Accounting information systems CAPITULO 6.pptx

Accounting information sysyems

1. Accounting Information Systems Chapter 6 HORNGREN ♦ HARRISON ♦ BAMBER ♦ BEST ♦ FRASER ♦ WILLETT

2. Objectives 6 - 2 Horngren ♦ Harrison ♦ Bamber ♦ Best ♦ Fraser ♦ Willett, Accounting 4e Copyright © 2004 Pearson Education Australia Horngren ♦ Harrison ♦ Bamber ♦ Best ♦ Fraser ♦ Willett, Accounting 4e Copyright © 2004 Pearson Education Australia Describe the features of an effective accounting information system. Understand how computerised and manual accounting systems work. Understand how spreadsheets are used in accounting Use the sales journal, the cash receipts journal and the accounts receivable subs i diary ledger Use the purchases journal, the cash payments journal and the accounts payable subsidiary ledger

3. Describe the features of an effective accounting information system. 6 - 3 Horngren ♦ Harrison ♦ Bamber ♦ Best ♦ Fraser ♦ Willett, Accounting 4e Copyright © 2004 Pearson Education Australia Horngren ♦ Harrison ♦ Bamber ♦ Best ♦ Fraser ♦ Willett, Accounting 4e Copyright © 2004 Pearson Education Australia Objective 1

4. Control Comparability Flexibility Cost/benefit relationship 6 - 4 Horngren ♦ Harrison ♦ Bamber ♦ Best ♦ Fraser ♦ Willett, Accounting 4e Copyright © 2004 Pearson Education Australia Horngren ♦ Harrison ♦ Bamber ♦ Best ♦ Fraser ♦ Willett, Accounting 4e Copyright © 2004 Pearson Education Australia Basic Features

5. Basic Features 6 - 5 Horngren ♦ Harrison ♦ Bamber ♦ Best ♦ Fraser ♦ Willett, Accounting 4e Copyright © 2004 Pearson Education Australia Horngren ♦ Harrison ♦ Bamber ♦ Best ♦ Fraser ♦ Willett, Accounting 4e Copyright © 2004 Pearson Education Australia Internal controls are the methods and procedures used to authorise transactions and safeguard assets. Comparability means that the system works smoothly with operations, personnel, and the organisational structure.

6. Basic Features 6 - 6 Horngren ♦ Harrison ♦ Bamber ♦ Best ♦ Fraser ♦ Willett, Accounting 4e Copyright © 2004 Pearson Education Australia Horngren ♦ Harrison ♦ Bamber ♦ Best ♦ Fraser ♦ Willett, Accounting 4e Copyright © 2004 Pearson Education Australia Flexibility relates to the system’s ability to accommodate changes in the organisation. A cost/benefit relationship indicates that the cost of controls do not exceed their value to the organisation.

7. Hardware Software Company Personnel 6 - 7 Horngren ♦ Harrison ♦ Bamber ♦ Best ♦ Fraser ♦ Willett, Accounting 4e Copyright © 2004 Pearson Education Australia Horngren ♦ Harrison ♦ Bamber ♦ Best ♦ Fraser ♦ Willett, Accounting 4e Copyright © 2004 Pearson Education Australia Computerised Accounting System

8. Computerised Accounting System 6 - 8 Horngren ♦ Harrison ♦ Bamber ♦ Best ♦ Fraser ♦ Willett, Accounting 4e Copyright © 2004 Pearson Education Australia Horngren ♦ Harrison ♦ Bamber ♦ Best ♦ Fraser ♦ Willett, Accounting 4e Copyright © 2004 Pearson Education Australia Hardware is the electronic equipment that makes up a computer system. Software is a system of instructions that drive the computer to perform various functions. Properly trained personnel are critical to the successful operations of the system.

9. Objective 2 6 - 9 Horngren ♦ Harrison ♦ Bamber ♦ Best ♦ Fraser ♦ Willett, Accounting 4e Copyright © 2004 Pearson Education Australia Horngren ♦ Harrison ♦ Bamber ♦ Best ♦ Fraser ♦ Willett, Accounting 4e Copyright © 2004 Pearson Education Australia Understand how both computerised and manual accounting systems work.

