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  1. 1. Chapter 11 <ul><li>The Accounting </li></ul><ul><li>Information System </li></ul>MANAGEMENT INFORMATION SYSTEMS 8/E Raymond McLeod, Jr. and George Schell Copyright 2001 Prentice-Hall, Inc. 11-
  2. 2. What is Data Processing? <ul><li>Manipulation or transformation of symbols for the purpose of increasing their usefulness. </li></ul><ul><li>Data processing (DP) and transaction processing (TP) are often used interchangeably. </li></ul><ul><li>Applied to business data </li></ul>11-
  3. 3. Accounting Information Systems (AIS) <ul><li>Gathers data describing a firm’s activity </li></ul><ul><li>Transforms data into information </li></ul><ul><li>Makes information available to users inside and outside the firm </li></ul>11-
  4. 4. Environment A Model of an Accounting Information System Information Data Management Data processing software Transform Accounting Information System Database Output physical resources Environment 11- Input physical resources
  5. 5. Data Processing Tasks <ul><li>1. Gather data </li></ul><ul><ul><li>Each transaction is documented </li></ul></ul><ul><ul><li>What happened? </li></ul></ul><ul><ul><li>When did it happen? </li></ul></ul><ul><ul><li>How much (volume, value)? </li></ul></ul><ul><ul><li>Transactions describe </li></ul></ul>11-
  6. 6. <ul><li>2. Manipulate data </li></ul><ul><ul><li>Classify (use codes) </li></ul></ul><ul><ul><li>Sort </li></ul></ul><ul><ul><li>Calculate </li></ul></ul><ul><ul><li>Summarize </li></ul></ul>Data Processing Tasks [cont.] 11-
  7. 7. <ul><ul><li>3. Store data </li></ul></ul><ul><ul><ul><li>Describes each transaction </li></ul></ul></ul><ul><ul><ul><li>Represents most of the database </li></ul></ul></ul>Data Processing Tasks [cont.] 11-
  8. 8. <ul><li>4. Document preparation </li></ul><ul><ul><li>Triggers </li></ul></ul><ul><ul><ul><li>By an action </li></ul></ul></ul><ul><ul><ul><li>By a time schedule </li></ul></ul></ul><ul><ul><li>Hardcopy or on-screen </li></ul></ul>Data Processing Tasks [cont.] 11-
  9. 9. Characteristics of the AIS <ul><li>Performs necessary tasks </li></ul><ul><li>Standard procedures </li></ul><ul><li>Detailed data </li></ul><ul><li>Historical focus </li></ul><ul><li>Provides minimal problem-solving information </li></ul>11-
  10. 10. Sample AIS The Distribution System <ul><li>Users </li></ul><ul><ul><li>Manufacturers </li></ul></ul><ul><ul><li>Wholesalers </li></ul></ul><ul><ul><li>Retailers </li></ul></ul><ul><li>General in nature </li></ul><ul><li>Used in many different types of firms </li></ul><ul><ul><li>Retailers </li></ul></ul><ul><ul><li>Manufacturing </li></ul></ul><ul><ul><li>Service </li></ul></ul>11-
  11. 11. DFDs <ul><li>Data flow diagram </li></ul><ul><ul><li>Document a system in a hierarchical manner </li></ul></ul><ul><ul><li>Data flows, processes, environmental elements </li></ul></ul><ul><li>Context level is overall system within environment </li></ul><ul><li>Leveled and Balanced DFDs </li></ul>11-
  12. 12. Customers Management Distribution system Suppliers Sales orders Rejected sales order notices Invoices Statements Payments by customers Commitments Purchases orders Shipments Supplier invoices Supplier statements Payments to suppliers Stock Other reports Budget reports Balance sheet Income statement A Context Diagram of the Distribution System 11- Materials stockroom
  13. 13. Customers Sales Orders Rejected sales order notices Invoices Statements Payments by customers Receivables ledger data 1. Fill Orders Inventory ledger data Payables ledger data Other reports Budget reports Balance sheet Income statement Management Received items Purchasing data Commitments Purchase Orders 2. Order replenish- ment stock Shipments Supplier invoices Supplier statements Payments to suppliers Suppliers Stock Materials stockroom A Figure 0 Diagram of the Distribution System 3. Maintain general ledger 11-
  14. 14. Customers 1.3 Billing 1.1 Order Entry 1.4 Accounts receivable 1.2 Inventory Sales orders Rejected sales order notices Accepted orders Filled items Purchasing data Received items Inventory ledger data Receivables ledger data Billed orders Statements Invoices Completed orders Payments by customers 3 3 2 2 A Figure 1 Diagram of the Systems that Fill Customer Orders 11-
  15. 15. Purchasing data Commitments Suppliers Payments to suppliers Supplier statements Supplier invoices Payable ledger data Materials stockroom Stock Incurred obligations 2.2 Receiving Issued purchase order data Filled purchase orders Shipments Received items Purchase orders Received purchases 2.1 Purchasing 2.3 Accounts payable A Figure 2 Diagram of the Systems that Order Replenishment Stock 3 1 11- 1
  16. 16. 3.1 Update general ledger Receivables ledger data Inventory ledger data Payables ledger data General ledger records Updated general ledger records General ledger Management report data 3.2 Prepare management reports Other reports Budget reports Balance sheet Income statement Management A Figure 3 Diagram of the Systems That Perform General Ledger Processes 11- 1 1 2
