1 Chapter F 7 Computerized Accounting Systems Electronic

1 Chapter F 7 Computerized Accounting Systems Electronic Presentation by Douglas Cloud Pepperdine University

2 Objectives 1. Identify. Once the primary components you have completed of a computerized accounting system. this chapter, you should 2. Describe the components be able to: 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. Continued

3 Objectives 4. Explain the use of relational databases to perform accounting functions. 5. Describe how a database system can be used to create a simple accounting system.

4 Objective 1 Identify the primary components of a computerized accounting system.

5 Components of a Computerized Accounting Systems that integrate most of the business information functions as a basis for management decisions are referred to as enterprise resource planning (ERP) systems.

6 Exhibit 1 Components of an Accounting Information System

7 Components of a Computerized Accounting System The sales module receives order data from customers and maintains accounts receivable information.

8 Exhibit 1 Components of an Accounting Information System

9 Components of a Computerized Accounting System The purchases and inventory management module provides purchase order data to vendors. Vendors are those who supply specific products to a company.

10 Exhibit 1 Components of an Accounting Information System

11 Components of a Computerized Accounting System The human resources module maintains data about employees, including hours worked and wage rates. It is used for preparing payroll and payroll tax information.

12 Exhibit 1 Components of an Accounting Information System

13 Components of a Computerized Accounting System The production module tracks the flow of costs through the manufacturing process.

14 Exhibit 1 Components of an Accounting Information System

15 Components of a Computerized Accounting System The asset management module identifies long-term asset costs, their expected useful lives, and where these assets are located in the company.

16 Exhibit 1 Components of an Accounting Information System

17 Components of a Computerized Accounting System The financial management module keeps track of debt, repayment schedules, interest rates, and shareholder information.

18 Exhibit 1 Components of an Accounting Information System

19 Components of a Computerized Accounting System The general ledger/financial reporting module provides information for use by external stakeholders, including shareholders and government regulators.

20 Subsidiary Accounts Mom’s Cookie Company Subsidiary accounts include transactions for Mom’s Cookie Company’s individual customers, suppliers, or products. Records for all subsidiary accounts of a particular type are maintained in a subsidiary ledger.

21 Control Accounts Control accounts are summary accounts that maintain totals for all subsidiary accounts of a particular type. Example: The balance for Accounts Receivable is the sum of the balances of all subsidiary accounts for the company’s customers.

22 Control Accounts Records for each control account are maintained in a company’s general ledger.

23 Objective 2 Describe the components of a computerized accounting system used to process data and produce useful information.

24 Exhibit 2 Data Processing in a Computerized Information System

25 Using computer networks, such as the Internet, to make customer sales is referred to as E-business.

26 Application software includes the computer programs that permit data to be recorded and processed.

27 A database is a set of computerized files in which company data are stored in the form that facilitates retrieval and updating of the data.

28 A database management system controls database functions to ensure data are recorded properly and are accessed only by authorized users.

Exhibit 4 A Computer Network 29

30 A computer network is a set of hardware devices that are linked so they can exchange data among themselves using software.

31 Objective 3 Describe how data are processed in various modules of an accounting system.

32 Exhibit 5 Customer A Sales Processing Module sales order Sales Customer file Sales file invoice cash goods Accounting General Ledger files Shipping Inventory file

33 Good internal controls requires that the personnel who account for the cash should not also have physical access to the cash.

Exhibit 6 Vendor A Purchases and Inventory Management Module Purchase order Purchasing Vendor files Accounting General Ledger files Receiving Inventory files invoice cash goods 34

35 The Purchasing and Inventory Management Module The interaction of a company and its suppliers is known as supply-chain management.

36 Exhibit 7 Employee A Human Resources Module Time worked Cash and payroll tax information Government Production files Accounting General Ledger files Personnel Employee files

37 Exhibit 8 Sales A Production Module Orders/ forecast Manufacturing Inventory files Employee files Cost accounting Stores/ warehouse General Ledger files Plant Asset files

38 Objective 4 Explain the use of relational databases to perform accounting functions.

39 Relational Database A relational database is a set of related filesis a file that A table that are linked so that contains data represented files can be as updated rows and columns. Each attribute and information can identifies a Each column in the table is be retrieved from theattribute of the particular referred to as a files efficiently. entity or process field. described in the table.

40 Objective 5 Describe how a database system can be used to create a simple accounting system.

41 Copying and Opening the Database It is highly recommended that the database be copied to a hard drive before it is used.

42 Copying and Opening the Database It is a good idea to make several copies of the database under different names. Moms. Cookies 1. mdb, Moms. Cookies 2. mdb, etc.

43 Database Contents Tables contain the data stored in the system. Queries are short programs that permit a user to obtain data from one or more tables. Forms provide a means for entering or reading data stored in the database. Reports provide summary information intended primarily to be printed. Continued

44 Database Contents Macros are sequences of steps a user performs to complete a particular task. Pages provide a means of creating web documents for accessing a database. Modules are computer programs to provide higher level functions in the database.

45 CHAPTER F 7 THE END

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