Prepared by Paula Funkhouser University of Nevada, Reno Core Concepts of Accounting Information Systems, 13th Edition Mark G Simkin ● Jacob M Rose ● Carolyn S Norman Accounting Information Systems and Business Processes - Part I Chapter 10 Chapter 10: Accounting Information Systems and Business Processes - Part I • Introduction • Business Process Fundamentals • Collecting and Reporting Accounting Information • The Sales Process • The Purchasing Process • Current Trends in Business Processes Copyright © 2015 John Wiley & Sons, Inc All rights reserved Business Process Fundamentals • Overview of the Financial Accounting Cycle – – – – Journals Ledgers Trial Balances Financial Statements Copyright © 2015 John Wiley & Sons, Inc All rights reserved Journals • • Chronological record of business events by account General Journal – Records any type of accounting transaction • Special Journals – Captures specific types of transactions Copyright © 2015 John Wiley & Sons, Inc All rights reserved Types of Special Journals • Sales Journal – Record of credit sales transactions • Purchases Journal – Record of credit purchase transactions • Cash Receipts Journal – Record of transactions involving receipts of cash • Cash Disbursements Journal – Record of transactions involving disbursements of cash Copyright © 2015 John Wiley & Sons, Inc All rights reserved Ledgers • General Ledger – Contains detailed monetary information – Includes the assets, liabilities, owners’ equity, revenues, and expenses of the company • Chart of Accounts – Listing of all accounts used by the company – Provides organizational structure for the general ledger – Utilizes block coding structure Copyright © 2015 John Wiley & Sons, Inc All rights reserved Trial Balances • • Listing of all accounts with the debit and credit balances Timing of Preparation – After all journal entries are posted – Following the posting of adjusting entries – Following the posting of closing entries Copyright © 2015 John Wiley & Sons, Inc All rights reserved Financial Statements • Primary output of financial accounting system • Main Financial Statements – – – – Income Statement Balance Sheet Statement of Owners’ Equity Statement of Cash Flows Copyright © 2015 John Wiley & Sons, Inc All rights reserved Steps in the Accounting Cycle Copyright © 2015 John Wiley & Sons, Inc All rights reserved Coding Systems • Importance of Coding for AISs – Record, classify, store, and retrieve information – Utilize numeric and alphanumeric codes • Design Considerations – Must serve a useful purpose – Must be consistent – Plan for future expansion 10 Copyright © 2015 John Wiley & Sons, Inc All rights reserved Outputs of the Sales Process • Approved Customer Listing Report – Identifies customers approved for sales – Includes customer information such as billing address, credit limits, and billing terms • Sales Analysis Reports – Detailed information captured by AIS – Aid in decision-making process for production planning and marketing efforts 30 Copyright © 2015 John Wiley & Sons, Inc All rights reserved Sales Process Summary 31 Copyright © 2015 John Wiley & Sons, Inc All rights reserved Study Break #3 is (are) a collection of activities or flow of work in an organization that creates value A An economic event B Accounting transactions C A business process D A chart of accounts 32 Copyright © 2015 John Wiley & Sons, Inc All rights reserved Study Break #4 Which of the following is NOT an objective of the sales process? A Controlling inventory B Tracking sales of goods and/or services to customers C Billing for goods and services D Forecasting sales and cash receipts 33 Copyright © 2015 John Wiley & Sons, Inc All rights reserved The Purchasing Process • Process – Begins with request for goods/services – Ends with payment of cash • Primary Objectives of Purchasing Process – Purchase high-quality goods at best price – Pay vendors at the optimal time 34 Copyright © 2015 John Wiley & Sons, Inc All rights reserved Objectives of the Purchasing Process • Tracking purchases of goods and/or services from vendors • Tracking amounts owed • Maintaining vendor records • Controlling inventory • Making timely and accurate vendor payments • Forecasting purchases and cash outflows 35 Copyright © 2015 John Wiley & Sons, Inc All rights reserved Data Flow Diagram of Purchasing Process 36 Copyright © 2015 John Wiley & Sons, Inc All rights reserved Inputs to the Purchasing Process • Purchase Requisition – Identifies item requested – May indicate name of vendor • Purchase Order – Based on Purchase Requisition – Includes vendor information • Vendor Invoice – Includes prices, shipping terms, and discounts 37 Copyright © 2015 John Wiley & Sons, Inc All rights reserved Inputs to the Purchasing Process • Receiving Report – Count and condition of goods received • Bill of Lading – Accompanies the goods sent – Carrier assumes responsibility for the goods • Packing Slip – Specific goods and quantities included in shipment – Included in merchandise package 38 Copyright © 2015 John Wiley & Sons, Inc All rights reserved Sample Packing Slip 39 Copyright © 2015 John Wiley & Sons, Inc All rights reserved Outputs of the Purchasing Process • Financial Statement Information • Vendor Checks – Supported by a voucher – Signed by a person designated by management • Check Register – List of all checks issued for a particular period – By-product of batch processing 40 Copyright © 2015 John Wiley & Sons, Inc All rights reserved Outputs of the Purchasing Process • Discrepancy Reports Notes differences in quantities or amounts Based on reconciliation of purchase order, receiving report, and the purchase invoice • Cash Requirements Forecast Predicts future payments and payment dates Utilizes multiple source documents 41 Copyright © 2015 John Wiley & Sons, Inc All rights reserved Purchasing Process Summary 42 Copyright © 2015 John Wiley & Sons, Inc All rights reserved IT in Sales and Purchasing • Electronic input – Wireless capabilities • Automated data-entry technology – Bar code readers • Inventory Management Systems – RFID tags 43 Copyright © 2015 John Wiley & Sons, Inc All rights reserved Current Trends in Business Processes • Business Processes Outsourcing (BPO) – Business without boundaries – Offshoring • Business Process Management Software (BPM) – Collect corporate knowledge, data, and business rules – Accomplish business processes more efficiently 44 Copyright © 2015 John Wiley & Sons, Inc All rights reserved .. .Chapter 10: Accounting Information Systems and Business Processes - Part I • Introduction • Business Process Fundamentals • Collecting and Reporting Accounting Information • The... Source Documents • Manage flow of accounting data – – – – Dictate type of data collected Encourage completeness of data Distributors of information Establish authenticity of data • Usage today – Extensively... Contains detailed monetary information – Includes the assets, liabilities, owners’ equity, revenues, and expenses of the company • Chart of Accounts – Listing of all accounts used by the company – Provides