  17. 17. Fill Customer Orders <ul><li>Order entry </li></ul><ul><ul><li>Sales order form </li></ul></ul><ul><li>Inventory </li></ul><ul><ul><li>Process sales </li></ul></ul><ul><ul><li>Process receipts </li></ul></ul><ul><ul><li>Feed general ledger </li></ul></ul>11-
  18. 18. Customers Sales orders Edit rejects Sales order edit ejects 1.1.1 Edit order data Rejected sales order notices Edited orders Customer credit file Credit data 1.1.2 Computer credit check Edited and checked orders Credit Rejects Sales order credit rejects Accepted orders 1.1.3 Log in orders Order data Completed orders 1.1.4 Mark filled orders Date filed Order log A Figure 1.1 Diagram of the Order Entry System 11- 1.2 1.3
  19. 19. Backorder file 1.2.1 Check the balance on hand 1.2.2 Check the reorder point 1.2.3 Add received items 1.2.4 Provide general ledger data Item records Backorder records Inventory file Items available Updated item records Filled items Purchasing data Inventory file additions Inventory records Received items Inventory ledger data A Figure 1.2 Diagram of the Inventory System 2 2 Accepted orders 11- 1.1 1.3 3
  20. 20. Billing <ul><li>Invoice </li></ul><ul><ul><li>Note: </li></ul></ul><ul><ul><ul><li>1. Customer data </li></ul></ul></ul><ul><ul><ul><li>2. Item data </li></ul></ul></ul>11-
  21. 21. Customers 1.3.1 Obtain customer data Customer file 1.3.2 Prepare invoices Filled items Customer data Invoice data Billed orders Invoices Completed orders A Figure 1.3 Diagram of the Billing System 11- 1.2 1.1 1.4
  22. 22. Accounts Receivable <ul><li>Four separate triggers </li></ul><ul><ul><li>Today's sales </li></ul></ul><ul><ul><li>Today's payments </li></ul></ul><ul><ul><li>Time to send statements </li></ul></ul><ul><ul><li>Need to provide general ledger data </li></ul></ul>11-
  23. 23. Billed orders Accounts receivable file Receivables ledger data Receivables records to delete New receivables Receivables records 1.4.3 Prepare statements Customers Payments by customers Paid receivables file Paid receivables records Statement records Statements A Figure 1.4 Diagram of the Accounts Receivable System 1.4.1 Add new receivables 1.4.4 Provide general ledger data 1.4.2 Delete paid receivables 11- 3 1.3
  24. 24. Order Replenishment Stock <ul><li>Purchasing </li></ul><ul><ul><li>Emerging technologies </li></ul></ul><ul><ul><ul><li>EDI </li></ul></ul></ul><ul><ul><ul><li>ISDN </li></ul></ul></ul><ul><ul><li>Purchase order </li></ul></ul>11-
  25. 25. Supplier file Outstanding purchase order files 2.1.1 Select suppliers Purchasing data Past performance data Inventory and supplier data Purchase order data 2.1.2 Obtain verbal commitments Suppliers 2.1.3 Prepare purchase orders 2.1.4 Close out purchase orders Commitments Purchase Orders Issued purchase order data Incurred Obligations Purchase order records Filled purchase Orders Purchase records to close out A Figure 2.1 Diagram of the Purchasing System Purchase Order history file Removed purchase order records 11- 1 2.2 2.2 2.3
  26. 26. A Figure 2.2 Diagram of the Receiving System Suppliers Purchased items file 2.2.1 process receipts Materials stockroom 2.2.1 Notify other systems Purchased item data Issued purchase order data Shipments Stocks Receipt information Received items Filled purchase orders Received purchases 11- 2.1 2.1 2.3 1
  27. 27. Accounts Payable <ul><li>The firm pays suppliers when: </li></ul><ul><ul><li>1. Stock was ordered (P.O. file copy) </li></ul></ul><ul><ul><li>2. Stock was received (Received purchases file) </li></ul></ul><ul><ul><li>3. Invoice </li></ul></ul>11-
  28. 28. Paid Payables Records Paid Supplier Data Accounts payable file Received purchases file Paid payables file Suppliers Invoice and statement file Received Purchases Incurred Obligations New Payables data Payables Records Payables Ledger Data Receipt Data Payments to Suppliers Supplier Invoices Invoice Data Payables Records to delete A Figure 2.3 Diagram of the Accounts Payable System Payment data Supplier statements 2.3.4 Provide general ledger data 2.3.3 Delete paid payables 2.3.1 Set up supplier payables records 2.3.2 Make supplier payments 11- 2.1 2.2 3
  29. 29. AIS is the Foundation System <ul><li>The AIS must be implemented first </li></ul><ul><ul><li>MIS </li></ul></ul><ul><ul><li>DSS </li></ul></ul><ul><ul><li>ES </li></ul></ul>Depends on a well-designed AIS 11-
  30. 30. Summary <ul><li>AIS maintains financial records of the firm </li></ul><ul><li>Data processing components </li></ul><ul><ul><li>Data gathering </li></ul></ul><ul><ul><li>Data manipulation </li></ul></ul><ul><ul><li>Data storage </li></ul></ul><ul><ul><li>Document preparation </li></ul></ul><ul><li>AIS Subsystems </li></ul><ul><li>AIS contributes to problem solving </li></ul>11-