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Chapter 2

Introduction to Transaction

Processing SystemTPS

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A Financial Transaction is...

an economic event that affects the assets and equities of the firm, is reflected in its accounts, and is measured in monetary terms.

similar types of transactions are grouped together into three transaction cycles: the expenditure cycle( 지출사이클 ), the conversion cycle( 변환사이클 ) the revenue cycle( 수익사이클 ).

Relationship between Transaction Cycles

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Each Cycle has Two Subsystems

Expenditure Cycle( 지출사이클 ): time lag between the two due to credit relations with suppliers:

physical component (acquisition of goods: purchasingpurchasing) financial component (cash disbursementscash disbursements to the supplier)

Conversion Cycle( 변환사이클 ) : production systemproduction system (planning, scheduling, and control of the physical

product through the manufacturing process) cost accounting systemcost accounting system ( 생산에 관련된 원가정보의 흐름을 감독 )

Revenue Cycle( 수익사이클 ): time lag between the two due to credit relations with customers :

physical component (sales order processingsales order processing) financial component (cash receiptscash receipts)

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Manual System Accounting Records

Source Documents( 원시문서 , 원시증빙서류 ) - used to capture and formalize transaction data needed for transaction processing

Product Documents( 결과문서 ) - the result of transaction processing

Turnaround Documents( 회송문서 ) - a product document of one system that becomes a source document for another system

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Manual System Accounting Records

Journals( 분개장 ) - a record of chronological entry special journals( 특수분개장 ) - specific classes of

transactions that occur in high frequency general journal( 일반분개장 ) - nonrecurring, infrequent, and

dissimilar transactions Ledger( 원장 ) - a book of financial accounts

general ledger( 총계정원장 ) - shows activity for each account listed on the chart of accounts

subsidiary ledger( 보조원장 ) - shows activity by detail for each account type

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Flow of Economic Events Into the General Ledger

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SourceDocument

Journal GeneralLedger

FinancialStatements

Audit Trail ( 감사증적 )

감사증적 : 원시증빙서류에서 F/S 까지의 모든 거래 추적- Accountants should be able to trace in both directions.

FinancialStatements

GeneralLedger

JournalSourceDocument

- SamplingSampling and confirmationconfirmation are two common techniques.

Forward:

VouchingBack:

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Verifying Accounts Receivable - The Audit Trail

Accounts Receivable Control Account-General Ledger

Accounts Receivable Subsidiary Ledger (sum of all customers’ receivables)

Sales Journal Cash Receipts Journal

Sales Order Deposit Slip

Remittance AdviceShipping Notice

<Example of Tracing an Audit Trail>

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Computer-Based Systems

The audit trail is less observable in computer-based systems than traditional manual systems.

The data entry and computer programs are the physical trail.

The data are stored in magnetic files.

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Computer Files

Master File( 마스터파일 ) - generally contains account data (e.g., general ledger and subsidiary file)

Transaction File( 거래파일 ) - a temporary file containing transactions since the last update

Reference File( 참조파일 ) - contains relatively constant information used in processing (e.g., tax tables, customer addresses)

Archive File( 기록파일 ) - contains past transactions for reference purposes

EXPLANATION OF STEPS IN FIGURE:

1. Compare the AR balance in the balance sheet with the master file AR control account balance.

2. Reconcile the AR control figure with the AR subsidiary account total.

3. Select a sample of update entries made to accounts in the AR subsidiary ledgerand trace these to transactions in the sales journal (archive file).

4. From these journal entries, identify source documents that can be pulled from their files and verified. If necessary, confirm these source documents by contacting the customers.

Accounting Records in a Computer-Based System

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Documentation Techniques(문서화기법 )

Documentation( 문서화 ) in a CB environment is necessary for many reasons.

Five common documentation techniques: Entity Relationship Diagram( 실체관계흐름도 ) Data Flow Diagrams( 자료 흐름도 ) Document Flowcharts( 문서 흐름도 ) System Flowcharts( 시스템 흐름도 ) Program Flowcharts( 프로그램 흐름도 )

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1. Entity Relationship (ER) Diagram…

is a documentation technique to represent the relationship between entities in a system.

