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Chapter F7 Computerized Accounting Systems

Electronic Presentation
by Douglas Cloud Pepperdine University

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

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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.

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Objective
Identify the primary components of a computerized accounting system.

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Components of a Computerized Accounting System

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

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Exhibit 1

Components of an Accounting Information System

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

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Exhibit 1

Components of an Accounting Information System

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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.

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Exhibit 1

Components of an Accounting Information System

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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.

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Exhibit 1

Components of an Accounting Information System

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

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Exhibit 1

Components of an Accounting Information System

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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.

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Exhibit 1

Components of an Accounting Information System

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

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Exhibit 1

Components of an Accounting Information System

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

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

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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 companys customers.

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Control Accounts
Records for each control account are maintained in a companys general ledger.

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

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Exhibit 2

Data Processing in a Computerized Information System

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

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

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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.

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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

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

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

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Exhibit 5

A Sales Processing Module

sales order Sales Customer file

Customer

Sales file invoice cash Accounting General Ledger files Shipping Inventory file

goods

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

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Exhibit 6

A Purchases and Inventory Management Module

Purchase order Purchasing Vendor files

Vendor

invoice cash Accounting

General Ledger files

goods

Receiving

Inventory files

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The Purchasing and Inventory Management Module

The interaction of a company and its suppliers is known as supply-chain management.

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Exhibit 7

A Human Resources Module

Time worked Production Production files

Employee

Cash Cash and payroll tax information Government Accounting

General Ledger files

Personnel

Employee files

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Exhibit 8

A Production Module
Manufacturing Inventory files Employee files Cost accounting General Ledger files

Sales

Orders/ forecast

Stores/ warehouse

Plant Asset files

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

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

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

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Copying and Opening the Database

It is highly recommended that the database be copied to a hard drive before it is used.

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Copying and Opening the Database

It is a good idea to make several copies of the database under different names. MomsCookies1.mdb, MomsCookies 2.mdb, etc.

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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

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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.

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CHAPTER F7 THE END

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