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

McGraw-Hill/Irwin Copyright 2011 by The McGraw-Hill Companies, Inc. All rights reserved.
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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.
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C1 COMPONENTS OF ACCOUNTING
SYSTEMS
Increasingly, source documents are
electronic files creating a paperless
system.

Keyboards Hardware
Scanners Software
Modems Professional Judgment
Bar-Code Reader
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C1 COMPONENTS OF ACCOUNTING
SYSTEMS
Printer
Monitor
Projectors
Web communications

CD/DVD
Hard Drive
Tape
Paper Document
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C2

SPECIAL JOURNALS IN ACCOUNTING

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C3

SUBSIDIARY LEDGERS
Controlling
Characteristic Subsidiary Ledger
Account

Amounts due Accounts Accounts Receivable

from customers Receivable Ledger
Amounts owed Accounts Accounts Payable
to creditors Payable Ledger

Subsidiary ledgers are a listing of individual

accounts with common characteristics.
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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.
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P1

SALES JOURNAL
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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.
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P1

SALES TAXES

Governmental agencies often

require sellers to collect sales
taxes from customers and to
periodically send these taxes
to the appropriate agency.
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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.
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P1

Cash Receipts Types

1.Cash from credit
customers
2.Cash from cash
sales
3.Cash from other
sources
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P1 FOOTING, CROSSFOOTING, AND

POSTING
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P1
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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.
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P1
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P1

GENERAL JOURNAL TRANSACTIONS

Adjusting
Adjusting
Entries
Entries
Closing
Closing
Entries
Entries
Purchase
Purchase
Returns
Returns &
&
Allowances
Allowances
Sales
Sales
Returns
Returns &&
Allowances
Allowances
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COMPUTER TECHNOLOGY IN
ACCOUNTING
Off-the-Shelf Software Integrated Software
Familiar accounting Actions taken in one
programs such as part of the system
Peachtree and automatically affect
QuickBooks are related parts. For
designed to be user instance, when a
friendly and menu credit sale is entered,
driven.
several parts of the
system are
automatically updated.
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DATA PROCESSING IN ACCOUNTING

Online
processing enters and
processes data immediately.

Batchprocessing accumulates
information for a period of time
and then processes all the data
at one time (daily, weekly, or
monthly).
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COMPUTER NETWORKS IN
ACCOUNTING

Server

Work Stations

Computer networks are links among computers

giving different users access to common
databases and programs.
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ENTERPRISE RESOURCE
PLANNING SOFTWARE (ERP)

Programs
Programs that
that manage
manage and and integrate
integrate aa
company
companyss vital
vital operations.
operations.
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END OF CHAPTER 7