7-1

Accounting Information Systems

Chapter 7
PowerPoint Authors:
Susan Coomer Galbreath, Ph.D., CPA
Charles W. Caldwell, D.B.A., CMA
Jon A. Booker, Ph.D., CPA, CIA
Cynthia J. Rooney, Ph.D., CPA

Copyright 2013 by The McGraw-Hill Companies, Inc. All rights reserved.

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Fundamental System Principles

Accounting
information
systems collect
and process data
from transactions
and events,
organize them in
useful reports,
and communicate
results to
decisions makers.

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Components of Accounting Systems

Increasingly, source documents are

electronic files creating a paperless
system.

Keyboards
Scanners
Modems
Bar-Code Reader

Hardware
Software
Professional Judgment

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Components of Accounting Systems

Printer
Monitor
Projectors
Web communications

CD/DVD
Hard Drive
Tape
Paper Document

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Special Journals in Accounting

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C3

Subsidiary Ledgers
Characteristic

Controlling
Account

Subsidiary Ledger

Amounts due
from customers

Accounts
Receivable

Accounts Receivable
Ledger

Amounts owed
to creditors

Accounts
Payable

Accounts Payable
Ledger

Subsidiary ledgers are a listing of individual

accounts with common characteristics.

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Proving the Ledgers

A schedule of
accounts receivable
lists each customer
and the balance
owed.

The balance of the Accounts Receivable controlling

account in the general ledger should equal the accounts
in the accounts receivable subsidiary ledger.

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Sales Taxes

Governmental agencies often

require sellers to collect sales
taxes from customers and to
periodically send these taxes
to the appropriate agency.

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P1

Cash Receipts Types

1. Cash from credit
customers
2. Cash from cash
sales
3. Cash from other
sources

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Footing, Crossfooting, and Posting

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P1

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P2

Proving the Ledger

A schedule of
accounts payable
lists each supplier
and the balance
owed to them.

The balance of the Accounts Payable controlling

account in the general ledger should equal the
accounts in the accounts payable subsidiary ledger.

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P1

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General Journal Transactions

Adjusting
Entries
Closing
Entries
Purchase
Returns &
Allowances
Sales
Returns &
Allowances

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Computer Networks in Accounting

Server

Work Stations

Computer networks are links among computers

giving different users access to common
databases and programs.

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Enterprise Resource
Planning Software (ERP)
Programs that manage and integrate a
companys vital operations.

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Cloud Computing
Cloud computing is the delivery of computing as
a service rather than a product.

Laptop

Cell Phone

Cloud
Computing

Computer

Tablet

Cloud computing uses applications via the Web instead

of installing them on one's own computer.

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Global View
Systems Principles and Components
Both U.S. GAAP and IFRS aim for high-quality financial reporting.
System principles and components are fundamentally similar
across the globe. However, culture and other realities often mean
different emphases on the mix of system controls.
Special Journals
Accounting systems for recording sales, purchases, and cash
receipts and disbursements are similar worldwide. Systems that
employ special journals are applied worldwide. Further, the basic
structure of special journals as explained in this chapter is one
means to company efficiency.

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A1

Segment Return on Assets

Segment return
on assets

Segment operating income

Segment average assets

Callaway Golf Company reports that it operates in

two business segments: (1) golf clubs and (2) golf
balls. The golf club segment shows a higher return
on assets.

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End of Chapter 7