Accounting test 2

Réussis tes devoirs et examens dès maintenant avec Quizwiz!

Special journals include entries

for all but a few types of transactions and adjusting journal entries, such as for depreciation.

an AIS will carry these balance sheet and accoutns amounts

forward to the next accounting cycle

bankruptcy results

from inadequate cash flow, not from insufficient income

Accounting information systems depend

on codes to record, classify store, and retrieve financial data.

The sales invoice duplicates much

of the information on the original purchase order

Companies search globally to achieve efficiencies-called

"Business without boundaries"

the lead digit, or two lead digit in the sequence code acts

as the block designate, and subsequent digit are identifiers

An AIS might issue some reports only when a particular event occurs

An AIS might issue an inventory reorder report only when the inventory for a certain product drops below a specified level

Processing sales transactions creates several outputs

An AIS uses some of these outputs to produce external accounting reports ( such as financial statements) as well as internal reports ( such as management reports)

numeric code or alphanumeric codes

Codes that use numbers only) Codes that use numbers and letters Example: a manual journal entry might include a debit to the direct material inventory account

group code

Combining two or more sub codes , which is often used as product codes in sale catalogs

Flow of accouting data

First they dicatae the kinds of data to be collected and help ensure consistency and accuracy in recording data Second, they encourage the completeness of accounting data because these source documents clearly identify the information required Third, they serve as distributors of information for individuals or departments Finally, source documents help to establish the authenticity of accounting data

AISs typically use several types of codes

Mnemonic codes Sequence codes Block codes Group code

AIS report should be consistent

Over time Across departmental or divisional levels With general accounting practice

Among the outputs of an AIS are

Report to management Reports to investors and creditors Files that retain transaction data Files that retain current data about accounts( inventory records)

reports should be

consistent across department levels so that supervisors may compare departmental performance

Good output reports share similar characteristics regardless of their type, such as

Useful Convenient format Easy to identify Consistent

The general ledger includes

a separate account (often called a T account because of its shape) for each type of monetary item in an organization

Many source documents

are actually database or internet-based forms that are used to input data electronically

Fundamental elements of accounting

are embedded in automated accounting information systems and they are basis for a company's annual financial statements.

Two such business processes

are sales and purchasing

Block code

are sequential codes in which specific blocks of numbers are reserved for particular uses, create a chart of accounts

Financial statements

are the primary output of a financial accounting system

The primary concerns in the data collection process are

accuracy, timeliness, and cost-effectiveness

Reports such as lists of current employee, customers, and vendors should

also indicate a specific date

Once the debit and credit amounts in this adjusted trial balance are equal

an AIS is ready to produce financial statements.

Whole journal entries record all aspects for business transactions

an AIS separately posts the monetary amounts in each account to the various accounts in the general ledger.

After debit and credit dollar amounts in this trial balance are equal

an accountant wire cord any necessary adjusting journal entries,

These financial statements include

an income statement, balance sheet, statement of owner's equity and cash flow statement

To process sales in a timely manner

an organization must be able to track all revenues that customers owe the firm

at the end of the process er issue

annual financial reports the temporary accounts in preparation for a new cycle.

the most important of these output

are the reports to management because these report aid decision-making activities

These reports might be

be hard-copy (paper) reports, soft-copy (screen) reports, e-copy (CD and other electronic media) reports, or audio outputs

Alphanumeric codes are important in computerized systems

because they help ensure uniformity and consistency

The sales process

begins with a customer order for goods and services and ends with the collection of cash from the customer

Most of the accounting data collected

by an organization ultimately appear on some type of internal and/or external report

Accounting personal

can create a transaction from a source document, or a customer may order products online

Special journal

capture a specific type of transaction. They usually reserved for transactions occurring frequently within an organization.

The computerized system must

close temporary accounts, such as revenue and expense accounts, so that a new cycle can begin,

The nature and types of business processes vary

depending on the information needs of an organization .

entries are made

directly into database tables

An AIS records

each transaction or business event affecting an organization's financial conditioning journals or ledgers

In a paper-based environment

employees typically prepare several copies of a purchase order for internal use ( these many be hard copies or computer images)

In an automated system

entries into the accounting system may be entirely electronic, such as scanning a barcode

report formats should be consistent with

general accounting practice so that managers and investors can understand and use these reports.

Mnemonic code

help the user remember what they represent The product codes S, M,L are examples of the code

These software packages

help various schools and colleges within a university manage course enrollment, communications and invoice an payment processing and perhaps most importantly help them stay connected with graduates who will potentially become donors

Adjusting entries

include journal entries for depreciation and other unrecorded expenses, prepaid expenses, unearned revenues and unrecorded revenue.

Fundamentals elements

include journals,ledgers, accounts, trial balances and financial statements.

Processing revenue

includes filling customer orders, and this requires an interface with the inventory control function

The journal

is a chronological record of business events by account. Special or general journal

A business process

is a collection of activities and work flows in an organization that creates value.

a general ledger

is a collection of detailed monetary information about an organization's various assets, liabilities, owners' equity, revenues, and expenses.

