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Chapter 11 The Accounting Information System MANAGEMENT INFORMATION SYSTEMS 8/E Raymond McLeod, Jr. and George Schell Copyright 2001 Prentice-Hall, Inc.

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Presentation on theme: "Chapter 11 The Accounting Information System MANAGEMENT INFORMATION SYSTEMS 8/E Raymond McLeod, Jr. and George Schell Copyright 2001 Prentice-Hall, Inc."— Presentation transcript:

1 Chapter 11 The Accounting Information System MANAGEMENT INFORMATION SYSTEMS 8/E Raymond McLeod, Jr. and George Schell Copyright 2001 Prentice-Hall, Inc. 11-1

2 What is Data Processing? n Manipulation or transformation of symbols for the purpose of increasing their usefulness. n Data processing (DP) and transaction processing (TP) are often used interchangeably. n Applied to business data 11-2

3 Accounting Information Systems (AIS) n Gathers data describing a firm’s activity n Transforms data into information n Makes information available to users inside and outside the firm 11-3

4 Environment A Model of an Accounting Information System Information Data Management Dataprocessingsoftware Transform AccountingInformationSystem Database Outputphysicalresources Inputphysicalresources Environment 11-4

5 Data Processing Tasks 1. Gather data –Each transaction is documented –What happened? –When did it happen? –How much (volume, value)? –Transactions describe 11-5

6 2.Manipulate data – Classify (use codes) – Sort – Calculate – Summarize Data Processing Tasks [cont.] 11-6

7 3. Store data –Describes each transaction –Represents most of the database Data Processing Tasks [cont.] 11-7

8 4. Document preparation –Triggers »By an action »By a time schedule –Hardcopy or on-screen Data Processing Tasks [cont.] 11-8

9 Characteristics of the AIS n Performs necessary tasks n Standard procedures n Detailed data n Historical focus n Provides minimal problem-solving information 11-9

10 Sample AIS The Distribution System n Users –Manufacturers –Wholesalers –Retailers n General in nature n Used in many different types of firms –Retailers –Manufacturing –Service 11-10

11 DFDs n Data flow diagram –Document a system in a hierarchical manner –Data flows, processes, environmental elements n Context level is overall system within environment n Leveled and Balanced DFDs 11-11

12 Customers Management Distribution system SuppliersMaterialsstockroom Sales orders Rejected sales order notices Invoices Statements Payments by customers Commitments Purchases orders Shipments Supplier invoices Supplier statements Payments to suppliers Stock Other reports Budgetreports Balance sheet Income statement A Context Diagram of the Distribution System 11-12

13 Customers Sales Orders Rejected sales order notices Invoices Statements Payments by customers Receivables ledger data 1. Fill Orders Inventory ledger data Payables ledger data Other reports Budget reports Balancesheet Income Incomestatement Management Received items items Purchasing data Commitments Purchase Orders 2. Order replenish- ment stock Shipments Supplier invoices Supplier statements Payments to suppliers Suppliers Stock Materialsstockroom A Figure 0 Diagram of the Distribution System 3. Maintain general ledger 11-13

14 Customers 1.3Billing 1.1OrderEntry 1.4Accountsreceivable 1.2Inventory Sales orders Rejected sales order notices Accepted orders Filled items Purchasing data Received items items Inventory Inventory ledger data Receivables ledger data Billed orders Statements Invoices Completed orders orders Payments by customers Payments by customers A Figure 1 Diagram of the Systems that Fill Customer Orders 11-14

15 Purchasing data Commitments Suppliers Suppliers Payments to suppliers Supplier statements Supplier invoices Payable ledger data Materialsstockroom Stock Stock Incurred obligations 2.2 Receiving Issued purchase order data Filledpurchaseorders Shipments Received items Received items Purchase orders Receivedpurchases 2.1 Purchasing 2.3 Accounts payable A Figure 2 Diagram of the Systems that Order Replenishment Stock

