Heagy PPTs c3

Chapter 3

Essential Elements and Basic Activities of
Accounting Systems

Learning Objectives
Discuss the significant similarities between paperbased accounting systems and computerized accounting systems.
 Identify the essential elements of a paper-based accounting system.
 Understand the basic activities of a paper-based accounting system.


Learning Objectives (cont.)
Identify the essential elements of a computerized accounting system.
 Understand the basic activities of a computerized accounting system.
 Compare batch posting in a computerized accounting system to real-time posting.


Why Review Paper-based
Accounting Systems?


Paper-based Accounting Systems:

- Provide a simple and familiar context in which to understand the issues of computerized accounting system. Similarities Between Paper-based and
Computerized Accounting Systems


Essential elements:
- Where data are captured, recorded, processed, stored, and reported?



Basic activities:
- How data are captured, recorded, processed, stored, and reported in the essential elements?

Paper-Based Accounting Systems


Essential Elements:
-

Source documents
Accounts
Chart of accounts
Journals (special and general)
Ledgers (subsidiary and general)
Outputs

Paper-Based Accounting Systems
(cont.)



Source Documents Samples:
-

Purchase order
Bill of lading
Cash receipts prelist
Time card

Paper-Based Accounting Systems
(cont.)


Accounts:
- Classifies monetary measurements of business activities of a similar nature
- Number varies with needs of the organization



Chart of Accounts:
- List of all account names and codes

Paper-Based Accounting Systems
(cont.)


Journals:
- Book of Original Entry
* Special
* General



Ledgers:
- Transaction data by account
* General
* Subsidiary

Paper-Based Accounting Systems
(cont.)


Accounting System Outputs Samples:
-

Sales order
Sales invoice
Schedule of aged accounts receivable
Receiving report

Paper-Based Accounting Systems
(cont.)