One output of the sales process

is a customer billing statement -summarized outstanding sales invoice for a particular customer and shows the amount currently owed

The trial balance

is a listing of all accounts and their debit and credit balances.

Maintaining customer records

is an important function of the AIS for the revenue process validating a customer's bill-paying ability and payment history, assigning credit limits and rating to customers, and tracking all customers' outstanding invoices

Predictive analytics

is increasingly important information that managers need to make these decisions The AIS must support this need by analyzing sales order, sales terms, payment histoires and other data

Sequence code

is simply a sequential set of numbers used to identify customer account, employee payroll checks, customer sales invoices, and so forth

A primary objective in processing revenues

is to achieve timely and efficient cash collection

Second important factors to consider when designing an accounting code

it must be consistent Using Social Security numbers as employee identifiers is a good example of this design consideration

First important factors to consider when designing an accounting code

it must serve some useful purpose If a product code in a manufacturing firm is part of a responsibility accounting system, at least one portion of the code in a manufacturing firm is part of a responsibility accounting system, at least one portion of the cde must contain a production department code

Once an AIS records a journal entry

it next posts the entry in the general ledger

This is rarely an actual paper journal anymore

it's more likely an electronic entry in an accounting information system.

Third important factors to consider when designing an accounting code

managers must plan for future expansion ( the creation of additional accounts).

computerized systems use

numeric code or alphanumeric codes to record accounting transactions.

the purchasing department keeps

one copy to document the order and to serve as a reference for future inquiries The accounting and receiving department each would also receive a copy for their records

Consistency

over time allows managers to compare information from different time periods

Information processing requires

recording, maintain, grouping and reporting business and economic activities that make up a business process

Revenues

result from an organization's sale of goods or services donations or gifts, as in the case of charitable organizations

Common journals

sales journals, purchase journals, cash receipts journals, and cash disbursements journals

An AIS typically creates a

sales order at the time a customer contracts for goods or services

Purchase orders are normally

sequentially numbered for easy reference at a later date

Summary reports

should contain financial totals, comparative reports should lost related numbers ( budget versus actual figures) in adjacent columns, and descriptive reports ( marketing reports) should represent results systematically most convenient is graphical, such as a pie chart. Other graphical format include bar charts and trend lines

Income statements and similar reports should

show a span of dates for the reporting period ( for the month ended January 31, 2016)

Journal entries

show all aspects of a particular transaction

Balance sheets and similar reports should

show the date as of a specific point in time

Each entry

shows debit and credit amounts, the transactions date, the affected accounts, and a brief description of the events

manual system to use

simple alphabetic descriptions when preparing journal entries

customer relationship management (CRM)

software to gather, maintain and use customer data to provide better customers services and enhance customer loyalty.

In a computerized system

special journals may take the form of special models with their own files

examine some business process management solution

that are available to improve business processes regardless of their location

Business processes

that are commonly outsourced or offshored,

If a company finds that it has charged a customer too little for goods sold

the company would issue a debit memorandum signifies a debit to the customer's account receivable with the company to reflect the amount not charged originally

If a manager queries a database system,

the monitor shows the requested data and the system produces a hard-copy report upon demand

A company's chart of accounts provides

the organizational structure for the general ledger.

The sales invoice reflects

the product or products purchased, the prices, and the terms of payment

After correcting the error

the purchase order would require a new authorization signature

balance sheet and accounts show financial performance at a specific point in time,

they are permanent and need not be closed.

Accounting personal records

transaction in a journal

Where do the sale invoice goes

two or more copies are bill for the customer shipping department-keeps a copy to record that it filled the order accounting department-for processing accounts receivable sales department - for future reference, the inventory department receives a copy to update its records related to the specific inventory items sold

Business are

under tremendous pressure to cut costs, reduce capital expenditures and become as efficient as possible at their core competencies.

Accouting data

useful for such purpose as establishing an audit trail, testing for authorization of cash disbursement checks or inventory disbursement, and establishing accountability for the collection or distribution of money

Why must computerized system close temporary accountts

users are interested in income information for a specific period of time.

An accounts receivable clerk

uses this sales order to prepare a sales invoice or the customer might generate one herself one herself using the web page of an online retailer

Companies can set a special journal for

virtually any type of transaction.

The accounting cycle does not end

when an AIS generates financial statements

Data flow diagram of the sales process

which identifies the data inputs and information outputs of the process

exception report,

which is a list exceptional conditions include a table that identifies the error or errors and could suggest a possible solution to fix the error

The design of an effective AIS usually begins

with the outputs (reports) that users will expect from the system

An accounting clerk

would likely record a credit sale in an account receivable module


Ensembles d'études connexes

New Mexico Insurance license notes

View Set

Chapter 11: Early Societies in West Africa

View Set

303 Hinkle PrepU Chapter 65: Assessment of Neurologic Function

View Set

WH I Jensen Test #3 (Comprehensive)

View Set