ch07

7-1

PowerPoint Presentation by PowerPoint Presentation by Douglas CloudDouglas Cloud

Professor Emeritus of AccountingProfessor Emeritus of AccountingPepperdine UniversityPepperdine University

© Copyright 2007 Thomson South-Western, a part of The Thomson Corporation. Thomson,

the Star Logo, and South-Western are trademarks used herein under license.

Task Force Image Gallery clip art included in this electronic presentation is used with the

permission of NVTech Inc.

Task Force Image Gallery clip art included in this electronic presentation is used with the

permission of NVTech Inc.

77Computerized Computerized Accounting Accounting SystemsSystems

Financial Accounting

Ingram and Albright

6th edition

Information for DecisionsInformation for Decisions

7-2

ObjectivesObjectivesObjectivesObjectives

Once you have completed this chapter, you should

be able to—

Once you have completed this chapter, you should

be able to—

7-3

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


ContinuedContinuedContinuedContinued

2. Describe the components 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.

7-4

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.

7-5

11ObjectiveObjectiveObjectiveObjective

Identify the primary components of a computerized accounting system.

7-6

Components of a Computerized Components of a Computerized Accounting SystemAccounting 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.

Systems that integrate most of the business information functions as a basis for management decisions are referred to as enterprise resource

planning (ERP) systems.

7-7

Exhibit Exhibit 11Exhibit Exhibit 11 Components of an Accounting Information System

7-8

The sales module receives order data from customers and maintains accounts receivable

information.



7-9


7-10

The purchasing and inventory management module provides purchase order data to vendors.



Vendors are those who supply Vendors are those who supply specific products to a company.specific products to a company.Vendors are those who supply Vendors are those who supply

specific products to a company.specific products to a company.

7-11

The purchasing and inventory management module maintains accounts payable and inventory

information.



7-12


7-13

The human resources module maintains data about

employees, including hours worked and wage rates.

It is used for preparing payroll and It is used for preparing payroll and payroll tax information.payroll tax information.

It is used for preparing payroll and It is used for preparing payroll and payroll tax information.payroll tax information.



7-14


7-15

The production module tracks the flow of costs through the

manufacturing process.



7-16


7-17

The asset management module identifies long-term asset costs, their expected useful lives, and where these assets are located

in the company.



7-18


7-19

The financial management module keeps track of debt,

repayment schedules, interest rates, and shareholder

information.



7-20


7-21

The general ledger/financial reporting module provides

information for use by external stakeholders, including

shareholders and government regulators.



7-22

Subsidiary AccountsSubsidiary AccountsSubsidiary AccountsSubsidiary Accounts

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

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

7-23

Subsidiary AccountsSubsidiary AccountsSubsidiary AccountsSubsidiary Accounts

A subsidiary accounts receivable ledger would consist of all the individual customers accounts, with data about purchases and payments for each customer.

A subsidiary accounts receivable ledger would consist of all the individual customers accounts, with data about purchases and payments for each customer.

7-24

Control AccountsControl AccountsControl AccountsControl Accounts

Control accounts are summary accounts that maintain totals for all subsidiary

accounts of a particular type.

Control accounts are summary accounts that maintain totals for all subsidiary

accounts of a particular type.

Example: Example: The balance for The balance for Accounts Accounts ReceivableReceivable control account control account is is the sum of the balances of all the sum of the balances of all customer accounts.customer accounts.

Example: Example: The balance for The balance for Accounts Accounts ReceivableReceivable control account control account is is the sum of the balances of all the sum of the balances of all customer accounts.customer accounts.

7-25

Control AccountsControl AccountsControl AccountsControl Accounts

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

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

7-26

22Describe the components of a computerized accounting system used to process data and produce useful information.

ObjectiveObjectiveObjectiveObjective

7-27

Exhibit 2Exhibit 2Exhibit 2Exhibit 2 Data Processing in a Computerized Information System

7-28

Using computer networks, such as

the Internet, to make customer sales is referred

to as E-business.

Using computer networks, such as

the Internet, to make customer sales is referred

to as E-business.

Application software includes

the computer program that

permit data to be recorded and processed.

Application software includes

the computer program that

permit data to be recorded and processed.

7-29

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.

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.

A database management system

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

A database management system

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

7-30

Exhibit Exhibit 44Exhibit Exhibit 44 A Computer Network

7-31

A computer network is a set of hardware

devices that are linked so they can

exchange data among themselves using

software.

7-32

33Describe how data are processed in various modules of an accounting system.


7-33

CustomerCustomerCustomerCustomer SalesSales

sales order

Sales filesSales files

Customer filesCustomer files

invoice AccountingAccountingGeneral General

Ledger filesLedger files

ShippingShipping

cash

goodsInventory filesInventory files

A Sales Processing ModuleExhibit 5Exhibit 5Exhibit 5Exhibit 5

7-34

Good internal controls requires that the personnel who account

for the cash should not also have physical access to the cash.

Good internal controls requires that the personnel who account

for the cash should not also have physical access to the cash.

The Sales ModuleThe Sales ModuleThe Sales ModuleThe Sales Module

7-35

The Sales ModuleThe Sales ModuleThe Sales ModuleThe Sales Module

Accounts receivable and sales revenue

transactions are recorded at the time goods are

shipped to customers.

Accounts receivable and sales revenue

transactions are recorded at the time goods are

shipped to customers.

Cash and accounts receivable

transactions are recorded when

cash is received.

