Accounting Information Systems ch. 2

data processing cycle

The four operations (data input, data storage, data processing, and information output) performed on data to generate meaningful and relevant information.

source documents

Documents used to capture transaction data at its source- when it takes place.

Examples: sales orders, purchase orders, employee time cards

turnaround document

Records of company data sent to an external party and then returned to the system as input. in machine-readable form to facilitate their subsequent processing as input records.

Example: utility bill

source data automation

The collection of transaction data in machine-readable form at the time and place of origin.

Examples: point-of-sale terminals, ATMs

general ledger

A ledger that contains summary-level data for every asset, liability, equity, revenue, and expense account of the organization.

subsidiary ledger

A ledger used to record detailed data for a general ledger account with many individual sub-accounts.

Examples: accounts receivable, inventory, accounts payable

control account

A title given to a general ledger account that summarizes the total amounts recorded in a subsidiary ledger.

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.

coding

The systematic assignment of numbers or letters to items to classify and organize them.

sequence codes

Items are numbered consecutively so that gaps in the sequence code indicate missing items that should be investigated.

Examples: prenumbered checks, invoices, purchase orders

block code

Chart of numbers that are reserved for specific categories of data, thereby helping to organize the data.

Example: chart of accounts

group code

Two or more subgroups of digits that are used to code an item. Often used in conjunction with block code.

mnemonic code

Letters and numbers that are interspersed to identify an item. It is derived from the description of the item and is usually easy to memorize.

chart of accounts

A listing of all the numbers assigned to balance sheet and income statement 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.

general journal

A journal used to record infrequent or non-routine transactions.

Examples: loan payments, end-of-period adjusting and closing entries

specialized journals

A journal used to record a large number of repetitive transactions.

Examples: credit sales, cash receipts, purchases, and cash disbursments

audit trail

A path that allows a transaction to be traced through a data processing system from point of origin to output or backwards from output to point of origin. It is used to check the accuracy and validity of ledger postings and to trace changes in general ledger accounts from their beginning balance to their ending balance.

entity

The item about which information is stored in a record.

Examples: employee, inventory item, customer, etc.

attributes

The properties, identifying numbers, and characteristics of an entity that is stored in the database.

Examples: employee number, pay rate, name, and address

field

The portion of a data record where the data value for a particular attribute is stored.

Example: In a spreadsheet each row might represent a customer and each column is an attribute of the customer. Each cell in a spreadsheet is called a field.

record

A set of fields whose data values describe specific attributes of an entity, such as all payroll data relating to a single employee.

Example: row in a spreadsheet

data value

The actual value stored in a field. It describes a particular attribute of an entity.

Example: the customer name field would contain "ZYX Company" if that company was a customer.

file

A set of logically related records.

Example: payroll records of all employees

master file

A permanent file of records that stores cumulative data about an organization. As transactions take place, individual records within it are updated to keep them current.

transaction file

A file that contains the individual business transactions that occur during a specific fiscal period. conceptually similar to a journal in a manual AIS.

database

A set of interrelated, centrally controlled data files that are stored with as little data redundancy as possible. consolidates records previously stored in separate files into a common pool and serves a variety of users and data processing applications.

batch processing

Accumulating transaction records into groups for processing at a regular interval such as daily or weekly. The records are usually sorted into some sequence (such as numerically or alphabetically) before processing.

online, real-time processing

The computer system processes data immediately after capture and provides updated information to users on a timely basis.

document

A record of a transaction or other company data.

Examples: checks, invoices, receiving reports, and purchase requisitions

report

System output, organized in a meaningful fashion, that is used by employees to control operational activities, by managers to make decisions and design strategies, and by investors and creditors to understand a company's business activities.

query

A request for the data base to provide the information needed to deal with a problem or answer a question. The information is retrieved, displayed or printed, and/or analyzed as requested.

enterprise resource planning (ERP) system

• A system that integrates all aspects of an organization's activities- such as accounting, finance, marketing, human resources, manufacturing, inventory management- into one system.

• modularized; companies can purchase the individual modules that meet their specific needs.

• facilitates information flow among the company's various business functions and manages communications with outside stakeholders.