Accounting Essay 2 pages must answer all questions
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romney_ais14_stppt_02.pptxAccounting Information Systems
Fourteenth Edition
Chapter 2
Overview of Transaction Processing and Enterprise Resource Planning Systems
Copyright © 2018 Pearson Education, Inc. All Rights Reserved
Copyright © 2018 Pearson Education, Inc.
Chapter 2: Overview of Transaction Processing and Enterprise Resource Planning Systems
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Learning Objectives
Describe the data processing cycle used to process transactions, including how data is input, stored, and processed and how information is outputted.
Discuss how organizations use enterprise resource planning (ERP) systems to process transactions and provide information.
Copyright © 2018 Pearson Education, Inc.
Chapter 2: Overview of Transaction Processing and Enterprise Resource Planning Systems
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Data Processing Cycle
Copyright © 2018 Pearson Education, Inc.
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Copyright © 2018 Pearson Education, Inc.
Chapter 2: Overview of Transaction Processing and Enterprise Resource Planning Systems
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Data Input
Steps in Processing Input are:
Capture transaction data triggered by a business activity (event).
Make sure captured data are accurate and complete.
Ensure company policies are followed (e.g., approval of transaction).
Copyright © 2018 Pearson Education, Inc.
Chapter 2: Overview of Transaction Processing and Enterprise Resource Planning Systems
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Data Capture
Information collected for an activity includes:
Activity of interest (e.g., sale)
Resources affected (e.g., inventory and cash)
People who participated in the activity (e.g., customer and employee)
Information comes from source documents.
Copyright © 2018 Pearson Education, Inc.
Chapter 2: Overview of Transaction Processing and Enterprise Resource Planning Systems
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Source Documents
Captures data at the source when the transaction takes place
Paper source documents
Turnaround documents
Source data automation (captured data from machines, e.g., Point of Sale scanners at grocery store)
Copyright © 2018 Pearson Education, Inc.
Chapter 2: Overview of Transaction Processing and Enterprise Resource Planning Systems
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Data Storage
Important to understand how data is organized
Chart of accounts
Coding schemas that are well thought out to anticipate management needs are most efficient and effective
Transaction journals (e.g., Sales)
Subsidiary ledgers (e.g., Accounts receivable)
General ledger
Note: With the above, one can trace the path of the transaction (audit trail)
Copyright © 2018 Pearson Education, Inc.
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Coding Techniques
Sequence codes—items numbered consecutively to account for all items (i.e., prenumbered forms)
Block code—blocks of numbers reserved for specific categories of data (i.e., product numbers that start with a 2 are refrigerators)
Group codes—two or more subgroups of digits used to code items (i.e., car vin #’s)
Mnemonic codes—letters and numbers interspersed to identify an item (i.e. Dry300W05 is low end (300), white (W) dryer (DRY) made by Sears (05))
Copyright © 2018 Pearson Education, Inc.
Chapter 2: Overview of Transaction Processing and Enterprise Resource Planning Systems
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Audit trail for Invoice #156 for $1,876.50 sold to KDR Builders
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Computer-Based Storage
Data is stored in master files or transaction files.
Copyright © 2018 Pearson Education, Inc.
Chapter 2: Overview of Transaction Processing and Enterprise Resource Planning Systems
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Data Processing
Four types of processing (CRUD):
Creating new records (e.g., adding a customer)
Reading existing data
Updating previous record or data
Deleting data
Data processing can be batch processed (e.g., post records at the end of the business day) or in real-time (process as it occurs).
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Chapter 2: Overview of Transaction Processing and Enterprise Resource Planning Systems
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Information Output
The data stored in the database files can be viewed
Online (soft copy)
Printed out (hard copy)
Document (e.g., sales invoice)
Report (e.g., monthly sales report)
Query (question for specific information in a database, e.g., Which division had the most sales for the month?)
Copyright © 2018 Pearson Education, Inc.
Chapter 2: Overview of Transaction Processing and Enterprise Resource Planning Systems
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Enterprise Resource Planning (ERP) Systems
Integrates activities from the entire organization
Revenue Cycle
Expenditure Cycle
Production Cycle
H/R Payroll Cycle
General Ledger and Reporting System
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Advantages of ERP System
Integrated enterprise-wide single view of the organization’s data which streamlines the flow of information
Data captured once (i.e., no longer need sales to enter data about a customer and then accounting to enter same customer data for invoicing)
Greater visibility and monitoring capabilities for management
Improve access of control of the data through security settings
Standardization of procedures and reports
Improves customer service
Increases productivity through automation
Copyright © 2018 Pearson Education, Inc.
Chapter 2: Overview of Transaction Processing and Enterprise Resource Planning Systems
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Disadvantages of ERP System
Costly
Significant amount of time to implement
Customizing or standardizing a business process
Complexity
User resistance (learning new things is sometimes hard for employees)
Copyright © 2018 Pearson Education, Inc.
Chapter 2: Overview of Transaction Processing and Enterprise Resource Planning Systems
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Key Terms
Data processing cycle
Source documents
Turnaround documents
Source data automation
General ledger
Subsidiary ledger
Control account
Coding
Sequence code
Block code
Group code
Mnemonic code
Chart of accounts
Specialized journal
Audit trail
Entity
Attributes
Field
Record
Data value
File
Master file
Transaction file
Database
Batch processing
Online, real-time processing
Document
Report
Query
Enterprise resource planning (ERP) system
Copyright © 2018 Pearson Education, Inc.
Chapter 2: Overview of Transaction Processing and Enterprise Resource Planning Systems
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Copyright © 2018 Pearson Education, Inc.
Chapter 2: Overview of Transaction Processing and Enterprise Resource Planning Systems
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