accounting information systems c h a p t e r 8 electronic presentations in microsoft® powerpoint®
TRANSCRIPT
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Accounting Information Systems
C H A P T E R 8C H A P T E R 8
Electronic Presentations in Microsoft® PowerPoint®
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1. Explain the relationship of the accounting information system to the management information system and identify the components of an AIS
2. Explain the goals and uses of special journals.
3. Describe the use of controlling accounts and subledgers.
Learning ObjectivesLearning Objectives
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4. Journalize and post transactions using special journals.
5. Prepare and test the accuracy of subledgers.
6. Apply journalizing and posting of transactions using special journals in a periodic inventory system. (Appendix 8A)
7. Journalize and post transactions with sales taxes to special journals. (Appendix 8B)
Learning ObjectivesLearning Objectives
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A system designed to collect and process data within an organization for the purpose of providing users with information.
Management Information SystemsManagement Information Systems
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Management Information System
Sales and Marketing
System
Finance System
Accounting Information
System
Human Resources
System
Production System
Internal External
Community
Competitors
Customers
Government
Industry
Suppliers
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The people, records, methods, and equipment that collect and process data from transactions and organize them in useful forms, and communicate results to decision makers.
Accounting Information Systems Accounting Information Systems (AIS)(AIS)
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Components of an AIS
Accounting Information
System
Accounts Payable
PayrollCapital Assets
Accounts Receivable
Inputs
Source Documents
Outputs
Reports/ Information to Internal/
External Users
Feedback Loop
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Impact of technology-based systems on accounting. Electronic funds transfer (EFT) E-commerce Computer hardware Computer software
Accounting and TechnologyAccounting and Technology
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Most organizations use Special Journals to enhance efficiency of transaction processing.Types Sales Journal Cash Receipts Journal Purchases Journal Cash Disbursements Journal
Special JournalsSpecial Journals
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A listing of individual accounts with a common characteristic.Common Subledgers Accounts Receivable Accounts Payable Inventory
SubledgersSubledgers
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ACCOUNTS RECEIVABLE LEDGER
Adams Company
Date PR Debit Credit Balance
Jan. 1 S5 500 500ACCOUNTS RECEIVABLE LEDGER
Baine Company
Date PR Debit Credit Balance
Jan. 16 S5 1,000 1,000ACCOUNTS RECEIVABLE LEDGER
Cook Company
Date PR Debit Credit Balance
Jan. 25 S5 415 415
Accounts Receivable Subledger
A separate subledger account is used to show how much each
individual customer owes.
A separate subledger account is used to show how much each
individual customer owes.
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ACCOUNTS RECEIVABLE LEDGER
Adams Company
Date PR Debit Credit Balance
Jan. 1 S5 500 500ACCOUNTS RECEIVABLE LEDGER
Baine Company
Date PR Debit Credit Balance
Jan. 16 S5 1,000 1,000ACCOUNTS RECEIVABLE LEDGER
Cook Company
Date PR Debit Credit Balance
Jan. 25 S5 415 415
After all items are posted,
the balance in the Accounts Receivable controlling
account must equal the sum
of the balances in
the subledger.
Accounts Receivable Subledger
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A subsidiary ledger: A) Includes transactions not covered by special
journals.
B) Is a listing of all of the accounts of a business.
C) Is a listing of individual accounts with a common characteristic.
D) Is a listing of all accounts with balances.
E) Is a listing of all special journals.
Mini-QuizMini-Quiz
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A subsidiary ledger: A) Includes transactions not covered by special
journals.
B) Is a listing of all of the accounts of a business.
C) Is a listing of individual accounts with a common characteristic.
D) Is a listing of all accounts with balances.
E) Is a listing of all special journals.
Mini-QuizMini-Quiz
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The sales journal is used to record sales of merchandise on credit.
Sales JournalSales Journal
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On February 2, Jason Henry purchased $450 of merchandise on account from Outdoors Unlimited. The goods originally cost Outdoors $315. Record the entry in the Sales Journal.
(Assume the use of a perpetual inventory system.)
Sales Journal — Example
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Sales Journal
Page 1
DateAccount Debited
Invoice Number PR
Dr. A/R Cr. Sales
Dr. COGS Cr.
Inventory2011
Feb. 2 Jason Henry 307 450 315
SALES JOURNAL
Since each transaction yields a debit to Accounts Receivable and a credit to Sales, we need only one
column for these two accounts. This column total is posted monthly.