Cash and accounts receivable

transactions are recorded when

cash is received.

7-36

A Purchasing and Inventory Management Module

Exhibit 6Exhibit 6Exhibit 6Exhibit 6

purchase orderVendorVendorVendorVendor PurchasingPurchasing Vendor filesVendor files

invoice

AccountingAccountingGeneral General


ReceivingReceiving

cash

goodsInventory filesInventory files

7-37

The Purchasing and Inventory The Purchasing and Inventory Management ModuleManagement Module

The Purchasing and Inventory The Purchasing and Inventory Management ModuleManagement Module

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

management.

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

management.

7-38

A Human Resources ModuleExhibit 7Exhibit 7Exhibit 7Exhibit 7

Time workedEmployeeEmployeeEmployeeEmployee ProductionProduction Production filesProduction files

AccountingAccountingGeneral General


PersonnelPersonnel

Cash

Employee filesEmployee filesGovernmentsGovernmentsGovernmentsGovernments

Cash and payroll tax information

7-39

The Human Resources ModuleThe Human Resources ModuleThe Human Resources ModuleThe Human Resources Module

The human resource function in a business is responsible for

hiring and training employees.

The human resource function in a business is responsible for

hiring and training employees.

The data needed to account for

employee activities involve

employees’ hours and their wages or

salaries.

The data needed to account for

employee activities involve

employees’ hours and their wages or

salaries.

7-40

A Production ModuleExhibit 8Exhibit 8Exhibit 8Exhibit 8

Orders/ forecastSalesSalesSalesSales ManufacturingManufacturing Inventory filesInventory files

Cost accounting

Cost accounting General General


Stores/ warehouseStores/

warehouse Plant Asset filesPlant Asset files

Employee filesEmployee files

7-41

The Production ModuleThe Production ModuleThe Production ModuleThe Production Module

A special accounting function, known as cost accounting, keeps track of the costs of

resources used in the manufacturing process.

A special accounting function, known as cost accounting, keeps track of the costs of

resources used in the manufacturing process.

7-42

44Explain the use of relational databases to perform accounting functions.


7-43

Relational DatabaseRelational DatabaseRelational DatabaseRelational Database

A relational database is a set of related files that are linked so that files can be updated and information can be retrieved

from the files efficiently.

A relational database is a set of related files that are linked so that files can be updated and information can be retrieved

from the files efficiently.

7-44


A table is a file that contains data represented

as rows and columns. Each column identifies a particular attribute of the

entity or process described in the table.

A table is a file that contains data represented

as rows and columns. Each column identifies a particular attribute of the

entity or process described in the table.

Each attribute in the table is

referred to as a field.

Each attribute in the table is

referred to as a field.

7-45


Each table contains one or more primary

keys that uniquely identifies the entities or processes recorded

in the rows of the table.

Each table contains one or more primary

keys that uniquely identifies the entities or processes recorded

in the rows of the table.

The primary key is used to connect the tables into

relationships.

The primary key is used to connect the tables into

relationships.

7-46


The primary key in one table connects to the primary key or a foreign key in another table. A foreign key is a field that is a

primary key in a different table.

The primary key in one table connects to the primary key or a foreign key in another table. A foreign key is a field that is a

primary key in a different table.

7-47

55Describe how a database system can be used to create a simple accounting system.


7-48

Copying and Opening Copying and Opening the Databasethe Database


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

is used.

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

is used.

7-49



It is a good idea to make several

copies of the database under

different names.

It is a good idea to make several

copies of the database under

different names.

FavoriteCookies1.mdb, FavoriteCookies1.mdb, FavoriteCookies2.mdb, FavoriteCookies2.mdb,

and so onand so on

FavoriteCookies1.mdb, FavoriteCookies1.mdb, FavoriteCookies2.mdb, FavoriteCookies2.mdb,

and so onand so on

7-50

Database ContentsDatabase ContentsDatabase ContentsDatabase 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.


7-51

Database ContentsDatabase ContentsDatabase ContentsDatabase 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.

7-52

Exercise 7-2Exercise 7-2Exercise 7-2Exercise 7-2

Click the button to skip this exercise.

Press “Enter” or left click the mouse for solution.

Complete the following sentence with the appropriate term:

If you experience trouble making the button work, type 62 and press “Enter.”


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

database

7-53


2. A _________________ is a set of related files that are linked so the files can be updated and information can be retrieved from the files efficiently.

relational database



7-54


3. An accounting record of each (control) account and the balance of each such is called the _______________________.general ledger




7-55


4. A _______________________________ controls database functions to ensure data are recorded properly and can be accessed only by those authorized to record, update, or retrieve the data.

database management system




7-56


5. A computer program that permits data to be recorded and processed is one kind of ____________________.application software




7-57


6. Financial data about individual items of importance in a company are recorded in ________________________.subsidiary accounts




7-58


7. Summary accounts that maintain totals for all subsidiary accounts of a particular type are called ________________________.control accounts




7-59





8. Systems that integrate most of the business information functions are referred to as ___________________________________.enterprise resource planning (ERP) system

7-60


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




7-61


10. The use of computer networks, such as the Internet, to provide for customer sales is referred to as____________.E-business




7-62

THE ENDTHE END

CCHAPTERHAPTER 7 7

ch07

Documents

computerized components

simple accounting system

accounting information

accounting functions

primary components

database system

accounts payable

inventory information