Professional Documents
Culture Documents
TRANSACTION
PROCESSING
REPORTING SYSTEMS OVERVIEW
AND
FINANCIAL
disburses
paychecks
to
the
employees.
Conceptually,payroll is a special-case purchases and
cash disbursements system.
d. Fixed asset system. A firms fixed asset system
processes transactions pertaining tothe acquisition,
maintenance, and disposal of its fixed assets.
2. )The Conversion Cycle
The conversion
subsystems:
cycle
is
composed
of
two
major
a. production
system
involves
the
planning,
scheduling,and control of the physical product through
the manufacturing process.
b. cost accounting systemmonitors the flow of cost
information related to production.
3.) The Revenue Cycle
Firms sell their finished goods to customers through the
revenue cycle, which involvesprocessing cash sales, credit
sales, and the receipt of cash following a credit sale.
The primary subsystems of the revenue cycle are
a. Sales order processing. The majority of business sales
are made on credit andinvolve tasks such as preparing
sales orders, granting credit, shipping products
(orrendering of a service) to the customer, billing
customers, and recording the transactionin the
accounts (accounts receivable [AR], inventory,
expenses, and sales).
b. Cash receipts. For credit sales, some period of time
(days or weeks) passes betweenthe point of sale and
the receipt of cash. Cash receipts processing
includescollecting cash, depositing cash in the bank,
and recording these events in the accounts(AR and
cash).
ACCOUNTING RECORDS
Manual Systems
A. Documents
A document provides evidence of an economic event and
may be used to initiate transactionprocessing. Some
documents are a result of transaction processing.
1. Source Documentsare used to capture and formalize
transaction data that the transaction cycleneeds for
processing.
2. Product Documentsare the result of transaction
processingrather than the triggering mechanism for
the process. For example, a payroll check toan
employee is a product document of the payroll system.
3. Turnaround Documentsare product documents of
onesystem that become source documents for another
system.
B. Journals
A journal is a record of a chronological entry. The journal
holds acomplete record of transactions and thus provides a
means for posting to accounts.
There are two primary types of journals:
1. Special Journals. Special journals are used to record
specific classes of transactionsthat occur in high
volume.
a. sales journal
b. cash receipts journal
c. cash disbursements journal
d. purchases journal
e. payroll journal.
Registeris often used to denote certain types of special
journals.
Figure6.13
and
numerical
Figure 6.17FISymbol
Procedures
Set
for
Representing
Manual
Figure 6. 20
To signify the filing system used, the file symbol will usually
contain an N for numeric (invoice number), C for
chronological (date), or A for alphabetical order (customer
name).
Typically, a system flowchart shows only the flow of
documents, not physical assets. Finally, for visual clarity,
system flowcharts show the processing of a single
transaction only. You should keep in mind, however, that
transactions usually pass through manual procedures in
batches (groups).
Batch Processing
Batch processing permits the efficient management of a
large volume of transactions. A batch is a group of similar
transactions that are accumulated over time and then
processed together. Batch processing offers two general
advantages.
Program Flowcharts
The system flowchart shows the relationship between
computer programs, the files they use, and the outputs they
produce. This high level of documentation, however, does not
provide the operational details that are sometimes needed.
For example, an auditor wishing to assess the correctness of
the edit programs logic cannot do so from the system
flowchart. This requires a program flowchart.
Figure 6.23
Figure 6.24
Batch Systems
Real time systems
1. Legacy Systems
they are mainframe-based applications
they tend to be batch oriented
uses flat files for data storage
2. Modern Systems
Tend to be client-server-based and process
transactions in real time but many modern
systems are mainframe-based and use batch
processing
Stores transactions and master files in relational
database tables
Updating Master Files from Transactions
Stages of reconstruction:
1. A special recovery program uses the backup file to
create a pre-update version of the master file.
2. The file update process is repeated using the previous
batch of transactions to restore the master to its
current condition.
Batch Processing using Real-Time Data Collection
Journal Voucher
ACCOUNTING RECORDS
An audit trail facilitates error preventionand correction
when the data files are conveniently and logically organized.
Also, the general ledger and other files that constitute the
audit trail should be detailed and rich enough to:
1. Provide the ability to answer inquiries.
2. Be able to reconstruct files if they are completely or
partially destroyed.
3. Provide historical data required by auditors
4. Fulfill government regulations; and