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Accounting System (Compatibility Mode) PDF

Computerized accounting systems use software programs to generate financial statements from transaction data more efficiently than manual systems. They allow data to be entered only once, eliminate many errors, and provide more timely information. Special journals like sales, purchases, and cash receipts journals record similar transactions in one place and reduce the number of entries in the general journal. Subsidiary ledgers track individual account balances to support the control accounts in the general ledger.

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147 views

Accounting System (Compatibility Mode) PDF

Computerized accounting systems use software programs to generate financial statements from transaction data more efficiently than manual systems. They allow data to be entered only once, eliminate many errors, and provide more timely information. Special journals like sales, purchases, and cash receipts journals record similar transactions in one place and reduce the number of entries in the general journal. Subsidiary ledgers track individual account balances to support the control accounts in the general ledger.

Uploaded by

Aftab Alam
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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COMPUTERIZED

ACCOUNTING
SYSTEMS

Basic Concepts
p
of Accounting Subsidiary Special
Information Ledgers Journals
Systems

Computerized Example Sales journal


accounting Advantages Cash receipts
systems journal
Manual Purchases
accounting journal
systems
Cash payments
journal
Effects of special
journals on
general journal
The accounting information system (AIS) collects
n pr
and r n
processes transaction n data and
n communicates
mmun
financial information to decision makers.
Includes:
All steps in the accounting cycle.
Documents that p
provide evidence of transactions.
Manual or computerized accounting system.

Cost Effectiveness - Benefits


must outweigh the costs.

Illustration 7-1
Principles of an Useful
efficient and Output
effective AIS.

Flexibility - The system should


be sufficiently flexible to meet
the resulting changes in the
demands made upon it.
Computerized Accounting Systems
Software programs (functions include sales,
sales
purchases, receivables, payables, cash receipts
and disbursements, and payroll).
Generate financial statements.
Advantages:
Typically enter data only once.
once
Many human errors are eliminated.
More timely information.

Computerized Accounting Systems


Choosing a software package
Entry-Level Software
Common features and benefits:
Easy data access and report preparation

Audit trail

Enterprise Resource Planning Systems


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.

Used to keep track of individual balances.


Two common subsidiary
b d ledgers
l d are:
1. Accounts receivable (customers)

2. Accounts payable (creditors)

Each general ledger control account balance must


equal the composite balance of the individual accounts
in the related subsidiary ledger.
Relationship of general ledger and subsidiary ledgers
Illustration 7-3

Advantages of Subsidiary Ledgers


1.
1 Show
Sh in i a single
i l account transactions
i affecting
ff i
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.


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.

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.
Illustration 7-7

POSTING THE SALES JOURNAL

Companies make daily postings


from the sales journal to the
individual accounts receivable
in the subsidiary ledger.

Illustration 7-7

POSTING THE SALES JOURNAL

Posting to the general ledger is


done monthly.
Advantages of Sales Journal
One-line
O li entry for
f each
h sales
l transaction
i saves
time.

Only totals, rather than individual entries, are


posted to the general ledger.

A division of labor results.


results

Cash Receipts Journal Illustration 7-9

In the cash receipts journal, companies record all receipts of cash.


The posting of the cash receipts journal is similar to the posting of
the sale journal. See complete Illustration 7-9 in the text.
Illustration 7-13

Purchases Journal

Daily postings are made from the


purchases journal to the accounts
payable subsidiary ledger.

Illustration 7-13

Purchases Journal

At the end of the accounting


period, the company posts totals to
the general ledger.
Cash Payments Journal Illustration 7-16

In a cash payments (cash disbursements) journal, companies


record all disbursements of cash.
The procedures for posting the cash payments journal are similar to
those for other journals.

Effects of Special Journals on the General Journal

Special journals substantially reduce the


number of entries that companies make in the
general journal.

Only transactions that cannot be entered in a


special journal are recorded in the general
j
journal.
l

Also, correcting, adjusting, and closing entries


are made in the general journal.

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