Chapter 7: Accounting Information Systems and Business Processes - Part I Introduction Business Process Fundamentals Collecting and Reporting Accounting Information The Sales Process The Purchasing Process Current Trends in Business Processes Chapter 7-1 Business Process Fundamentals Overview of the Financial Accounting Cycle  Journals  Ledgers  Trial Balances  Financial Statements Chapter 7-2 Journals Chronological record of business events by account General Journal  Records any type of accounting transaction Special Journals  Captures specific types of transactions Chapter 7-3 Types of Special Journals Sales Journal  Record of credit sales transactions Purchases Journal  Record of credit purchase transactions Cash Receipts Journal  Record of transactions involving receipts of cash Cash Disbursements Journal  Record of transactions involving disbursements of cash Chapter 7-4 Ledgers General Ledger Contains detailed monetary information  Includes the assets, liabilities, owners’ equity, revenues, and expenses of the company  Chart of Accounts Listing of all accounts used by the company  Provides organizational structure for the general ledger  Utilizes block coding structure Chapter  7-5 Trial Balances Listing of all accounts with the debit and credit balances Timing of Preparation After all journal entries are posted  Following the posting of adjusting entries  Following the posting of closing entries  Chapter 7-6 Financial Statements Primary output of financial accounting system Main Financial Statements Income Statement  Balance Sheet  Statement of Owners’ Equity  Statement of Cash Flows  Chapter 7-7 Steps in the Accounting Cycle Chapter 7-8 Coding Systems Importance of Coding for AISs Record, store, classify, and retrieve information  Utilize numeric and alphanumeric codes  Design Considerations Must serve a useful purpose  Must be consistent  Plan for future expansion  Chapter 7-9 Types of Codes Mnemonic Codes  Helps user remember what they represent Sequence Codes  Sequential set of numbers Block Codes   Sequential codes Blocks of numbers reserved for specific Group Codes  Combine two or more subcodes Chapter 7-10 Study Break #4 Which of the following is NOT an objective of the sales process? A Controlling inventory B Tracking sales of goods and/or services to customers C Billing for goods and services D Forecasting sales and cash receipts Chapter 7-35 Study Break #4 Which of the following is NOT an objective of the sales process? A Controlling inventory B Tracking sales of goods and/or services to customers C Billing for goods and services D Forecasting sales and cash receipts Chapter 7-36 The Purchasing Process Process   Begins with request for goods/services Ends with payment of cash Primary Objectives of Purchasing Process   Purchase high-quality goods at best price Pay vendors at the optimal time Chapter 7-37 Objectives of the Purchasing Process Tracking purchases of goods and/or services from vendors Tracking amounts owed Maintaining vendor records Controlling inventory Making timely and accurate vendor payments Forecasting purchases and cash outflows Chapter 7-38 Data Flow Diagram of Purchasing Process Chapter 7-39 Inputs to the Purchasing Process Purchase Requisition Identifies item requested  May indicate name of vendor  Purchase Order Based on Purchase Requisition  Includes vendor information  Vendor Invoice  Includes prices, shipping terms, and discounts Chapter 7-40 Inputs to the Purchasing Process Receiving Report  Count and condition of goods received Bill of Lading Accompanies the good sent  Carrier assumes responsibility for the goods  Packing Slip Specific goods and quantities included in shipment  Included in merchandise package  Chapter 7-41 Sample Packing Slip Chapter 7-42 Outputs of the Purchasing Process Financial Statement Information Vendor Checks Supported by a voucher  Signed by a person designated by management  Check Register List of all checks issued for a particular period  By-product of batch processing  Chapter 7-43 Outputs of the Purchasing Process Discrepancy Reports Notes differences in quantities or amounts  Based on reconciliation of purchase order, receiving report, and the purchase invoice  Cash Requirements Forecast Predicts future payments and payment dates  Utilizes multiple source documents  Chapter 7-44 Purchasing Process Summary Chapter 7-45 IT in Sales and Purchasing Electronic input  Wireless capabilities Automated data-entry technology  Biometrics Inventory Management Systems  RFID Tags Chapter 7-46 Current Trends in Business Processes Business Processes Outsourcing (BPO)   Business without boundaries Offshoring Business Process Management Software (BPM) Collect corporate knowledge, data, and business rules  Accomplish business processes more efficiently  Chapter 7-47 Copyright Copyright 2012 John Wiley & Sons, Inc All rights reserved Reproduction or translation of this work beyond that permitted in Section 117 of the 1976 United States Copyright Act without the express written permission of the copyright owner is unlawful Request for further information should be addressed to the Permissions Department, John Wiley & Sons, Inc The purchaser may make backup copies for his/her own use only and not for distribution or resale The Publisher assumes no responsibility for errors, omissions, or damages, caused by the use of these programs or from the use of the information contained herein Chapter 7-48 Chapter Chapter 7-49 ... Cash Flows  Chapter 7-7 Steps in the Accounting Cycle Chapter 7-8 Coding Systems Importance of Coding for AISs Record, store, classify, and retrieve information  Utilize numeric and alphanumeric... Billing customers for goods and services Collecting payment for goods and services Forecasting sales and cash receipts Chapter 7-24 Data Flow Diagram of Sales Process Chapter 7-25 Inputs to the... identify and consistent Identification and Consistency   Include headings, page numbers, and dates Emphasize consistency Over time  Across departmental or divisional levels  With general accounting