transaction processing and enterprise resource planning systems ( Topic 2 ) Flashcards
Data Processing Cycle
Every information systems data processing follows this process, process may happen immediately or at a later stage. Despire the diagram storage likely occurs at every stage,
- Data input
- Data processing
- Information Output
- Data Storage
Data Processing Cycle Determines
access to them?
- This often depends on the domain , as the user there will be specific requirements
How should data be organised, updated, stored, accessed and retrieved?
How can scheduled and unanticipated information needs be met?
Data Input—Capture
Data must be collected about three facets of each business activity as it occurs
- Each activity of interest. eg sales , purchase for a manufacturing organisation
- Resource(s) affected by each activity. Eg for sale – inventory is effected, revenue is effected
- People who participate in each activity. Eg sales – know who made the sale
the most frequent revenue cycle transaction is a sale, either for cash or on credit. S&S may find it useful to collect the following data about a sales transaction:
- Date and time the sale occurred
- Employee who made the sale and the checkout clerk who processed the sale
- Checkout register where the sale was processed
- Item(s) sold
Paper-Based Source Documents
Data is collected on source documents ( captures requirements )
source documents - Documents used to capture transaction data at its source – when the transaction takes place- historically used by businesses . Ex- amples include sales orders, purchase orders, and employee time cards.
• Examples
- Sales-order form
- Purchase requisition
• Data from paper-based documents will eventually need to be transferred to the AIS (digitised)
known as digitization – companies operate in different modes entirely digistesed and mixed
Turnaround documents
Turnaround documents - goal is to minimize data entry and therefore errors
Records of company data sent to an ex- ternal party and then returned to the system as input. Turn- around documents are in ma- chine-readable form to facilitate their subsequent processing as input records.
An example is a utility bill.
- Usually paper-based
- Are sent from organisation to customer typically used by utility providers
- Same document is
- Returned by customer to organisation
Source Data Automaton
The collection of transaction data in machine-readable form at the time and place of origin. Exam- ples are point-of-sale terminals and ATMs.
Preferred approach to reduce errors, is to capture Source Data
- In machine-readable form
- At the time of the business activity - e.g. ATMs; point-of-sale (POS)
Data Input—Accuracy and Control
- Data input screens usually list all the data the user needs to enter.
Well-designed source documents can ensure that data captured is
• Accurate - Provide instructions and prompts - Check boxes - Drop-down boxes • Complete - Internal control support - Pre-numbered documents - forms – they can be reconciled - Mandatory fields
this creates consistency and makes the process rodust – in an effort to reduce error and ensure data is complete
Data Storage
Types of AIS storage • Paper-based - Ledgers - Journals • Computer-based – speed , efficnecy
Ledgers
General
• Summary level data for each:
- Asset, liability, equity, revenue, and expense
Subsidiary
• Detailed data for a General Ledger (Control) Account that has individual sub-accounts, using systems with this provides scope as to ‘ where’ the asset has come from
- Accounts Receivable
- Accounts Payable
Cumulative accounting information is stored in general and subsidiary ledgers.
General ledger
contains summary-level data for every asset, liability, equity, revenue, and expense account.
Subsidiary ledger
subsidiary ledger contains detailed data for any general ledger account with many individual subaccounts.
control account
control account - A title given to a general ledger account that summarizes the total amounts recorded in a subsidiary ledger.
For example, the accounts receivable control account in the general ledger represents the total amount owed by all customers. The balances in the accounts receivable subsidiary ledger indicate the amount owed by each specific customer.
the sum of all subsidiary ledger account balances should equal the amount in the corresponding general ledger control account. Any discrepancy between them indicates that a recording error has occurred.
Journals
General
• Infrequent or specialized transactions
Specialised
• Repetitive transactions
- e.g. sales transactions
Coding Techniques
Coding is the systematic assignment of numbers or letters to items to classify and organize them.
This facilitates the data entry process – practicality
- Sequence
- Group
- Mnemonic
- Chart of accounts
Sequence
• Items numbered consecutively Block
• Specific range of numbers are associated with a category
- 10000–199999 = Electric Range
Group
Which are two or more subgroups of digits used to code items, are often used in conjunction with block codes.
• Positioning of digits in code provide meaning
Mnemonic
- Letters and numbers
- Easy to memorise
- Code derived from description of item
Chart of accounts
• Type of block coding
chart of accounts ( definition) - A listing of all the numbers assigned to bal- ance sheet and income state- ment accounts. The account numbers allow transaction data to be coded, classified, and entered into the proper accounts. They also facilitate financial statement and report preparation
The following guidelines result in a better coding system.
The code should:
- Be consistent with its intended use, which requires that the code designer determine de- sired system outputs prior to selecting the code.
- Allow for growth. For example, don’t use a three-digit employee code for a fast-growing company with 950 employees.
General journal
A general journal is used to record infrequent or nonroutine transactions, such as loan payments and end-of-period adjusting and closing entries.
Specialized journal
A specialized journal records large numbers of repetitive transactions such as sales, cash receipts, and cash disbursements.
Audit trail
A path that allows a transaction to be traced through a data processing sys- tem from point of origin to out- put or backwards from output to point of origin. It is used to check the accuracy and valid- ity of ledger postings and to trace changes in general ledger accounts from their beginning balance to their ending balance
Computer Based Storage
- Entity
- Attributes
- Fields
- Records
- Files
Entity
Entity - The item about which information is stored in a record.
- Person, place, or thing (noun) - employees, product, customers
- Something an organisation wishes to store data about ( of interest)
Attributes
Attributes
- he properties, identifying numbers, and char- acteristics of interest of an entity that is stored in a database
- Facts about the entity – describe the entity
Fields
Fields
- The portion of a data record where the data value for a particular attribute is stored.
- Where attributes are stored
Records
Records
- A set of fields whose data values describe specific at- tributes of an entity, such as all payroll data relating to a single employee.
- Group of related attributes about an entity , unique collection of data that represents the entity