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Sales Journal
Page 1
DateAccount Debited
Invoice Number PR
Dr. A/R Cr. Sales
Dr. COGS Cr.
Inventory2011
Feb. 2 Jason Henry 307 450 315
SALES JOURNAL
Similarly, each transaction yields a debit to Cost of Goods Sold and a credit to Inventory. Therefore, these accounts can also be included together in one column.
This column total would also be posted monthly.
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ACCOUNTS RECEIVABLE SUBLEDGER
Jason Henry
Date PR Debit Credit Balance
Feb. 2 450 450
Sales JournalPage 1
DateAccount Debited
Invoice Number PR
Dr. A/R Cr. Sales
Dr. COGS Cr.
Inventory2011
Feb. 2 Jason Henry 307 450 315
SALES JOURNAL
Daily, each transaction is posted
to the appropriate Accounts Receivable subledger account.
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ACCOUNTS RECEIVABLE SUBLEDGER
Jason Henry
Date PR Debit Credit Balance
2011
Feb. 2 S1 450 450
Sales Journal
Page 1
DateAccount Debited
Invoice Number PR
Dr. A/R Cr. Sales
Dr. COGS Cr.
Inventory2011
Feb. 2 Jason Henry 307 450 315
SALES JOURNAL
A in the PR column indicates
the transaction has been posted to the subledger account.
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Here is the Sales Journal after recording some additional sales.
Sales Journal
Page 1
DateAccount Debited
Invoice Number PR
Dr. A/R Cr. Sales
Dr. COGS Cr.
Inventory2011
Feb. 2 Jason Henry 307 450 3157 Albert Co. 308 500 35513 Bam Moore 309 350 26015 Paul Roth 310 200 150
SALES JOURNAL
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Sales JournalPage 1
DateAccount Debited
Invoice Number PR
Dr. A/R Cr. Sales
Dr. COGS Cr.
Inventory2011
Feb. 2 Jason Henry 307 450 315 7 Albert Co. 308 500 355 13 Bam Moore 309 350 260 15 Paul Roth 310 200 150 22 Jason Henry 311 225 155 25 Frank Booth 312 175 95 28 Albert Co. 313 250 170
28 Totals 2,150 1,500
(106/413) (502/119)
SALES JOURNAL
On Feb. 28th , post the column total to Accounts
Receivable and Sales.Feb. 2 S1 2,150 2,150
Feb. 2 S1 2,150 2,150
2011
2011
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Sales JournalPage 1
DateAccount Debited
Invoice Number PR
Dr. A/R Cr. Sales
Dr. COGS Cr.
Inventory2011
Feb. 2 Jason Henry 307 450 315 7 Albert Co. 308 500 355 13 Bam Moore 309 350 260 15 Paul Roth 310 200 150 22 Jason Henry 311 225 155 25 Frank Booth 312 175 95 28 Albert Co. 313 250 170
28 Totals 2,150 1,500
(106/413) (502/119)
SALES JOURNAL
Now post to the COGS and Inventory accounts …
Feb. 2 S1 1,500 1,500
Feb. 2 S1 1,500 1,5002011
2011
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Sales JournalPage 1
DateAccount Debited
Invoice Number PR
Dr. A/R Cr. Sales
Dr. COGS Cr.
Inventory2011
Feb. 2 Jason Henry 307 450 315 7 Albert Co. 308 500 355 13 Bam Moore 309 350 260 15 Paul Roth 310 200 150 22 Jason Henry 311 225 155 25 Frank Booth 312 175 95 28 Albert Co. 313 250 170
28 Totals 2,150 1,500
(106/413) (502/119)
SALES JOURNAL
… and include the posting references.
Feb. 2 S1 1,500 1,500
Feb. 2 S1 1,500 1,5002011
2011
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Schedule of Accounts ReceivableFebruary 28, 2011
Frank Booth 175$ Jason Henry 675 Bam Moore 350 Paul Roth 200 Albert Co. 750 Total accounts receivable 2,150$
The Accounts Receivable controlling
account and the subledger are in balance.
Testing the Ledger
GENERAL LEDGER
Accounts Receivable No. 106
Date PR Debit Credit Balance
2011
Feb 28 S1 2,150 2,150
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If a company has few sales returns, they may record them in the General Journal.
But, if a company has lots of sales returns, they may use a Sales Returns and Allowances Journal.
