1. ACCOUNTING INFORMATION SYSTEMS Accounting Principles, Eighth Edition
CHAPTER 7
ACCOUNTING INFORMATION SYSTEMS
Accounting Principles, Eighth Edition

2. Manual Accounting Systems
Basic Concepts of AIS
Manual Accounting Systems
Perform each step in the accounting cycle by hand.
Satisfactory in a company with a low volume of transactions.
Must understand manual accounting systems to understand computerized accounting systems.
LO 1 Identify the basic concepts of an accounting information system.

3. Subsidiary Ledgers Used to keep track of individual balances.
Two common subsidiary ledgers are:
Accounts receivable (customers’)
Accounts payable (creditors’)
Each general ledger control account balance must equal the composite balance of the individual accounts in the related subsidiary ledger.
See illustration 7-2 page 296
LO 2 Describe the nature and purpose of a subsidiary ledger.

4. Subsidiary Ledgers
Relationship of general ledger and subsidiary ledgers
Illustration 7-3
See illustration 7-4 page 296

5. Advantages of Subsidiary Ledgers
1. Show in a single account transactions affecting one customer or one creditor.
2. Free the general ledger of excessive details.
3. Help locate errors in individual accounts.
4. Make possible a division of labor.
LO 2 Describe the nature and purpose of a subsidiary ledger.

6. Do it Subsidiary Ledgers See page 297 & 298
LO 2 Describe the nature and purpose of a subsidiary ledger.

7. Special Journals Used to record similar types of transactions.
Illustration 7-5
If a transaction cannot be recorded in a special journal, the company records it in the general journal.
LO 3 Explain how companies use special journals in journalizing.

8. Review Question Special Journals
Each of the following is a subsidiary ledger except the:
accounts receivable ledger.
accounts payable ledger.
customer’s ledger.
general ledger.
LO 3 Explain how companies use special journals in journalizing.

9. Special Journals Sales Journal
Illustration 7-6
Under a perpetual inventory system, one entry at selling price in Sales Journal results in a debit to Accounts Receivable and a credit to Sales.
Another entry at cost results in a debit to Cost of Goods Sold and a credit to Merchandise Inventory.
LO 3 Explain how companies use special journals in journalizing.

10. POSTING THE SALES JOURNAL
Special Journals
Illustration 7-7
POSTING THE SALES JOURNAL
Companies make daily postings from the sales journal to the individual accounts receivable in the subsidiary ledger.

11. POSTING THE SALES JOURNAL
Special Journals
Illustration 7-7
POSTING THE SALES JOURNAL
Posting to the general ledger is done monthly.
Proving the equality
See illustration 7-8 page 301