10. Processing Input ( Source documents ) ( Financial statements ) Output Three Stages of Data Processing 6 - 10 Horngren ♦ Harrison ♦ Bamber ♦ Best ♦ Fraser ♦ Willett, Accounting 4e Copyright © 2004 Pearson Education Australia Horngren ♦ Harrison ♦ Bamber ♦ Best ♦ Fraser ♦ Willett, Accounting 4e Copyright © 2004 Pearson Education Australia

11. Computerised Accounting System entered, edited printed to paper, screen ACCOUNTING RECORDS Journals, Ledgers, Other records SOFTWARE PROCESSING PERSONNEL input transactions, request reports, protect records REPORTS DATA INPUT OUTPUT posted accessed for reports HARDWARE 6 - 11 Horngren ♦ Harrison ♦ Bamber ♦ Best ♦ Fraser ♦ Willett, Accounting 4e Copyright © 2004 Pearson Education Australia Horngren ♦ Harrison ♦ Bamber ♦ Best ♦ Fraser ♦ Willett, Accounting 4e Copyright © 2004 Pearson Education Australia

12. Designing an Accounting System Design of the accounting system begins with the chart of accounts. The chart of accounts lists all accounts and their account number in the ledger. 6 - 12 Horngren ♦ Harrison ♦ Bamber ♦ Best ♦ Fraser ♦ Willett, Accounting 4e Copyright © 2004 Pearson Education Australia Horngren ♦ Harrison ♦ Bamber ♦ Best ♦ Fraser ♦ Willett, Accounting 4e Copyright © 2004 Pearson Education Australia

13. Menu- Driven Accounting System 6 - 13 Horngren ♦ Harrison ♦ Bamber ♦ Best ♦ Fraser ♦ Willett, Accounting 4e Copyright © 2004 Pearson Education Australia Horngren ♦ Harrison ♦ Bamber ♦ Best ♦ Fraser ♦ Willett, Accounting 4e Copyright © 2004 Pearson Education Australia Computer systems are organised by function or task. Computer systems usually have a choice of processing options on a “menu.”

14. Menu- Driven Accounting System COMPUTERISED ACCOUNTING SYSTEM Use arrow keys to make choice. Press <return> to access choice. Press F7 <escape> to leave menu. MAIN General Receivables Payables Inventory Payroll Reports Posting Account Maintenance Closing 6 - 14 Horngren ♦ Harrison ♦ Bamber ♦ Best ♦ Fraser ♦ Willett, Accounting 4e Copyright © 2004 Pearson Education Australia Horngren ♦ Harrison ♦ Bamber ♦ Best ♦ Fraser ♦ Willett, Accounting 4e Copyright © 2004 Pearson Education Australia

15. Preparing Accounting Reports Trial Balance Financial Statements Accounts Receivable Detail Accounts Payable Detail Daily Cash Report Statement of Financial Performance Statement of Owners’ Equity Statement of Financial Position Statement of Cash Flows Use arrow keys to make choice. Press <return> to access choice. Press F7 <escape> to leave menu. REPORTS 6 - 15 Horngren ♦ Harrison ♦ Bamber ♦ Best ♦ Fraser ♦ Willett, Accounting 4e Copyright © 2004 Pearson Education Australia Horngren ♦ Harrison ♦ Bamber ♦ Best ♦ Fraser ♦ Willett, Accounting 4e Copyright © 2004 Pearson Education Australia

16. Objective 3 6 - 16 Horngren ♦ Harrison ♦ Bamber ♦ Best ♦ Fraser ♦ Willett, Accounting 4e Copyright © 2004 Pearson Education Australia Horngren ♦ Harrison ♦ Bamber ♦ Best ♦ Fraser ♦ Willett, Accounting 4e Copyright © 2004 Pearson Education Australia Understand how spreadsheets are used in accounting.

17. Integrated Accounting Systems 6 - 17 Horngren ♦ Harrison ♦ Bamber ♦ Best ♦ Fraser ♦ Willett, Accounting 4e Copyright © 2004 Pearson Education Australia Horngren ♦ Harrison ♦ Bamber ♦ Best ♦ Fraser ♦ Willett, Accounting 4e Copyright © 2004 Pearson Education Australia Computerised accounting systems are organised by modules. These modules are separate but integrated units. A sales transaction entry will update two modules: 1 Accounts Receivable / Sales 2 Inventory / Cost of Goods Sold

18. Ana’s Boutique Example 6 - 18 Horngren ♦ Harrison ♦ Bamber ♦ Best ♦ Fraser ♦ Willett, Accounting 4e Copyright © 2004 Pearson Education Australia Horngren ♦ Harrison ♦ Bamber ♦ Best ♦ Fraser ♦ Willett, Accounting 4e Copyright © 2004 Pearson Education Australia Ana wants to budget for expected cash collections in the month of May. Past experience indicates that 50% of credit sales are collected in the month of sales and 50% the following month.