Sales Returns and Allowances
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The cash receipts journal is used to record all receipts of cash.
Cash Receipts JournalCash Receipts Journal
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Categories of Cash ReceiptsCash from cash salesCash from credit customersCash from other sources
Cash Receipts Journal — ExampleCASH RECEIPTS JOURNAL Page 1
Date Accounts Credited PR ExplanationCash Dr.
Sales Discount
Dr.
Accts. Rec. Cr.
Sales Cr.
Other Accts.
Cr.
COGS Dr. Inventory
Cr2011
Feb. 7 Sales Cash sale 4,450 4,450 3,150 12 Jason Henry Invoice, Feb 2 441 9 450 14 Sales Cash sale 3,925 3,925 2,950 17 Albert Co. Invoice, Feb 7 490 10 500 20 Note payable Note to bank 750 750 21 Sales Cash sale 4,700 4,700 3,400 22 Interest revenue Bank account 250 250 23 Bam Moore Invoice, Feb 13 343 7 350 25 Paul Roth Invoice, Feb 17 196 4 200 28 Sales Cash sale 4,225 4,225 3,050
28 Total 19,770 30 1,500 17,300 1,000 12,550
(101) (415) (106) (413) (x) (502/119)
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Amount is posted individually to subledger.Acct. No. Amount is posted to specified account.
Cash Receipts Journal
CASH RECEIPTS JOURNAL Page 1
Date Accounts Credited PR Explanation Cash Dr.
Sales Discount
Dr.Accts. Rec.
Cr. Sales Cr.
Other Accts.
Cr.COGS Dr.
Inventory Cr2011
Feb. 7 Sales Cash sale 4,450 4,450 3,150 12 Jason Henry Invoice, Feb 2 441 9 450 14 Sales Cash sale 3,925 3,925 2,950 17 Albert Co. Invoice, Feb 7 490 10 500
20 Note payable 245 Note to bank 750 750 21 Sales Cash sale 4,700 4,700 3,400
22 Interest revenue 409 Bank account 250 250 23 Bam Moore Invoice, Feb 13 343 7 350 25 Paul Roth Invoice, Feb 17 196 4 200 28 Sales Cash sale 4,225 4,225 3,050
28 Total 19,770 30 1,500 17,300 1,000 12,550
(101) (415) (106) (413) (x) (502/119)
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The Purchases Journal is used to record all purchases on credit.
Purchases JournalPurchases Journal
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Amount is not posted individually to an account.Amount is posted individually to subsidiary ledger.
Acct. No. Amount is posted to specified account.
Purchases Journal
PURCHASES JOURNAL Page 3
Date AccountInvoice
Date Terms PR
Accts. Payable
Cr.Inventory
Dr.
Office Supplies
Dr.
Other Accts.
Dr.2011
Feb 3 Horung Supply Co Feb. 2 n/30 350 275 755 Ace Mfg. Co 5 2/10,n/30 200 20013 Wynet & Co. 10 2/10,n/30 150 15020 Smite Co. 18 2/10,n/30 300 30025 Ace Mfg. Co 24 2/10,n/30 100 10028 Store supplies/ITT Co. 28 n/30 125/ 225 125 25 75
28 Totals 1,325 1,150 100 75
(201) (505) (124) ( )
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The Cash Disbursements
Journal is used to record all
payments of cash.
Outdoors Unlimited
Cash Disbursements JournalCash Disbursements Journal
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Amount is not posted individually to an account.Amount is posted individually to subledger.
Acct. No. Amount is posted to specified account.
Cash Disbursements Journal
CASH DISBURSEMENTS JOURNAL Page 1
Date Ch. No. Payee Account Debited PRCash Cr.
Merch. Inventory
Cr.
Other Accounts
Dr.
Accounts Payable
Dr.2011
Feb. 3 105 L & N Railroad Inventory 119 15 155 106 East Sales Co. Inventory 119 25 2513 107 Ace Mfg. Co Ace Mfg. Co. 196 4 20020 108 Jerry Hale Salaries expense 622 250 25025 109 Wynet & Co. Wynet & Co. 147 3 15028 110 Smite Co. Smite Co. 294 6 300
28 Totals 927 13 290 650
(101) (119) ( ) (201)
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Used for all transactions not recorded in a special journal. Closing entries Adjusting entries Correcting entries Other entries
General JournalGeneral Journal
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Mini-QuizMini-Quiz
Purchased equipment on credit.
