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  • Slide 1
  • Acct 316 Acct 316 Acct 316 Overview of Business Processes 2 UAA ACCT 316 Accounting Information Systems Dr. Fred Barbee Chapter
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  • Acct 316 Acct 316 Acct 316 Learning Objectives 1.Explain the three basic functions performed by an accounting information system (AIS). 2.Describe the documents and procedures used in an AIS to collect and process transaction data.
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  • Acct 316 Acct 316 Acct 316 Learning Objectives 3.Discuss the types of information that can be provided by an AIS. 4.Describe the basic internal control objectives of an AIS and explain how they are accomplished.
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  • Acct 316 Acct 316 Acct 316 Meet the players at S&S Hi, Im Susan. Pleased to meet you! Im Scott and Im pleased to meet ya too!
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  • Acct 316 Acct 316 Acct 316 Meet the players... Scott, our grand opening is only two weeks away! Yeah, its a good thing we hired an accountant!
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  • Meet the Accountant... Hi folks, Ashton Fleming here! Among other things, Im responsible for creating the accounting information system for S&S.
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  • WOW! I have a lot of questions! How am I going to organize things? What information does S&S need? Where do I start?
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  • How do I organize all the data that will be collected? How am I going to collect and process data about all the types of transactions that S&S will engage in?
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  • How should I design the AIS so that the information is reliable and accurate?
  • Slide 10
  • Acct 316 Acct 316 Acct 316 The Three Basic Functions of an Accounting Information System
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  • Acct 316 Acct 316 Acct 316 Basic AIS Functions Collect and store data Provide information useful for decision making Provide adequate controls
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  • Detour... Transaction Cycles
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  • Acct 316 Acct 316 Acct 316 Transaction Cycles A transaction processing cycle combines one or more types of transactions having related features or similar objectives.
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  • Acct 316 Acct 316 Acct 316 Transaction Cycles A transaction cycle consists of a set of transactions leading to the recognition of a major economic event on the financial statements
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  • Acct 316 Acct 316 Acct 316 Transaction Cycles It is through the study of transaction cycles that we gain a clear view of a firms processing framework. (See Figure 2-1 p. 25)
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  • Slide 17
  • Lets... At Something Familiar
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  • Cost Flows in a Manufacturing Firm DM DL MOH DM Inv. WIP Inv. FG Inv. WIP Manufacturing Costs COGS S&A Sales - = Gross Margin - Net Income = Balance Sheet Period Costs Income Statement Product Costs Unfinished Finished Sold Used Applied Unused Sale
  • Slide 19
  • EXPENDITURE CYCLE Subsystems Purchasing & A/P Cash Disbursements Payroll CONVERSION CYCLE Subsystems Production Planning and Control Cost Accounting REVENUE CYCLE Subsystems Sales Order Processing and Cash Receipts Labor Materials Plant Customers Cash Fin. Goods Cash
  • Slide 20
  • Lets... At Another Approach
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  • GL & Fin Rpt Cycle Merchandising Shipments Cash Receipts PP&E, Investments Cash Disbursements Sale of Merchandise Purchase of Mdse, & Labor, Etc. Merchandise Receipts
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  • 47 The Revenue Cycle
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  • GL & Fin Rpt Cycle Merchandising Shipments Cash Receipts PP&E, Investments Cash Disbursements Sale of Merchandise Purchase of Mdse, & Labor, Etc. Merchandise Receipts The Revenue Cycle Spans activities from Sale to Receipt of Cash Key Transactions: Sales Cash Receipts
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  • Acct 316 Acct 316 Acct 316 The Revenue Cycle Includes transactions surrounding the recognition of revenue. Sales Accounts Receivable Inventory (some) General Ledger (some)
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  • Acct 316 Acct 316 Acct 316 The Revenue Cycle Capturing and recording of customer orders; Shipment of the goods and the recording of the cost of goods sold.
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  • Acct 316 Acct 316 Acct 316 The Revenue Cycle. The billing process and the recording of sales and accounts receivable; The capturing and recording of cash receipts.
