2 Flashcards
is an agreement between two entities to exchange goods or services or any other event that can be measured in economic terms by an organization. It is a business event that has a monetary impact on an entity’s financial statements, and is recorded as an entry in its accounting records.
Transaction
__________ is an information processing system for business transactions involving the collection, modification and retrieval of all transaction data.
Transaction Processing System
3 TYPES OF TRANSACTION CYCLES
EXPENDITURE CYCLE
CONVERSION CYCLE
REVENUE CYCLE
Business activities begin with the acquisition of materials, property, and labor in exchange for cash.
Expenditures Cycle
Transforms (converts) input resources, such as raw materials, labor, and overhead, into finished products or services for sale.
Conversion Cycle
Involves processing cash sales, credit sales, and the receipt of cash following a credit sale.
the Revenue Cycle
These are the original source documents, journal entries, and ledgers that describe the accounting transactions of a business
Accounting Records
A bookkeeping system where records are maintained by hand, without using a computer system.
Manual System
Economic events result in the creation of some documents at the beginning (the source) of the transaction.
source documents
are the result of transaction processing rather than the triggering mechanism for the process.
product documents
are product documents of one system that become source documents for another system.
turnaround document
is a chronological record of financial transactions. The primary sources of data entry into journals are documents.
journals
are used to record specific classes of transactions that occur in high volume. (Examples of special journals are the cash receipts journal, cash disbursements journal, payroll journal, purchases journal, and sales journal).
special journals
Firms use the ________ to record nonrecurring, infrequent, and dissimilar transactions. For example, depreciation and closing entries are typically recorded in the general journal.
general journal
s a book of accounts that reflects the financial effects of the firm’s transactions after they are posted from the various journals and journal vouchers.
ledgers
summarizes the activity for each of the organization’s financial accounts. Also, provides a single value for each control account, such as accounts payable, accounts receivable, and inventory.
general ledgers
is a chart of specific accounts that are not included in the general ledger.
subsidiary ledger
Refers to creating, transferring, managing, and storing financial information in an electronic format.
Digital Accounting Record
______ contains account data. The general ledger and subsidiary ledgers are examples of _______.
master file
______ a temporary file of transaction records used to update data in a master file. It is used to hold data during transaction processing.
transaction file
stores data that are used as standards for processing trans- actions. For example, the payroll program may refer to a tax table to calculate the proper amount of withholding taxes for payroll transactions.
reference file
_____ contains records of past transactions that are retained for future reference and form an important part of the audit trail.
archive file
An _________ is a step-by-step record by which accounting, trade details, or other financial data can be traced to their source.
An ________ could be as simple as a receipt for the purchase of an item. The receipt would have the date of the transaction, the price, the place where it was bought and who was involved in the transaction.
audit trail
DOCUMENTATION TECHNIQUES
A written description of a system can be wordy and difficult to follow.
Five (5) Documentation Techniques:
- Data Flow Diagram (DFD)
- Entity Relationship Diagram (ERD)
- System Flowcharts
- Program Flowcharts
- Record Layout Diagrams
