPayableDetail

Daily CashReport

Income Statement

Balance Sheet

Statement of Owners Equity

Statement of Cash Flows

Use arrow keys to make choice.

Press to access choice.

Press F7 to leave menu.

REPORTS


15/41


Objective 3

Understand how spreadsheetsare used in accounting.


16/41


Integrated Accounting Systems

Computerized accounting systems are

organized by modules.

These modules are separate but integrated

units.

A sales transaction entry will update two

modules:

1 Accounts Receivable/Sales

2 Inventory/Cost of Goods Sold


17/41


Anas Boutique Example

Ana wants to budget for expected cash

collections in the month of May.

Past experience indicates that 50% of credit

sales are collected in the month of sales and

50% the following month.


18/41



May sales were $250,000.

$50,000 were cash sales.

April credit sales amounted to $120,000.

What are the expected cash collections

during the month of May?


19/41



May cash sales $ 50,000

Collection of Aprils credit sales 60,000 Collection of Mays credit sales 100,000

! Total $210,000

Spreadsheets make computations like theseeasier.


20/41


Spreadsheet Example

Income Statement:

Revenues 100,000

Expenses 60,000

Net Income

Row: 1

2

3

4

5

Column: A B CFormula for B4: =B2B3

Cursor is on cell B4.

40,000


21/41


Objective 4

Use the sales journal,

the cash receipts journal,

and the accounts receivable

subsidiary ledger.


22/41


Special Journals

What are special journals?

They are accounting journals used to record

one specific type of transaction.

What are some examples?

Sales Cash Receipts Payroll

Cash DisbursementsPurchases


23/41


Sales Journal Page 5

InvoiceAccount Account Post

Date Number Debited Number Ref. Amount

Jan. 2 201 Joe Co. 120-122 600.00

Jan. 2 202 May Co. 120-033 700.00

Jan. 2 203 XYZ Co. 120-111 900.00

Using the Sales Journal


24/41



InvoiceAccount Account Post

Date Number DebitedNumber Ref. Amount

Jan. 2 203 XYZ Co. 120-111 900.00

TOTAL

2,200.00

120/410

General LedgerAccount: Accounts Receivable Account Number: 120Date Description Post Ref Debit Credit BalanceJan. 2 Sales SJ5 2,2002,200



25/41




Invoice AccountAccount Post

Date Number DebitedNumber Ref. Amount

Jan. 2 203 XYZ Co. 120-111 900.00

TOTAL

2,200.00

120/410

General LedgerAccount: Credit Sales Account Number: 410Date Description Post Ref Debit Credit BalanceJan. 2 Sales SJ5 2,200 2,200


26/41


Subsidiary Ledger

A subsidiary ledger is often used to provide

details on individual balances of...

customers (accounts receivable) and...

suppliers (accounts payable).


27/41


A Control Account

What is a control account?

It is the general ledger account.

It equals the sum of the individual account

balances in a subsidiary ledger.


28/41


Debits Credits

Sales Accounts SalesDate Cash Discounts Receivable

Revenue Jan. 2

200

200

11882 18

900

30

Cash Receipts Journal Page 6


29/41


Accounts Receivable

XYZ Company Subsidiary Ledger Jrnl.

Date Ref. Debit Credit Balance

Jan. 2 S.5 900 900

11 CR.6 900 -0-


30/41


General Ledger

Jrnl. Debit

Date Ref. Debit Credit Balance

Jan. 31 CR.6 1,882

Cash No. 101


31/41


Cash Receipts Journal

Additional columns are provided to enter

other account descriptions and amounts.

Cash receipts amounts affecting subsidiary

ledger accounts are posted daily to keep

customer balances up to date.

At month end, foot and crossfoot the journaland post to the general ledger.


32/41


Objective 5

Use the purchase journal, the

cash disbursements journal,

and the accounts payable

subsidiary ledger.


33/41


Purchases Journal

This is designed to account for all purchases

of inventory, supplies, services, and other

assets on account.


34/41


Purchases Journal

Cash purchases are recorded in the cash

disbursements journal.

At month end the journal is footed and

crossfooted.

Posting to the general ledger is similar to

posting from sales and cash receiptsjournals.


35/41


Cash Disbursements Journal

Most payments are by check and are

recorded in the cash disbursements journal.

The cash disbursements journal is also

called:

check register

cash payments journal


36/41


Cash Disbursements Journal

This has columns for :

date

check number

payee

cash amount (credit) accounts payable (debit)

description and amount of other debits

and credits


37/41


General Journal

Special journals save much time in

recording repetitive transactions and posting

to the ledger.

However, some transactions do not fit into

any of the special journals.


38/41


General Journal

Every accounting system needs a general

journal.

What entries are recorded in the general

journal?

depreciation

expiration of prepaid insurance

accrual of salaries payable

adjusting and closing entries


39/41


General Journal

Many companies record sales returns and

allowances and purchase returns in the

general journal.

A credit memorandum is the document

issued by the seller for a credit to a

customers Accounts Receivable.


40/41


Purchase Returns and

Allowances

A debit memorandum is the business

document that states that the buyer no

longer owes the seller for the amount ofthe returned purchases.

The buyer debits the Accounts Payable to

the seller and credits Inventory.


41/41


Balancing the Ledgers

At the end of the accounting period:

Total debits and credits of account balances

in the general ledger are equal.

Control account balances are equal to the

sum of the appropriate subsidiary ledger

accounts.

Documents

(6179) 4. Accounting In for Nation System