Sold merchandise for cash.
Paid for supplies that were purchased on account.
Sold merchandise on account.
Give the name of the journal in which the following transactions should be recorded.
PJ
CRJ
CDJ
SJ
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Recording and posting is similar to a perpetual system.
Some of the columns change in a periodic system.
Special Journals Under a Special Journals Under a Periodic System-Appendix 8APeriodic System-Appendix 8A
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The column for Cost of Goods
Sold and Inventory is not needed with the
periodic system.
Sales Journal — Periodic System
SALES JOURNAL Page 3
DateAccount Debited
Invoice Number PR
Dr. A/R Cr. Sales
2011Feb. 2 Jason Henry 307 450
7 Albert Co. 308 50013 Bam Moore 309 35015 Paul Roth 310 20022 Jason Henry 311 22525 Frank Booth 312 17528 Albert Co. 313 250
28 Total 2,150
(106/413)
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Cash Receipts Journal Periodic System
CASH RECEIPTS JOURNAL Page 1
Date Accounts Credited PR Explanation Cash Dr.
Sales Discount
Dr.Accts. Rec.
Cr. Sales Cr.
Other Accts.
Cr.2011
Feb. 7 Sales Cash sale 4,450 4,450 12 Jason Henry Invoice, Feb 2 441 9 450 14 Sales Cash sale 3,925 3,925 17 Albert Co. Invoice, Feb 7 490 10 500
20 Note payable 245 Note to bank 750 750 21 Sales Cash sale 4,700 4,700
22 Interest revenue 409 Bank account 250 250 23 Bam Moore Invoice, Feb 13 343 7 350 25 Paul Roth Invoice, Feb 17 196 4 200 28 Sales Cash sale 4,225 4,225
28 Total 19,770 30 1,500 17,300 1,000
(101) (415) (106) (413) (x)
The column for Cost of Goods Sold and Inventory is not needed with the periodic system.
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Purchases Journal — Periodic SystemPURCHASES JOURNAL Page 3
Date AccountInvoice
Date Terms PR
Accts. Payable
Cr.Purchases
Dr.
Office Supplies
Dr.
Other Accts.
Dr.2011
Feb 3 Horung Supply Co Feb. 2 n/30 350 275 755 Ace Mfg. Co 5 2/10,n/30 200 20013 Wynet & Co. 10 2/10,n/30 150 15020 Smite Co. 18 2/10,n/30 300 30025 Ace Mfg. Co 24 2/10,n/30 100 10028 Store supplies/ITT Co. 28 n/30 125/ 225 125 25 75
28 Totals 1,325 1,150 100 75
(201) (505) (124) ( )
The Inventory column in the perpetual system is replaced with Purchases column in the periodic
system.
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Cash Disbursements JournalPeriodic System
CASH DISBURSEMENTS JOURNAL Page 1
Date Ch. No. Payee Account Debited PRCash Cr.
Purchase Discounts
Cr.
Other Accounts
Dr.
Accounts Payable
Dr.2011
Feb. 3 105 L & N Railroad Inventory 119 15 155 106 East Sales Co. Inventory 119 25 2513 107 Ace Mfg. Co Ace Mfg. Co. 196 4 20020 108 Jerry Hale Salaries expense 622 250 25025 109 Wynet & Co. Wynet & Co. 147 3 15028 110 Smite Co. Smite Co. 294 6 300
28 Totals 927 13 290 650
(101) (507) (x) (201)
The Inventory column in the perpetual system is replaced with Purchases Discounts column in the
periodic system.
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Additional columns must be added to special journals to record PST and GST.
Column Needed
JournalPST
PayableGST
PayableGST
Receivable
Sales yes yes
Cash Rec. yes yes
Purchases yes
Cash Disb. yes
Special Journals and Sales Special Journals and Sales Taxes- Appendix 8BTaxes- Appendix 8B
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Identify the different types of special journals?
Sales journal
Cash receipts journal
Purchases journal
Disbursements journal
ReviewReview
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What is the purpose of special journals?Special journals help reduce the costs related to the time and effort of posting accounts.
ReviewReview
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Why should sales to and receipts of cash from credit customers be recorded and posted daily?
Daily recording and posting of credit sales and cash receipts from customers provides up-to-date information used in decisions about granting credit to customers. Also, up-to-date account balances are needed if customers inquire about the amount of their balances.
ReviewReview
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End of Chapter End of Chapter