Chapter 2 (Introduction to Transaction Processing) Flashcards
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
Financial transactions are captured in cycles known as transaction cycles which are addressed in AIS which are:
- the expenditure cycle
- the conversion cycle
- the revenue cycle
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
where we plan, schedule and control the physical product through the manufacturing process and account for the cost of these events.
conversion cycle
processes our cash and credit sales as well as the receipt of cash
revenue cycle
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
What are the records in a manual system?
- documentation
- journal
- ledger
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)
What are the 2 types of journals?
- special journals
- general journals
What are the 2 types of ledgers?
- general ledger
- subsidiary ledger
your first step into the general model for AIS
data collection
records of company data sent to a third party and then returned to the system as input
turnaround document
specific classes of transactions that occur in high frequency
examples:
- sales
- payroll
- cash receipt
- cash disbursement
- purchases
special journal
non-recurring, infrequent, and dissimilar transactions
examples:
- depreciation
- adjusting entries
- reclassifications
general journal
shows activity for each account listed on the chart of accounts
general ledger