19. Ana’s Boutique Example 6 - 19 Horngren ♦ Harrison ♦ Bamber ♦ Best ♦ Fraser ♦ Willett, Accounting 4e Copyright © 2004 Pearson Education Australia Horngren ♦ Harrison ♦ Bamber ♦ Best ♦ Fraser ♦ Willett, Accounting 4e Copyright © 2004 Pearson Education Australia May sales were $250,000. $50,000 were cash sales. April credit sales amounted to $120,000. What are the expected cash collections during the month of May?

20. Ana’s Boutique Example 6 - 20 Horngren ♦ Harrison ♦ Bamber ♦ Best ♦ Fraser ♦ Willett, Accounting 4e Copyright © 2004 Pearson Education Australia Horngren ♦ Harrison ♦ Bamber ♦ Best ♦ Fraser ♦ Willett, Accounting 4e Copyright © 2004 Pearson Education Australia Collection of April’s credit sales 60,000 Collection of May’s credit sales 100,000 Total $210,000 May cash sales $ 50,000    Spreadsheets make calculations like these easier.

21. Spreadsheet Example Statement of Financial Performance: Revenues 150,000 Expenses 90,000 Net Profit Row: 1 2 3 4 Column: B C Formula for B4: =B2–B3 A 5 Cursor is on cell B4. 60,000 6 - 21 Horngren ♦ Harrison ♦ Bamber ♦ Best ♦ Fraser ♦ Willett, Accounting 4e Copyright © 2004 Pearson Education Australia Horngren ♦ Harrison ♦ Bamber ♦ Best ♦ Fraser ♦ Willett, Accounting 4e Copyright © 2004 Pearson Education Australia

22. Objective 4 6 - 22 Horngren ♦ Harrison ♦ Bamber ♦ Best ♦ Fraser ♦ Willett, Accounting 4e Copyright © 2004 Pearson Education Australia Horngren ♦ Harrison ♦ Bamber ♦ Best ♦ Fraser ♦ Willett, Accounting 4e Copyright © 2004 Pearson Education Australia Use the sales journal, the cash receipts journal, and the accounts receivable subsidiary ledger.

23. Special Journals What are special journals? They are accounting journals used to record one specific type of transaction. What are some examples? Sales Cash Receipts Payroll Cash Payments Purchases 6 - 23 Horngren ♦ Harrison ♦ Bamber ♦ Best ♦ Fraser ♦ Willett, Accounting 4e Copyright © 2004 Pearson Education Australia Horngren ♦ Harrison ♦ Bamber ♦ Best ♦ Fraser ♦ Willett, Accounting 4e Copyright © 2004 Pearson Education Australia

24. Sales Journal Page 5 Date Invoice Number Account Debited Account Number Post Ref. Amount Jan. 2 201 Joe Co. 120-122 ✓ 600.00 Jan. 2 202 May Co. 120-033 ✓ 700.00 Jan. 2 203 XYZ Co. 120-111 ✓ 900.00 TOTAL 120 / 410 2,200.00 6 - 24 Horngren ♦ Harrison ♦ Bamber ♦ Best ♦ Fraser ♦ Willett, Accounting 4e Copyright © 2004 Pearson Education Australia Horngren ♦ Harrison ♦ Bamber ♦ Best ♦ Fraser ♦ Willett, Accounting 4e Copyright © 2004 Pearson Education Australia Using the Sales Journal

25. Sales Journal Page 5 Date Invoice Number Account Debited Account Number Post Ref. Amount Jan. 2 203 XYZ Co. 120 - 111 900.00 TOTAL 2,200.00 120 / 410 General Ledger Account: Accounts Receivable Account Number: 120 Date Description Post Ref Debit Credit Balance Jan. 2 Sales SJ5 2,200 2,200 Using the Sales Journal 6 - 25 Horngren ♦ Harrison ♦ Bamber ♦ Best ♦ Fraser ♦ Willett, Accounting 4e Copyright © 2004 Pearson Education Australia Horngren ♦ Harrison ♦ Bamber ♦ Best ♦ Fraser ♦ Willett, Accounting 4e Copyright © 2004 Pearson Education Australia

26. Using the Sales Journal Page 5 Invoice Account Sales Journal Account Post Amount 900.00 Date Number Debited Number Ref. Jan. 2 203 XYZ Co. 120- 111 ✓ TOTAL 2,200.00 120/410 General Ledger Account Number: 410 Credit Balance Jan. 2 Account: Credit Sales Date Description Post Ref Debit Sales SJ5 2,200 2,200 6 - 26 Horngren ♦ Harrison ♦ Bamber ♦ Best ♦ Fraser ♦ Willett, Accounting 4e Copyright © 2004 Pearson Education Australia Horngren ♦ Harrison ♦ Bamber ♦ Best ♦ Fraser ♦ Willett, Accounting 4e Copyright © 2004 Pearson Education Australia

