Copy of Computerized Accounting -Lesson 1

8/13/2019 Copy of Computerized Accounting -Lesson 1

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7-1

Computerized

AccountingSystems

Financial Accounting

Ingram and Albright

Information for Decisions


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Objectives

Once you have completedthis chapter, you should

be able to


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1. Identify the primary components of a

computerized accounting system.

Objectives

Continued

2. Describe the components of a computerized

accounting system used to process data and

produce useful information.

3. Describe how data are processed in various

modules of an accounting system.


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4. Explain the use of relational databases to

perform accounting functions.

Objectives

5. Describe how a database system can be

used to create a simple accounting system.


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1Objective

Identify the primary

components of a

computerized

accounting system.


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Components of a Computerized

Accounting System

Systems that integrate most of the

business information functions as abasis for management decisions are

referred to as enterprise resource

planning (ERP) systems.


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Exhibit 1 Components of an Accounting

Information System


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The sales modulereceives

order data from customers and

maintains accounts receivable

information.


Accounting System


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Information System


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The purchasing and inventory

management moduleprovidespurchase order data to vendors.


Accounting System

Vendors are those who supplyspecific products to a company.


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The purchasing and inventory

management modulemaintainsaccounts payable and inventory

information.


Accounting System


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Information System


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The human resources module

maintains data aboutemployees, including hours

worked and wage rates.

It is used for preparing payroll and

payroll tax information.


Accounting System


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Information System


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The production moduletracks

the flow of costs through themanufacturing process.


Accounting System

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Information System

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The asset management module

identifies long-term asset costs,their expected useful lives, and

where these assets are located

in the company.


Accounting System

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Information System

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The f inancial management

modulekeeps track of debt,repayment schedules, interest

rates, and shareholder

information.


Accounting System

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Information System

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The general ledger/f inancial

reporting moduleprovidesinformation for use by external

stakeholders, including

shareholders and government

regulators.


Accounting System


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Subsidiary Accounts

A subsidiary accounts receivable

ledger would consist of all theindividual customers accounts,

with data about purchases and

payments for each customer.

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Control Accounts

Control accountsare summary accounts

that maintain totals for all subsidiary

accounts of a particular type.

Example: The balance forAccounts

Receivablecontrol accountisthe sum of the balances of all

customer accounts.

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Control Accounts

Records for each controlaccount are maintained in a

companys general ledger.

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2Describe the components

of a computerizedaccounting system used to

process data and produce

useful information.

Objective

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Exhibit 2 Data Processing in a Computerized

Information System

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Using computer

networks, such as

the Internet, to

make customer

sales is referred

to as E-business.

Application

softwareincludes

the computerprogram that

permit data to be

recorded andprocessed.

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A databaseis a set of

computerized files in

which company data

are stored in the

form that facilitates

retrieval and

updating of the data.

A databasemanagement system

controls database

functions to ensuredata are recorded

properly and are

accessed only byauthorized users.

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Exhibit 4 A Computer Network

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A computer networkis a set of hardware

devices that are

linked so they canexchange data

among themselves

using software.

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3Describe how data

are processed invarious modules of

an accounting

system.

Objective

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Customer Salessalesorder

Sales files

Customer files

invoiceAccounting

General

Ledger files

Shipping

cash

goodsInventory files

A Sales Processing ModuleExhibit 5

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Good internal controls requires

that the personnel who accountfor the cash should not also have

physical access to the cash.

The Sales Module

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The Sales Module

Accountsreceivable and

sales revenue

transactions are

recorded at the

time goods are

shipped to

customers.

Cash and accounts

receivabletransactions are

recorded when

cash is received.

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A Purchasing and Inventory

Management Module

Exhibit 6

purchase

orderVendor Purchasing Vendor files

invoice

AccountingGeneral

Ledger files

Receiving

cash

goodsInventory files

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The Purchasing and Inventory

Management Module

The interaction of acompany and its suppliers

is known as supply-chain

management.

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A Human Resources ModuleExhibit 7

Timeworked

Employee Production Production files

AccountingGeneral

Ledger files

Personnel

Cash

Employee filesGovernments

Cash and payroll

tax information

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The Human Resources Module

The human

resource function

in a business is

responsible for

hiring and training

employees.

The data needed to

account for

employee activitiesinvolve

employees hours

and their wages orsalaries.

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A Production ModuleExhibit 8

Orders/forecast

Sales Manufacturing Inventory files

Cost

accountingGeneral

Ledger files

Stores/

warehouse Plant Asset files

Employee files

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The Production Module

A special accounting function,

known as cost accounting,

keeps track of the costs of

resources used in the

manufacturing process.

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4Explain the use of

relational databases toperform accounting

functions.

Objective

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Relational Database

A relational databaseis a set of

related files that are linked sothat files can be updated and

information can be retrieved

from the files efficiently.

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Relational Database

Atableis a file that

contains data represented

as rows and columns.Each column identifies a

particular attribute of the

entity or processdescribed in the table.

Each

attribute inthe table is

referred to

as a field.

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Relational Database

Each table contains

one or more primary

keysthat uniquelyidentifies the entities

or processes recorded

in the rows of thetable.

The primary

key is used to

connect the

tables into

relationships.

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Relational Database

The primary key in one table

connects to the primary key or aforeign keyin another table. A

foreign key is a field that is a

primary key in a different table.

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5Describe how a

database system can beused to create a simple

accounting system.

Objective

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Copying and Opening

the Database

It is highly

recommended that the

database be copied to

a hard drive before it

is used.

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Copying and Opening

the Database

It is a good idea

to make several

copies of the

database under

different names.

FavoriteCookies1.mdb,

FavoriteCookies2.mdb,

and so on

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Database Contents

Tablescontain the data stored in the system.

Queriesare short programs that permit a

user to obtain data from one or more tables.Formsprovide a means for entering or

reading data stored in the database.

Reportsprovide summary informationintended primarily to be printed.

Continued

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Database Contents

Macros are sequences of steps a user

performs to complete a particular task.

Pagesprovide a means of creating webdocuments for accessing a database.

Modules are computer programs to provide

higher level functions in the database.

Documents

Copy of Computerized Accounting -Lesson 1