Lesson 2 Handout.pdf

Chapter 2 Introduction to Transaction Processing

Principles of Accounting Information Systems, Asia Edition James A. Hall ©2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

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Relationship between Transaction Cycles

Figure 2-1

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Manual System Accounting Records  Source Documents  Product Documents  Turnaround Documents

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Manual System Accounting Records  Journals - a record of chronological entry  Ledger - a book of financial accounts

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Flow of Information from Economic Event Into the General Ledger

Figure 2-8

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5

Audit Trail Source Document

Journal

Financial Statements

General Ledger

General Ledger

Journal

Financial Statements

Source Document

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Example of Tracing an Audit Trail Verifying Accounts Receivable Accounts Receivable Control Account-General Ledger Accounts Receivable Subsidiary Ledger (sum of all customers’ receivables) Physical

Sales Journal Sales Order Shipping Notice

Financial

Cash Receipts Journal Deposit Slip Remittance Advice

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Computer-Based Systems  The audit trail is less observable in computerbased systems than traditional manual systems.  The data entry and computer programs are the physical trail.  The data are stored in magnetic files.

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Computer Files  Reference File - contains relatively constant information used in processing  Transaction File - a temporary file containing transactions since the last update  Master File - generally contains account data  Archive File - contains past transactions for reference purposes

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9

Accounting Records in a Computer-Based System

Figure 2-11

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10

Entity Relationship Diagram (ERD)  A documentation technique to represent the relationship between entities in a system.

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Cardinalities  Represent the numerical mapping between entities:  one-to-one  one-to-many  many-to-many

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Cardinalities Entity Salesperson

Customer

Vendor

Relationship

1

1

M

Assigned

Places

Supply

Entity Car Type

1

M

M

Order

Inventory

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13

Data Flow Diagrams (DFD)  use symbols to represent the processes, data sources, data flows, and entities in a system

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Data Flow Diagram Symbols Entity Name

Data Store Name

N Process Description

Direction of data flow Figure 2-12

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15

System Flowcharts  illustrate the relationship among processes and the documents that flow between them

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Symbol Set for Representing Manual Procedures Terminal showing source or destination of documents and reports Source document or report

Calculated batch total On-page connector

Manual operation Off-page connector File for storing source documents and reports

Description of process or comments

Accounting records (journals, registers, logs, ledgers)

Document flowline Figure 2-17

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Flowchart Showing Stated Fact I Translated into Visual Symbols Sales Department

Credit Department

Warehouse

Shipping Department

Customer Customer Order Prepare Sales Orders

Sales OrderSales #1 Order #1 Sales Order #1 Sales Order #1 Figure 2-18

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Flowchart Showing All Stated Facts Translated into Visual Symbols

Figure 2-20

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System Flowcharts…  are used to represent the relationship between the key elements--input sources, programs, and output products--of computer systems

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Symbol Set for Representing Computer Processes Hard copy

Computer process

Direct access storage device

Magnetic tape

Terminal input/ output device

Process flow Real-time (online) connection Video display device Figure 2-21

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Flowchart Showing Translation of Facts 1, 2, and 3 into Visual Symbols

Figure 2-22

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Flowchart Showing All Facts Translated into Visual Symbols

Figure 2-23

©2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

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Computer-Based Accounting Systems  Two broad classes of systems:  batch systems  real-time systems

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Batch Processing  A batch is a group of similar transactions that are accumulated over time and then processed together.

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Real-Time System  process transactions individually at the moment the economic event occurs

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©2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

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