27. Subsidiary Ledger 6 - 27 Horngren ♦ Harrison ♦ Bamber ♦ Best ♦ Fraser ♦ Willett, Accounting 4e Copyright © 2004 Pearson Education Australia Horngren ♦ Harrison ♦ Bamber ♦ Best ♦ Fraser ♦ Willett, Accounting 4e Copyright © 2004 Pearson Education Australia A subsidiary ledger is often used to provide details on individual balances of... customers (accounts receivable) and... suppliers (accounts payable).

28. A Control Account 6 - 28 Horngren ♦ Harrison ♦ Bamber ♦ Best ♦ Fraser ♦ Willett, Accounting 4e Copyright © 2004 Pearson Education Australia Horngren ♦ Harrison ♦ Bamber ♦ Best ♦ Fraser ♦ Willett, Accounting 4e Copyright © 2004 Pearson Education Australia What is a control account? It is the general ledger account. It equals the sum of the individual account balances in a subsidiary ledger.

29. Debits Credits Sales Accounts Sales Date Cash Revenue Discounts Receivable 200 200 Jan. 2 11 882 18 900 30 800 800 (101) 311,882 18 900 1,000 (420) (112) (410) Cash Receipts Journal — Page 6 6 - 29 Horngren ♦ Harrison ♦ Bamber ♦ Best ♦ Fraser ♦ Willett, Accounting 4e Copyright © 2004 Pearson Education Australia Horngren ♦ Harrison ♦ Bamber ♦ Best ♦ Fraser ♦ Willett, Accounting 4e Copyright © 2004 Pearson Education Australia

30. Accounts Receivable XYZ Company Subsidiary Ledger Date Jrnl. Ref. Debit Credit Balance Jan. 2 S.5 900 900 11 CR.6 900 - 0- 6 - 30 Horngren ♦ Harrison ♦ Bamber ♦ Best ♦ Fraser ♦ Willett, Accounting 4e Copyright © 2004 Pearson Education Australia Horngren ♦ Harrison ♦ Bamber ♦ Best ♦ Fraser ♦ Willett, Accounting 4e Copyright © 2004 Pearson Education Australia

31. General Ledger Cash No. 101 Date Jrnl. Ref. Debit Credit Debit Balance Jan. 31 CR.6 1,882 6 - 31 Horngren ♦ Harrison ♦ Bamber ♦ Best ♦ Fraser ♦ Willett, Accounting 4e Copyright © 2004 Pearson Education Australia Horngren ♦ Harrison ♦ Bamber ♦ Best ♦ Fraser ♦ Willett, Accounting 4e Copyright © 2004 Pearson Education Australia

32. Cash Receipts Journal 6 - 32 Horngren ♦ Harrison ♦ Bamber ♦ Best ♦ Fraser ♦ Willett, Accounting 4e Copyright © 2004 Pearson Education Australia Horngren ♦ Harrison ♦ Bamber ♦ Best ♦ Fraser ♦ Willett, Accounting 4e Copyright © 2004 Pearson Education Australia Additional columns are provided to enter other account descriptions and amounts. Cash receipts amounts affecting subsidiary ledger accounts are posted daily to keep customer balances up to date. At month end, foot and crossfoot the journal and post to the general ledger.

33. Objective 5 6 - 33 Horngren ♦ Harrison ♦ Bamber ♦ Best ♦ Fraser ♦ Willett, Accounting 4e Copyright © 2004 Pearson Education Australia Horngren ♦ Harrison ♦ Bamber ♦ Best ♦ Fraser ♦ Willett, Accounting 4e Copyright © 2004 Pearson Education Australia Use the purchase journal, the cash payments journal, and the accounts payable subsidiary ledger.

34. Purchases Journal 6 - 34 Horngren ♦ Harrison ♦ Bamber ♦ Best ♦ Fraser ♦ Willett, Accounting 4e Copyright © 2004 Pearson Education Australia Horngren ♦ Harrison ♦ Bamber ♦ Best ♦ Fraser ♦ Willett, Accounting 4e Copyright © 2004 Pearson Education Australia This is designed to account for all purchases of inventory, supplies, services, and other assets on account.