The REA model version of ER is widely used in AIS. REA uses 3 types of entities: resources (cash, raw materials) events (release of raw materials into the

production process) agents (inventory control clerk, vendor,

production worker)

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관계의 정도

represents the numerical mapping between entities: one-to-one one-to-many many-to-many

Sales-person

Car

Customer Order

Vendor Inventory

Assigned

Places

Supply

Entity Relationship Entity

1

M

M M

1

1

관계의 정도

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2. Data Flow Diagrams (DFD)…

use symbols to represent the processes, data sources, data flows, and entities in a system( 시스템내에서의 프로세스 , 자료원천 , 자료흐름 , 실체를 나타내기 위해 기호를 사용 )

represent the logical elements of the system ( 시스템의 논리적 요소를 나타냄 - 실체 처리 , 자료흐름등 )

do not represent the physical system ( 물리적 시스템을 나타내지 않음 )

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Data Flow Diagram Symbols

EntityName

NProcessDescription

Data StoreName

Direction of data flow

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3. Documents Flowcharts…

illustrate the relationship among processes and the documents that flow between them ( 서류작성 및 처리를 보여줌 )

contain more details than data flow diagrams (DFD 보다 더 상세함 )

clearly depict the separation of functions in a system ( 시스템내에서 기능분리를 정확히 묘사 )

Symbol Set for Document Flowcharts

Terminal showing sourceor destination of documentsand reports

Source document orreport

Manual operation

File for storing sourcedocuments andreports

Accounting records(journals, registers,logs, ledgers)

Calculated batch total

On-page connector

Off-page connector

Description of processor comments

Document flowline

Sales Department Credit Department Warehouse Shipping Department

First Stages in Constructing Document Flowchart Showing Areas of Activity

Customer

Customer Order

Prepare Sales

Orders

Sales Order #1Sales Order #1Sales Order #1Sales

Order #1

Sales Order 4

Customer Order

Sales Department Credit Department Warehouse Shipping Department

Finished Document Flowchart Showing Areas of Activity

Customer

Customer Order

Prepare Sales

Orders

Sales Order #1Sales Order #1Sales Order #1Sales

Order #1

N

Sales Order #1

Checks Credit

CreditRecords

Signed SalesOrder #1

Signed SalesOrder #1

DistributeSO and

File

N

Customer OrderSigned Sales

Order #1

Sales Order 4Sales

Order3Sales Order2

Sales Order2

Sales Order 4

Sales Order3Picks

Goods

StockRecords

A

A

Sales Order2

PicksGoods

N

Sales Order3

Customer

Sales Order2

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4. System Flowcharts…

are used to represent the relationship between the key elements--input sources, programs, and output products--of computer systems ( 컴퓨터 시스템의 주요요소인 투입원천 , 프로그램 , 산출물간의 관계를 나타냄 )

depict the type of media being used (paper, magnetic tape, magnetic disks, and terminals)

in practice, not much difference between document and system flowcharts

Systems Flowchart Symbols

Hard copy

Computer process

Direct access storagedevice

Magnetic tape

Terminal input/output device

Process flow

Real-time (online)connection

Video displaydevice

Sales Department Computer Operations Department Warehouse Shipping Department

First Stages in Constructing System Flowchart Showing Areas of Activity

CustomerOrder

Customer

Terminal

Edit and Credit Check

AR FileUpdate

Program

Sales Orders

Inventory

Credit HistFile

Sales Department Computer Operations Department Warehouse Shipping Department

Finished System Flowchart Showing All Facts Translated into Visual Symbols

CustomerOrder

Customer

Terminal

Edit and Credit Check

AR FileUpdate

Program

Sales Orders

Inventory

Sales Order1

PicksGoods

StockRecords

Sales Order1

Sales Order3

Sales Order 3

Sales Order2

PicksGoods

N

Sales Order2

Customer

Sales Order1

A

A

Sales Order 3Sales

Order2Sales Order1

Credit file

N

CustomerOrder

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5. Program Flowcharts…

illustrate the logic used in programs ( 프로그램에 사용된 논리 설명 )

<Program Flowchart Symbols>

Logical process

Decision

Terminal start orend operation

Input/outputoperation

Flow of logicalprocess

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Computer-Based Accounting Systems

Two broad classes of systems: batch systems( 일괄처리시스템 ) real-time systems( 실시간시스템 )

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Batch Processing

A batch is a group of similar transactions that are accumulated over time and then processed together. (batch 는 시간에 따라 누적된 후 함께 처리되는

유사한 거래의 묶음이다 ) 유사한 거래를 일정시간 동안 묶어서 한꺼번에 처리 A time lag exists between the event and the

processing.( 사건발생과 처리사이에 시간차 존재 )

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Advantages of Batch Processing

Organizations can increase efficiency by grouping large numbers of transactions into batches rather than processing each event separately.

Batch processing provides control over the transaction process via control figures.

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Real-Time Systems… process transactions individually at the moment

the economic event occurs ( 사건발생한 순간에 개별적으로 거래를 처리 )

have no time lag between the economic event and the processing ( 사건발생과 처리사이에 시간차 없음 )

generally require greater resources than batch processing since they require dedicated processing capacity; however, these cost differentials are decreasing ( 일반적으로 처리용량을 요구하므로 batch 보다 더 많은 자원 요구 )

oftentimes have longer systems development time

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