Chapter 2 (Introduction to Transaction Processing) Flashcards Preview

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Flashcards in Chapter 2 (Introduction to Transaction Processing) Deck (39)
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1

an economic event that affects the assets and equities of the firm, is reflected in its accounts, and is measured in monetary terms.

financial transaction

2

Financial transactions are captured in cycles known as transaction cycles which are addressed in AIS which are:

1. the expenditure cycle
2. the conversion cycle
3. the revenue cycle

3

involves the acquisition of materials, property, & labor in exchange for cash. It generally has subsystems such as Purchasing / Accounts Payable , Cash Disbursement, Payroll, and Fixed Assets.

expenditure cycle

4

where we plan, schedule and control the physical product through the manufacturing process and account for the cost of these events.

conversion cycle

5

processes our cash and credit sales as well as the receipt of cash

revenue cycle

6

So we get a SALES ORDER from the CUSTOMER’S ORDER, we then post it into the ACCOUNTS RECEIVABLE SUBSIDIARY LEDGER which the reconcile subsidiary ledger is periodically sent to the GENERAL LEDGER. Also, from the SALES ORDER a journal entry is made to the SALES JOURNAL which is then posted to the GENERAL LEDGER.

sales order; customer's order; accounts receivable subsidiary ledger; general ledger; sales order; sales journal; general ledger

7

What are the records in a manual system?

- documentation
- journal
- ledger

8

What are the 3 types of documents?

- source documents (sale to a customer = sale order)
- product documents (documents that result from transaction processing; invoice to customer)
- turnaround documents (product documents of one system that become source documents in another system; documents that are the primary source for all journals)

9

What are the 2 types of journals?

- special journals
- general journals

10

What are the 2 types of ledgers?

- general ledger
- subsidiary ledger

11

your first step into the general model for AIS

data collection

12

records of company data sent to a third party and then returned to the system as input

turnaround document

13

specific classes of transactions that occur in high frequency

examples:
- sales
- payroll
- cash receipt
- cash disbursement
- purchases

special journal

14

non-recurring, infrequent, and dissimilar transactions

examples:
- depreciation
- adjusting entries
- reclassifications

general journal

15

shows activity for each account listed on the chart of accounts

general ledger

16

shows activity by detail for each account type
- A/R
- A/P
- fixed assets
- inventory
- payroll

subsidiary ledger

17

What are the digital accounting records?

- master file
- transaction file
- reference file
- archive files

18

contains account data

examples:
- general ledger
- subsidiary ledger
- updated transactions

master file

19

temporary file used to update the master file

examples:
- sales order
- cash receipts

transaction file

20

stores data that is used as a standard for processing transactions

example:
- tax table

reference file

21

records for past transactions that are retained for future reference and audit

examples:
- journals
- list of prior employees
- prior period ledgers

archive files

22

- allows tracking back to source documents
- relied upon by external auditors when doing their audit
- ensures validity, accuracy, completeness
- less observable in computer based systems

audit trail

23

excessive storage costs of paper documents and/or magnetic form

data storage

24

changes or additions must be performed multiple times

data updating

25

potential problem of failing to update all affected files

currency of information

26

user's inability to obtain additional information as needs change

task data dependency

27

separate files are difficult to integrate across multiple users

data integration

28

each data element is stored only one time thus eliminating the data redundancy and reducing the collection and storage issues

data redundancy eliminated

29

because each data element exists in only one place, you only need to update the data one time and it is current

single update

30

an change is available for all to see, thus the database is always the most current

current values