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  • 47 The Expenditure Cycle
  • Slide 28
  • GL & Fin Rpt Cycle Merchandising Shipments Cash Receipts PP&E, Investments Cash Disbursements Sale of Merchandise Purchase of Mdse, & Labor, Etc. Merchandise Receipts The Expenditure Cycle Spans activities from the need for resources/services to payment for that resource/service Key Transactions: Purchases Cash Disbursements
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  • Acct 316 Acct 316 Acct 316 The Expenditure Cycle Includes the transactions surrounding the recognition of expenditures. Purchases Accounts Payable Cash Disbursements Inventory (some) General Ledger (some)
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  • Acct 316 Acct 316 Acct 316 The Expenditure Cycle The preparation and recording of purchase orders; The receipt of goods and the recording of the cost of inventory; The receipt of vendor invoices and the recording of accounts payable;
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  • Acct 316 Acct 316 Acct 316 The Expenditure Cycle The preparation and recording of cash disbursements. The cycle also includes the preparation of employee paychecks and the recording of payroll activities.
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  • Back to... Basic AIS Functions
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  • AIS Function Collect and store data about the organizations business activities and transactions efficiently and effectively Up C And personal l o s e
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  • Acct 316 Acct 316 Acct 316 AIS Function #1 Up Close Capture transaction data on source documents. Record transaction data in journals, which present a chronological record of what occurred.
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  • Acct 316 Acct 316 Acct 316 AIS Function #1 Up Close Post data from journals to ledgers, which sort data by account type.
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  • Data Processing Cycle The Event of Interest The resources affected by that event. The agents who participate in that event.
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  • Process InputOutput SensorControl Feedback Loop Data Files
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  • Acct 316 Acct 316 Acct 316 Capture Transaction Data on Source Documents Sales Invoice Sales Order Purchase Order O Source documents are special forms used to capture transaction data.
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  • Acct 316 Acct 316 Acct 316 Capture Transaction Data on Source Documents Control over data collection is improved by prenumbering each source document. Accuracy and efficiency in recording transaction data can be further improved if source documents are properly designed.
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  • Acct 316 Acct 316 Acct 316 System - Inputs Input documents can be categorized into three types... Source Documents Product Documents Turn-around Documents
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  • Data Collectio n 1 2 3 Sales System Customer Order Sales Order Creation of a Source Document Source Document 1
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  • Data Collectio n Source Document 1 2 3 Sales System Bill Remittance Advice Product Document Customer Order Sales Order A Product Document
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  • Data Collection Source Document 1 2 3 Sales System Bill Remittance Advice Product Document Customer Order Sales Order A Turnaround Document Check 1 1 Remittance Advice Cash Receipts System
  • Slide 44
  • Source DocumentFunction Sales OrderRecord Customer Order Delivery TicketRecord Delivery to Customer Remittance Advice Receive Cash Deposit SlipRecord Amounts Deposited Credit Memo Support Adjustments to Customer Accounts Common Source Documents & FunctionsRevenue Cycle
  • Slide 45
  • Source DocumentFunction Purchase Requisition Request that purchasing department order goods. Purchase OrderRequest goods from vendors. Receiving Report Record receipt of merchandise. CheckPay for items. Common Source Documents & FunctionsExpenditure Cycle
  • Slide 46
  • Source DocumentFunction W4 forms Collect employee withholding data. Time cards Record time worked by employees. Job time tickets Record time spent on specific jobs. Common Source Documents & FunctionsHuman Resource Cycle
  • Slide 47
  • General Ledger and Reporting System Journal Voucher Record entry posted to general ledger. Common Source Documents & FunctionsGeneral Ledger & Reporting System
  • Slide 48
  • Process InputOutput SensorControl Feedback Loop Data Files
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  • Acct 316 Acct 316 Acct 316 Data Processing Updating previously stored information about the resources affected by the event and agents who participated in the activity.
  • Slide 50
  • Acct 316 Acct 316 Acct 316 Data Processing Periodic updating of the data stored is referred to as batch processing. Immediate updating as each transaction occurs is referred to as on-line, real-time processing.
  • Slide 51

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