Ch 2 Accounting Information System Flashcards
accounting information system
collects and processes transaction data and communicates financial information to decision makers
general ledger accounting systems
software programs that integrate the various accounting functions related to sales, purchases, receivables, payables, cash receipts and disbursements, and payroll
entry-level programs
companies with revenue of <$5 million and up to 20 employees
enterprise resource planning (ERP) systems
typically used by manufacturing companies with more than 500 employees and $500 million sales
manual accounting systems
someone performs each of the steps in the accounting cycle by hand
robotic process automation (RPA) systems
designed to be user-friendly and help companies create efficiencies in their business processes
debit
left
credit
right
double-entry accounting
a company records the dual (two-sided) effect of each transaction in appropriate accounts
accounting cycle
the procedures that companies use to record transactions and prepare financial statements
transactions
a business’s economic events recorded by accountants
external transactions
involves economic events between the company and some outside enterprise
internal transactions
economic events that occur entirely within one company
journal
the book of original entry
general journal
the most basic form of a journal
journalizing
entering transaction data in the journal