Chapter 8USING ACCOUNTING APPLICATIONS

Organization of Accounting Applications

Using Accounting Applications

Accounting Applications and Modules

Purchasing module Sales module Inventory module General ledger module Payroll module Jobs/projects module

Accounting Applications and Modules

Integration of modules

Similarities across modules

Processing Modes

4 covered in this text: Immediate recording

with immediate updating: real-time processing

Batch recording (on-line)

Off-line entry with batch recording

Immediate recording with batch updating

Processing Modes

Immediate recording with immediate updating – real-time processing

Using the sales application

Effect of recording and updating on data tables

Prohibition against deleting posted event records

Real-time system Status reports under a

real-time system

Processing Modes

Immediate recording with

immediate updating – real-time processing

Characteristics: Immediate recording As data are entered,

there is an immediate edit

Immediate update (posting)

Posting to the general ledger module

Event and status reports

Processing Modes

Batch recording (on-line): Data entry steps

1. Accumulate a batch of source documents and calculate batch totals.

2. Enter each event in the batch using an accounting application.

3. Print an edit report of all events in the batch.

4. Review the report and make corrections.

5. Post the batch

Processing Modes

Batch data entry: Edit report as a

control

Processing Modes

Effect of batch recording on tables:

Invoice table before events are recorded

Invoice table after events are recorded

Processing Modes

Effect of posting on tables and reports:

Batch posting as an internal control device

Characteristics of a batch recording system

Processing Modes

Effect of posting on tables and reports:

Characteristics of a batch recording system1. Event documents

not recorded until batch is accumulated

2. Batch control totals calculated before recording events in batch

Processing Modes

Effect of posting on tables and reports:

Characteristics of a batch recording system3. Batch control totals

are entered into the system; batch# is assigned

4. Each event document in the batch is entered one at a time, edited, and compared to data in related tables

Processing Modes

Effect of posting on tables and reports:

Characteristics of a batch recording system5. After all events in

the batch are recorded, edit report is printed

6. Totals on the edit report are compared to the batch control totals; if agree and other data appear accurate, next step is taken

Processing Modes

Effect of posting on tables and reports:

Characteristics of a batch recording system7. Batch is posted; posting date is recorded in the Post_Date field in the event records; summary fields in master tables are updated

Processing Modes

Effect of posting on tables and reports:

Characteristics of a batch recording system

8. Posting to general ledger module may or may not occur at the same time the event records are posted to the master records in the module

9. Event and status reports not up-to-date until batch is posted

Processing Modes

Effect of posting on tables and reports:

Benefits and drawbacks of batch recording

Processing Modes

Off-line entry with batch recording:

Events are recorded electronically but without the use of the main computer

Data entry controls such as record checking are not available

Processing Modes

Off-line entry with batch recording:

After batch is recorded off-line, it is uploaded to the main computer and checked

Report of all the errors detected is printed, corrections are made, and batch is resubmitted

Processing Modes

Immediate recording with batch updating:

Procedures in a batch update system1. No batch totals are

taken 2. Events are

recorded as they occur

Processing Modes

Immediate recording with batch updating:

Procedures in a batch update system3. Form used contains

a “save” button4. System checks are

done as records are being entered

Processing Modes

Immediate recording with batch updating:

Procedures in a batch update system5. Event records are

added to the event table.

6. After several events have been recorded, a list of unposted invoices is printed

Processing Modes

Immediate recording with batch updating:

Procedures in a batch update system7. List of unposted

event records is checked for accuracy but no comparison is made of report totals to batch control totals

Processing Modes

Immediate recording with batch updating:

Procedures in a batch update system 8. If recordings appear

to be accurate, the group of unposted event records is posted to the master tables in the module

Processing Modes

Immediate recording with batch updating:

Procedures in a batch update system 9. Upon posting Set Post_Date field

in event records to the current date

Summary fields in the master table are updated

Processing Modes

Immediate recording with batch updating:

Procedures in a batch update system 10. After posting,

status reports in the module is up to date

11. Event records may or may not be posted to the general ledger

Using Accounting Applications: Additional Issues

Posting to the general ledger:

Sales module General ledger module

Integration of sales module with general ledger module – 2 options

Using Accounting Applications: Additional Issues

Posting to the general ledger:

General ledger module – Option 1

System adds journal entries to Journal_Entry Table

Updates account balances in general ledger as soon as batch of event documents is posted or event is recorded (in a real-time system) in the sales or other module

Using Accounting Applications: Additional Issues

Posting to the general ledger: General ledger module – Option 2

When event records in sales module are posted, general ledger entries are created and stored in general ledger module

Using Accounting Applications: Additional Issues

Purging 4 steps for purging

event records:1. Make sure all event

records in the module have been posted to the module’s master tables and to the general ledger

2. Print event and ledger reports

Using Accounting Applications: Additional Issues

Purging 4 steps for purging

event records:3. Identify records to

be deleted; then archive them to off-line source

4. Delete event records are no longer needed

K E Y T E R M S

Accounting application Archive Batch Batch recording Batch total Batch update Edit report Hash total

K E Y T E R M S

Module Off-line On-line Posting Processing mode Purge Real-time system Record count