NOTES IN COMPUTER

(Junapotz)

Computerized Accounting
What is Accounting?
-Methods, procedures, and standards
followed in accumulating, classifying,
recording, and reporting business
events and transaction.
-It has been called the language of
business.
What is transaction?
-is an event that affects or is of
interest to the organization and is
processed by its
information system as a unit work.
Creating a new customer record
Updating new product line and
prices
Creating a new employee record
Receiving payments from a
customer
Picking goods from the
warehouse and delivering them
to the
shipping department
Classification of Transaction
Financial Transaction
-is an economic event that affects the
assets and equities of the
organization, is reflected in its
accounts, and is measured in
monetary terms.
Nonfinancial Transactions
-are do not meet the narrow definition
of a financial transaction.
2 Types of Financial Transaction
1. External Financial Transactions
-are the economic exchanges with
other business entities and
individuals outside the firm.
Sale of goods and services
Purchase of inventory
Receipt of cash
Disbursement of cash
2.Internal Financial Transactions
-involves the exchange or movement
of resources within the
organization

Raw materials into work-inprocess (WIP)

The application of labor and
overhead to WIP
The transfer of WIP into finished
goods inventory
Depreciation of plant and
equipment
Information
-is the data presented in form that is
useful in a decision-making activity.
-is data that have been processed and
are meaningful and useful to users.
The terms meaningful and useful
are value-laden terms and usually
subsume other qualities such as
timeliness, relevance, reliability,
consistency, comparability, etc.
Data
-are facts, which may or may not be
processed ( edited, summarized, or
refined ) and have no direct effect on
the user.
Raw Data are also important because
they mark the starting point Of an
Audit Trail.
What is Audit Trail?
-Accounting records that trace
transactions from their source
documents
to the financial statements.
What Is an Information System?
An Information system is a
framework in which data is
collected, processed,
controlled and managed through
stages in order to provide information
to users.
It evolves over time and
becomes more formalized as a
firm grows and becomes
more complex. It can be a manual
or computerized system
Firms depend on information
systems in order to survive and
stay competitive
Accounting Information System
An Accounting Information
System is a unified structure that
employs physical

resources and components to

transform economic data into
accounting information
for external and internal users.
ACCOUNTING INFORMATION SYSTEMS
An accounting information
system involves collecting and
processing data and
disseminating financial
information to interested
parties.
An AIS may either be manual or
computerized.
The accounting system must be cost
effective.
Benefits of information must outweigh
the cost of providing it.

Accoun
ting
Inform
ation
System
s

Go
ver
nm
ent
Reg
ulat
ion
and
Der
egu
lati
on

Tec
hno
logi
cal
Adv
anc
es

Cha
ngi
ng
Acc
oun
ting
Pri
nci
ple
s

Installing the system, training

personnel, and making the
system wholly operational

MANUAL ACCOUNTING SYSTEMS

In a manual accounting system,
each of the steps in the
accounting cycle is performed
by hand.
This means that transactions
are entered into a journal and
then posted to the ledger.
Financial statements are thus
derived
from many
manual computations
from ledger balances.
So.....why study manual
systems if the
real
world uses computerized
systems?
MANUAL VS. COMPUTERIZED SYSTEMS
Small businesses still abound
and most of them begin
operations with manual
accounting systems and convert
to computerized systems as
business grows.
To understand what
computerized
accounting
systems do, one
must understand how manual
accounting systems work.
SUBSIDIARY LEDGERS
A subsidiary ledger is a group of
accounts with a common

characteristic, such as accounts

receivable.
The subsidiary ledger is
assembled together to facilitate
the recording process by freeing
the general ledger from details
concerning individual balances.
Two common subsidiary ledgers
are the Accounts Receivable
Ledger and the Accounts
Payable Ledger.
CONTROL ACCOUNT
The general ledger account that
summarizes subsidiary ledger
data is called a control account.
Each general ledger control
account balance must equal the
composite balance of the
individual accounts in the
subsidiary ledger.
SUBSIDIARY LEDGERS
Subsidiary ledgers have several
advantages. They:
1 Show transactions affecting one
customer or one creditor in a single
account.
2 Free the general ledger of excessive
details.
3 Help locate errors in individual
accounts by reducing the number of
accounts in one ledger and by using
control accounts.
4 Make possible a division of labor in
posting. One employee posts to the
general ledger while someone else
posts to the subsidiary ledger.
SPECIAL JOURNALS
Special journals are used to
group similar types of
transactions.
If a transaction cannot be
recorded in a special journal, it
is recorded in the general
journal.
Special journals permit greater
division of labor and reduce
time needed to complete the
posting process.
ADVANTAGES OF A SALES JOURNAL

1 One-line entry for each sales

transaction saves time. It is not
necessary to write out the four
account titles for each transaction.
2 Only totals, rather than individual
entries, are posted to the general
ledger. This saves posting time and
reduces the possibilities of errors in
posting.
3 A division of labor results, because
one individual can take responsibility
for the sales journal.
CASH RECEIPTS JOURNAL
The total of the Other Accounts
column is not posted. The
individual amounts comprising
the total are posted separately
to the general ledger
accounts specified in
the
Accounts Credited column
The individual amounts in a
column are posted daily to the
subsidiary ledger account

specified in the Accounts

Credited column
EFFECTS ON GENERAL JOURNAL
Only transactions that cannot
be entered in a special journal
are recorded in the general
journal.
When the entry involves both
control and subsidiary accounts:
1 In journalizing, control and
subsidiary
accounts must be identified
2 In posting there must be a
dual
posting (to the control
account and
subsidiary ledger)