35. Purchases Journal 6 - 35 Horngren ♦ Harrison ♦ Bamber ♦ Best ♦ Fraser ♦ Willett, Accounting 4e Copyright © 2004 Pearson Education Australia Horngren ♦ Harrison ♦ Bamber ♦ Best ♦ Fraser ♦ Willett, Accounting 4e Copyright © 2004 Pearson Education Australia Cash purchases are recorded in the cash payments journal. At month end the journal is footed (totaled) and crossfooted. Posting to the general ledger is similar to posting from sales and cash receipts journals.

36. Cash Payments Journal 6 - 36 Horngren ♦ Harrison ♦ Bamber ♦ Best ♦ Fraser ♦ Willett, Accounting 4e Copyright © 2004 Pearson Education Australia Horngren ♦ Harrison ♦ Bamber ♦ Best ♦ Fraser ♦ Willett, Accounting 4e Copyright © 2004 Pearson Education Australia Most payments are by check and are recorded in the cash payments journal. The cash payments journal is also called: cheque register cash disbursements journal

37. Cash Payments Journal 6 - 37 Horngren ♦ Harrison ♦ Bamber ♦ Best ♦ Fraser ♦ Willett, Accounting 4e Copyright © 2004 Pearson Education Australia Horngren ♦ Harrison ♦ Bamber ♦ Best ♦ Fraser ♦ Willett, Accounting 4e Copyright © 2004 Pearson Education Australia This has columns for: Date Cheque number (or transfer number) Account Debited Debits; Other Accounts, Accounts payable Credits Discounts Received, Cash at Bank

38. General Journal 6 - 38 Horngren ♦ Harrison ♦ Bamber ♦ Best ♦ Fraser ♦ Willett, Accounting 4e Copyright © 2004 Pearson Education Australia Horngren ♦ Harrison ♦ Bamber ♦ Best ♦ Fraser ♦ Willett, Accounting 4e Copyright © 2004 Pearson Education Australia Special journals save much time in recording repetitive transactions and posting to the ledger. However, some transactions do not fit into any of the special journals.

39. General Journal 6 - 39 Horngren ♦ Harrison ♦ Bamber ♦ Best ♦ Fraser ♦ Willett, Accounting 4e Copyright © 2004 Pearson Education Australia Horngren ♦ Harrison ♦ Bamber ♦ Best ♦ Fraser ♦ Willett, Accounting 4e Copyright © 2004 Pearson Education Australia Every accounting system needs a general journal. What entries are recorded in the general journal? depreciation expiration of prepaid insurance accrual of salaries payable adjusting and closing entries

40. General Journal 6 - 40 Horngren ♦ Harrison ♦ Bamber ♦ Best ♦ Fraser ♦ Willett, Accounting 4e Copyright © 2004 Pearson Education Australia Horngren ♦ Harrison ♦ Bamber ♦ Best ♦ Fraser ♦ Willett, Accounting 4e Copyright © 2004 Pearson Education Australia Many companies record sales returns and allowances and purchase returns in the general journal. A credit note (or credit memo) is the document issued by the seller for a credit to a customer’s Accounts Receivable.

41. Purchase Returns and Allowances 6 - 41 Horngren ♦ Harrison ♦ Bamber ♦ Best ♦ Fraser ♦ Willett, Accounting 4e Copyright © 2004 Pearson Education Australia Horngren ♦ Harrison ♦ Bamber ♦ Best ♦ Fraser ♦ Willett, Accounting 4e Copyright © 2004 Pearson Education Australia A debit note or debit memorandum is the business document that states that the buyer no longer owes the seller for the amount of the returned purchases. The buyer debits the Accounts Payable to the seller and credits Inventory.

42. Balancing the Ledgers 6 - 42 Horngren ♦ Harrison ♦ Bamber ♦ Best ♦ Fraser ♦ Willett, Accounting 4e Copyright © 2004 Pearson Education Australia Horngren ♦ Harrison ♦ Bamber ♦ Best ♦ Fraser ♦ Willett, Accounting 4e Copyright © 2004 Pearson Education Australia At the end of the accounting period: Total debits and credits of account balances in the general ledger are equal. Control account balances are equal to the sum of the appropriate subsidiary ledger accounts.

43. End of Chapter 6 6 - 43 Horngren ♦ Harrison ♦ Bamber ♦ Best ♦ Fraser ♦ Willett, Accounting 4e Copyright © 2004 Pearson Education Australia Horngren ♦ Harrison ♦ Bamber ♦ Best ♦ Fraser ♦ Willett, Accounting 4e Copyright © 2004 Pearson Education Australia