7-1 Computerized Accounting Systems Electronic Presentation by Douglas Cloud Pepperdine University Chapter F7

7-2 1.Identify the primary components of a computerized accounting system. 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. ObjectivesObjectives Once you have completed this chapter, you should be able to: ContinuedContinued

7-3 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. ObjectivesObjectives

7-41 ObjectiveObjective Identify the primary components of a computerized accounting system.

7-5 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.

7-6 Exhibit 1 Components of an Accounting Information System

7-7 The sales module receives order data from customers and maintains accounts receivable information. Components of a Computerized Accounting System

7-8 Exhibit 1 Components of an Accounting Information System

7-9 The purchases and inventory management module provides purchase order data to vendors. Components of a Computerized Accounting System Vendors are those who supply specific products to a company.

7-10 Exhibit 1 Components of an Accounting Information System

7-11 The human resources module maintains data about employees, including hours worked and wage rates. It is used for preparing payroll and payroll tax information. Components of a Computerized Accounting System

7-12 Exhibit 1 Components of an Accounting Information System

7-13 The production module tracks the flow of costs through the manufacturing process. Components of a Computerized Accounting System

7-14 Exhibit 1 Components of an Accounting Information System

7-15 The asset management module identifies long-term asset costs, their expected useful lives, and where these assets are located in the company. Components of a Computerized Accounting System

7-16 Exhibit 1 Components of an Accounting Information System

7-17 The financial management module keeps track of debt, repayment schedules, interest rates, and shareholder information. Components of a Computerized Accounting System

7-18 Exhibit 1 Components of an Accounting Information System

7-19 The general ledger/financial reporting module provides information for use by external stakeholders, including shareholders and government regulators. Components of a Computerized Accounting System

7-20 Subsidiary Accounts Mom’s Cookie Company Subsidiary accounts include transactions for Mom’s Cookie Company’s individual customers, suppliers, or products. Records for all subsidiary accounts of a particular type are maintained in a subsidiary ledger.

7-21 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 company’s customers.

7-22 Control Accounts Records for each control account are maintained in a company’s general ledger.

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

7-24 Exhibit 2 Data Processing in a Computerized Information System

7-25 Using computer networks, such as the Internet, to make customer sales is referred to as E-business.

7-26 Application software includes the computer programs that permit data to be recorded and processed.

7-27 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.

7-28 A database management system controls database functions to ensure data are recorded properly and are accessed only by authorized users.

7-29 Exhibit 4 A Computer Network

7-30 A computer network is a set of hardware devices that are linked so they can exchange data among themselves using software.

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

7-32 Customer Sales sales order Sales file Customer file invoice Accounting General Ledger files Shipping cash goods Inventory file A Sales Processing Module Exhibit 5

7-33 Good internal controls requires that the personnel who account for the cash should not also have physical access to the cash.

7-34 A Purchases and Inventory Management Module Exhibit 6 Purchase order Vendor Purchasing Vendor files invoice Accounting General Ledger files Receiving cash goods Inventory files

7-35 The Purchasing and Inventory Management Module The interaction of a company and its suppliers is known as supply-chain management.

7-36 A Human Resources Module Exhibit 7 Time worked Employee Production Production files Accounting General Ledger files Personnel Cash Employee files Government Cash and payroll tax information

7-37 A Production Module Exhibit 8 Orders/ forecast Sales Manufacturing Inventory files Cost accounting General Ledger files Stores/ warehouse Plant Asset files Employee files

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

7-39 Relational 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 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.

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

7-41 Copying and Opening the Database It is highly recommended that the database be copied to a hard drive before it is used.

7-42 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.

7-43 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. ContinuedContinued

7-44 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.

7-45 T HE E ND C HAPTER F7

7-46