1. 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 Winston Kwok, Ph.D., CA Copyright © 2015 by McGraw-Hill Education (Asia). All rights reserved Chapter 7 A CCOUNTING I NFORMATION S YSTEMS

2. 7 - 2 F UNDAMENTAL S YSTEM P RINCIPLES C1 Accounting information systems collect and process data from transactions and events, organize them in useful reports, and communicate results to decisions makers.

3. 7 - 3 C OMPONENTS OF A CCOUNTING S YSTEMS C1 Keyboards Scanners Modems Bar-Code Reader Keyboards Scanners Modems Bar-Code Reader Hardware Software Professional Judgment Hardware Software Professional Judgment Increasingly, source documents are electronic files creating a “paperless” system.

4. 7 - 4 C OMPONENTS OF A CCOUNTING S YSTEMS C1 CD/DVD Hard Drive Tape Paper Document CD/DVD Hard Drive Tape Paper Document Printer Monitor Projectors Web communications Printer Monitor Projectors Web communications

5. 7 - 5 S PECIAL J OURNALS IN A CCOUNTING C2

6. 7 - 6 S UBSIDIARY L EDGERS Subsidiary ledgers are a listing of individual accounts with common characteristics. Characteristic Controlling Account Subsidiary Ledger Amounts due from customers Accounts Receivable Accounts Receivable Ledger Amounts owed to creditors Accounts Payable Accounts Payable Ledger C3

7. 7 - 7 A CCOUNTS R ECEIVABLE L EDGER equal to After all items are posted, the balance in the accounts receivable controlling account is equal to the sum of the balances in the accounts receivable subsidiary ledger. C3

8. 7 - 8 S ALES J OURNAL P1

9. 7 - 9 P ROVING THE L EDGERS P2 The balance of the Accounts Receivable controlling account in the general ledger should equal the accounts in the accounts receivable subsidiary ledger. A schedule of accounts receivable lists each customer and the balance owed.

10. 7 - 10 S ALES T AXES P1 Governmental agencies often require sellers to collect sales taxes from customers and to periodically send these taxes to the appropriate agency.

11. 7 - 11 S ALES R ETURNS AND A LLOWANCES If a company has few sales returns, they may be recorded in the General Journal. A company with many sales returns may use a Sales Returns and Allowances Journal. P1

12. 7 - 12 P1 Cash Receipts Types 1.Cash from credit customers 2.Cash from cash sales 3.Cash from other sources

13. 7 - 13 F OOTING, C ROSSFOOTING, AND P OSTING P1

14. 7 - 14 P1

15. 7 - 15 P ROVING THE L EDGER P2 The balance of the Accounts Payable controlling account in the general ledger should equal the accounts in the accounts payable subsidiary ledger. A schedule of accounts payable lists each supplier and the balance owed to them.

16. 7 - 16 P1

17. 7 - 17 G ENERAL J OURNAL T RANSACTIONS Adjusting Entries Purchase Returns & Allowances ClosingEntriesClosingEntries P1 Sales Returns & Allowances

18. 7 - 18 C OMPUTER T ECHNOLOGY IN A CCOUNTING Off-the-Shelf Software Familiar accounting programs such as Peachtree ® and QuickBooks ® are designed to be user friendly and menu driven. Integrated Software Actions taken in one part of the system automatically affect related parts. For instance, when a credit sale is entered, several parts of the system are automatically updated.

19. 7 - 19 D ATA P ROCESSING IN A CCOUNTING  Online 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).

20. 7 - 20 C OMPUTER N ETWORKS IN A CCOUNTING Computer networks are links among computers giving different users access to common databases and programs. Server Work Stations

21. 7 - 21 E NTERPRISE R ESOURCE P LANNING S OFTWARE (ERP) Programs that manage and integrate a company’s vital operations.

22. 7 - 22 A good AIS collects financial data for a company’s various segments. S EGMENT R ETURN ON A SSETS A segment is a part of a company that is separately identified by its products, services, or geographic market. A1 Companies Reporting Operations by Segments *Total exceeds 100% because companies can report more than one segment.

23. 7 - 23 S EGMENT R ETURN ON A SSETS Segment return on assets = Segment operating profit or income Segment average assets A1 Nestlé’s best performing segment in terms of return on assets is Zone Asia, Oceania, and Africa. This is especially impressive considering this segment ranks second in terms of the amount of assets.

24. 7 - 24 A PPENDIX 7A: S PECIAL J OURNALS UNDER A P ERIODIC S YSTEM P3

25. 7 - 25 A PPENDIX 7A: S PECIAL J OURNALS UNDER A P ERIODIC S YSTEM P3

26. 7 - 26 END OF CHAPTER 7