16 3.1 Update general ledger Receivables ledger data Receivables ledger data Inventory ledger data Inventory ledger data Payables ledger data Payables ledger data General ledger records Updated general ledger records Generalledger Management report data 3.2 Prepare management reports Other reports Budget reports Balance sheet Income statement Management A Figure 3 Diagram of the Systems That Perform General Ledger Processes

17 Fill Customer Orders n Order entry –Sales order form n Inventory –Process sales –Process receipts –Feed general ledger 11-17

18 Customers Customers Sales orders Edit rejects Sales order edit ejects edit ejects Sales order edit ejects edit ejects Edit order data Rejected Rejected sales order notices notices Editedorders Customer credit file credit fileCustomer Credit data Computer credit credit check check Computer credit credit check check Edited and checked orders Credit Rejects Sales order Sales order credit rejects Accepted orders orders Log in orders Order data Completed orders Mark filled orders Date filed Order log A Figure 1.1 Diagram of the Order Entry System

19 BackorderfileBackorderfile Check the balance on hand Check the balance on hand Check the reorder point Check the reorder point Add received items Add received items Provide general ledger data Provide general ledger data Item records Backorderrecords InventoryfileInventoryfile Itemsavailable Updated item records Filled items Purchasing data Inventory file additions Inventoryrecords Received items Inventory ledger data A Figure 1.2 Diagram of the Inventory System Acceptedorders 11-19

20 Billing n Invoice –Note: »1. Customer data »2. Item data 11-20

21 CustomersCustomers Obtain customer data Customerfile Prepare invoices Filleditems Customer data Invoicedata Billed orders Invoices Completedorders A Figure 1.3 Diagram of the Billing System

22 Accounts Receivable n Four separate triggers –Today's sales –Today's payments –Time to send statements –Need to provide general ledger data 11-22

23 Billed orders Billed orders AccountsreceivablefileAccountsreceivablefile Receivables ledger data Receivablesrecords to delete New receivables Receivables records Prepare statements Customers Payments by customers Paidreceivablesfile Paidreceivablesrecords Statement records Statements A Figure 1.4 Diagram of the Accounts Receivable System Add new receivables Provide general ledger data Delete paid receivables

24 Order Replenishment Stock n Purchasing –Emerging technologies »EDI »ISDN –Purchase order 11-24

25 Supplier file fileSupplier Outstanding purchase purchase order files order filesOutstanding purchase purchase order files order files Select suppliers Purchasing data Past performance data Inventory and supplier data Purchase order data Obtain verbal commitments Suppliers Prepare purchase orders Close out purchase orders Commitments Purchase Orders Issued purchase order data IncurredObligations Purchase order records Filled purchase Orders Purchase records to close out A Figure 2.1 Diagram of the Purchasing System PurchaseOrder history file PurchaseOrder Removed purchase order records 11-25

26 A Figure 2.2 Diagram of the Receiving System Suppliers Purchased items file Purchased process receipts Materialsstockroom Notify other systems Purchased item data Issuedpurchaseorderdata Shipments Stocks Receiptinformation Received items Filled purchase orders Received purchases 11-26

27 Accounts Payable n The firm pays suppliers when: 1.Stock was ordered (P.O. file copy) 2.Stock was received (Received purchases file) 3.Invoice 11-27

28 Paid Payables Records Paid Payables Records Paid Supplier Data AccountspayablefileAccountspayablefile ReceivedpurchasesfileReceivedpurchasesfile PaidpayablesfilePaidpayablesfile SuppliersSuppliers Invoice and statementfile statementfile ReceivedPurchases IncurredObligations New Payables data PayablesRecords Payables Ledger Data ReceiptData Payments to Suppliers Supplier Invoices Invoice Data Payables Records to delete A Figure 2.3 Diagram of the Accounts Payable System Paymentdata Supplierstatements Provide general ledger data Delete paid payables Set up supplier payables records Make supplier payments

29 AIS is the Foundation System n The AIS must be implemented first –MIS –DSS –ES Depends on a well-designed AIS 11-29

30 Summary n AIS maintains financial records of the firm n Data processing components –Data gathering –Data manipulation –Data storage –Document preparation n AIS Subsystems n AIS contributes to problem solving 11-30


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