Chapter 2 introduction to accounting records, James Hall Book , Transaction Processing. Source Document, journal, vouchers,

1. Habib Ullah Qamar
Govt. college of Commerce Gujranwala
3/4/2016

2.  Transactions
 Transaction Cycles
 Cash flow of TPS
 Subsystems of Cycles
 The Expenditure cycle
 Conversion cycle
 Revenue cycle

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 Accounting Records
 Manual Accounting System Records
 Documents
 Journals
 Ledger
 Audit Trial
 Computer Based Systems
 Files and its types
 The Digital Audit Trail

4.  A document, voucher or journal (Hard or soft
Copy) that is used as an evident of economic
event in a transaction cycle is called
Accounting record.
 Manual System examples are…..?
 Documents
 Ledgers
 journals
3/4/2016

5.  A document provides evidence of an
economic event and may be used to initiate
transaction processing. Example?
 Voucher / receipt
 Some documents are a result of transaction
processing. Example?
 Bill etc
 Source documents, product documents
 And turnaround documents

6.  Documents being created at the beginning
(the source) of the transaction after an
economic event occurred and used to capture
and formalize transaction data that the
transaction cycle needs for processing are
called Source document.
 For Example a customer order some products
to buy, salesman collect the list of items and
issue a sale order to sale department, Sales
Order?

8.  Product documents are the result of
transaction processing rather than the
triggering mechanism for the process.
 For example, a payroll check to an employee
is a product document of the payroll system.

9.  Turnaround documents are those product
documents that are used as a source
documents for another system/subsystem.
 It contains important information about a
customer’s account to help the cash receipts
system process the payment.
 Cash receipts will match customer payments
to the correct customer accounts.
 Hence the bill issued by sales system is the
input or source document for cash receipt
system

11. Type of Transaction
cycle?
Type of Event?
Source Document?
ECONOMIC
Revenue
Sales Order

12. Turn-Around
Document
Find Source document, product document,
and turnaround document
Source
Document
Product
Document

13.  What is journal
 Special
 Register
 General journal

14.  Definition
 Types
 General
 Subsidiary

15.  The accounting records discussed provide an
audit trail/trace/follow for tracing
transactions from source documents to the
financial statements.
 Of the many purposes of the audit trail, most
important to accountants is the year-end
audit.
 While the study of financial auditing falls
outside the scope of this text.
 Read in Book…….

16.  If you read Audit Trail of Manual system, you
will find it less observable, but still this
system is being used.
 CBS stores the data and information of
manual system in digital format in three
different type of magnetic files.
 Master File
 Transaction File
 Reference File

17.  Master File : It contains account data previously
stored in ledger.
 Data values, also called accounting records, are
updated with transaction Files.
 Transaction File : used to change or update
values stored in Master File. Examples?
 Sales orders, receipts etc examples.
 Reference File: stores data that are used as
standards or reference for processing of
transaction. Examples?
 Customer List, Tax Rates, Price Lists,
 Archive Files: Records of Past Transaction
retained for future use.

18. Files?
Dashed
Lines

19.  How you will define Accounting records?
 What is difference between Economic and
non-economic Transaction?
 Try to enlist achievements of computer based
system as compared to Manual System.
 A bill generated by sales system is a
…………………….documents.
 What is symbol used for system in diagrams?

20.  Documentation Techniques…Chapter 2
 Data Flow Diagrams
 Entity Relation Diagram
 Flow Charts
 Pre-reading will be appreciated and will give
you more benefit…

21. See you again in sha ALLAH
3/4/2016