University of 6th of October, Egypt Prepared by Dr.Hassan Sweillam University of 6th of October, Egypt

5 Accounting Information Systems Learning Objectives After studying this chapter, you should be able to: [1] Identify the basic concepts of an accounting information system. [2] Describe the nature and purpose Computerized Accounting Systems [3] Manual Accounting Systems [4] Financial Accounting as Information System

Basic Concepts of AIS Accounting information system (AIS) collects and processes transaction data and communicates financial information to decision makers. Includes: All steps in the accounting cycle. Documents that provide evidence of transactions. Manual or computerized accounting system. LO 1 Identify the basic concepts of an accounting information system.

Cost Effectiveness - Benefits must outweigh the costs. Basic Concepts of AIS Cost Effectiveness - Benefits must outweigh the costs. Illustration 7-1 Principles of an efficient and effective AIS. Useful Output Flexibility - The system should be sufficiently flexible to meet the resulting changes in the demands made upon it. LO 1 Identify the basic concepts of an accounting information system.

Basic Concepts of AIS Computerized Accounting Systems Software programs (functions include sales, purchases, receivables, payables, cash receipts and disbursements, and payroll). Generate financial statements. Advantages: Typically enter data only once. Many human errors are eliminated. More timely information. LO 1 Identify the basic concepts of an accounting information system.

Basic Concepts of AIS Computerized Accounting Systems Choosing a software package. Entry-Level Software. Easy data access and report preparation Audit trail Internal control Customization Network Compatibility Enterprise Resource Planning Systems. LO 1 Identify the basic concepts of an accounting information system.

Basic Concepts of AIS Manual Accounting Systems Perform each step in the accounting cycle by hand. Satisfactory with a low volume of transactions. Must understand manual accounting systems to understand computerized accounting systems. LO 1 Identify the basic concepts of an accounting information system.

Input Output Financial Accounting as Information System Processing Set of reports prepared at the end of an accounting period. This set of reports is called the Financial Statement. Input Business transactions Example: Buying goods Paying salaries Providing services Buying land Borrowing cash Processing Recording Example: Entering business transactions into a set of accounting records The accounting period is either a month, quarter or a year.

Review Questions True or False Questions 1-Accounting information system (AIS) collects and processes transaction data and communicates financial information to decision makers. Answer: True 2-Manual Accounting Systems Perform each step in the accounting cycle by software program. Answer: False 3- Financial Accounting as Information System includes input and output.

Review Questions 12. Quiz Multiple Choice Questions 1- ___________________Software programs (functions include sales, purchases, receivables, payables, cash receipts and disbursements, and payroll). Computerized Accounting Systems. Manual Accounting Systems. Software Accounting Systems. None of these Answer: ____

12. Quiz Review Questions Brief explain Questions 1- Briefly explain the Computerized Accounting Systems? 2- Briefly explain the Steps in Financial Accounting as Information System ? Brief explain Questions