Accounting Systems CPA, MBA By Rachelle Agatha, CPA, MBA Slides by Rachelle Agatha, CPA, with excerpts from Warren, Reeve, Duchac

2 Define an accounting system and describe its implementation. Journalize and post transactions in a manual accounting system that uses subsidiary ledgers and special journals. After studying this chapter, you should be able to:

3 Describe and give examples of additional subsidiary ledgers and modified special journals. Understand the overview process of a computerized system. Describe the basic features of e- commerce.

4 Define an accounting system and describe its implementation. Objective 1 5-1

Accounting Systems Growth Process

Once a system has been implemented, feedback, or input from the users of the information can be used to analyze and improve the system.

1. Are an integral part of any organization's financial and business policies and procedures. 2. Ensure that business information is accurate, and ensure that laws and regulations are being followed Internal Controls:

8 Processing methods are the means by which the system collects, summarizes, and reports accounting information. 5-1

9 Processing methods may be either manual or computerized. 5-1

10 Journalize and post transactions in a manual accounting system that uses subsidiary ledgers and special journals. Objective 2 5-2

11 A large number of individual accounts with a common characteristic can be grouped together in a separate ledger called a subsidiary ledger. 5-2

12 The primary ledger, which contains all of the balance sheet and income statement accounts, is called a general ledger. 5-2

13 Each subsidiary ledger is represented in the general ledger by a summarizing account, called the control account. 5-2  Cash is the Control Account for the cash payments and cash receipts  Accounts Receivable is the Control Account for the Acct Rec Ledger  Accounts Payable is the Control Account for the Acct Payable Ledger

14 The individual customers’ accounts are arranged in alphabetical order in a subsidiary ledger called the accounts receivable subsidiary ledger or customers ledger. 5-2

15 The individual creditors’ accounts are arranged in alphabetical order in a subsidiary ledger called the accounts payable subsidiary ledger, or creditors ledger. 5-2

16 17 Cash11 Accts. Pay.21 General Ledger Accts. Rec.12 Supplies14 Accounts Receivable Subsidiary Ledger A BCD Customer Accounts Accounts Payable Subsidiary Ledger A BCD Creditor Accounts General Ledger and Subsidiary Ledgers 5-2

The all-purpose two-column journal, called the general journal or simply the journal can be used for entries that do not fit into any of the special journals.

23 Apply computerized accounting to the revenue and collection cycle. Objective 4 5-4

Transactions are entered from a source document (data entry) Accounting system processes transaction Data is posted to control account via batch posting or real time Month is closed and accounts are updated with all transactions – reports can be run

25 Describe the basic features of e- commerce. Objective 5 5-5

26 Using the Internet to perform business transactions is termed e-commerce. 5-5 e-Commerce

E-commerce (electronic commerce or EC) is the buying and selling of goods and services on the Internet, Also known as E-Business

28 When transactions are between a company and a consumer, it is termed B2C (business-to- consumer) e-commerce. 5-5

29 Three more advanced areas where the Internet is being used for business purposes are:  Supply chain management (SCM)  Consumer relationship management (CRM)  Product life-cycle management (PLM) 5-5

Summary  Accounting Systems  Subsidiary Ledgers  Special Journals  E-Commerce .