Accounting Information

1
Chapter 7

• Accounting Information
• Systems

2
Fundamental System Principles
C1
Control Principle Internal controls for
management to monitor the business.
Relevance Principle Provide relevant, timely and
pertinent information.
Flexibility Principle System needs to meet the
changing needs of company.
Compatibility Principle System must be compatible
with aims of the company.
Cost-Benefit Principle Benefits of the system
must outweigh the costs incurred.
3
Components of Accounting Systems
C2
Increasingly, source documents are electronic
files creating a paperless system.
4
Components of Accounting Systems
C2
Source Documents
Input
Keyboards Scanners Modems Bar-Code Reader
5
Components of Accounting Systems
C2
Source Documents
Input
Hardware Software Professional Judgment
Processor
6
Components of Accounting Systems
C2
Source Documents
Input
CD Hard Drive Tape Paper Document
Storage
Processor
7
Special Journals in Accounting
C3
8
Subsidiary Ledgers
C4
Subsidiary ledgers are a listing of individual
accounts with common characteristics.
9
Technology-Based Accounting Systems
C5

• Hardware
• Processing units
• Hard Drives
• RAM
• Modems
• CD-ROM Drives
• Speakers
• Monitors
• Servers
• Printers

• Software
• Programs with a series of commands directing
  operations of computer hardware such as data
  input, storage, processing, or output

10
Computer Technology in Accounting
C5

• Integrated accounting programs automatically
  update related accounts, journals, and ledgers
  for a single transaction.

11
Data Processing in Accounting
C5

• On-line processing enters and processes data
  immediately.
• Batch processing accumulates information for a
  period of time and then processes all the data at
  one time (daily, weekly, or monthly).

12
Computer Networks in Accounting
C5
Server
Work Stations
Computer networks are links among computers
giving different users access to common databases
and programs.
13
Enterprise Resource Planning Software
C5
Enterprise resource planning software, such as
SAP or Oracle, links ordering, inventory,
production, purchasing, planning, tracking and
human resources for many of the worlds largest
companies.
14
Homework

• Read Chapter 7
• Read and answer the Decision Maker and Decision
  Ethics questions
• Read and answer the Quick Checks
• Visit the Publishers website tools for Ch 7
• Key Terms p. 292 (glossary on web)
• Multiple Choice Quiz p. 292-293
• Discussion Questions p. 293
• None