MANAGEMENT INFORMATION SYSTEMS 8/E

Raymond McLeod, Jr. and George Schell

Chapter 11
The Accounting
Information System

11-1
Copyright 2001 Prentice-Hall, Inc.
 What is Data Processing?
Manipulation or transformation of symbols
for the purpose of increasing their
usefulness.
Data processing (DP) and transaction
processing (TP) are often used
interchangeably.
Applied to business data

11-2
 Accounting Information
Systems (AIS)
Gathers data describing a firms activity
Transforms data into information
Makes information available to users inside
and outside the firm

11-3
 A Model of an Accounting Information System
Environment

Information Management

Data
Data processing
software

Database
Accounting
Information
System

Input Output
physical Transform physical
resources resources

Environment
11-4
 Data Processing Tasks

1. Gather data
Each transaction is documented
What happened?
When did it happen?
How much (volume, value)?
Transactions describe

11-5
Data Processing Tasks [cont.]

2.Manipulate data
Classify (use codes)
Sort
Calculate
Summarize

11-6
Data Processing Tasks [cont.]

3. Store data
Describes each transaction
Represents most of the database

11-7
 Data Processing Tasks [cont.]

4. Document preparation
Triggers
By an action
By a time schedule
Hardcopy or on-screen

11-8
 Characteristics of the AIS

Performs necessary tasks

Standard procedures
Detailed data
Historical focus
Provides minimal problem-solving
information

11-9
 Sample AIS
The Distribution System
Users
Manufacturers
Wholesalers
Retailers
General in nature
Used in many different types of firms
Retailers
Manufacturing
Service 11-10
 DFDs

Data flow diagram

Document a system in a hierarchical manner
Data flows, processes, environmental elements
Context level is overall system within
environment
Leveled and Balanced DFDs

11-11
 Sales orders
A Context Diagram of the
Distribution System
Customers
Commitments

Purchases orders
Rejected
sales
order
notices
Shipments

Invoices Supplier invoices

Suppliers
Distribution Supplier statements
Statements
system
Payments by customers

Payments to suppliers

Income Balance
statement sheet
Stock Materials
Budget stockroom
reports
Management
Other reports
11-12
 Sales Orders
Customers
Rejected sales order notices A Figure 0 Diagram of the
Invoices
Distribution System
Statements 1.
Payments by customers
Fill
Orders
Receivables ledger data

Inventory ledger data

Purchasing data Commitments
Received
items

3. Payables ledger data 2. Purchase Orders

Maintain Other reports
Order
Shipments Suppliers
general replenish-
Budget reports Supplier invoices
ledger ment
stock
Income Balance Supplier statements
statement sheet
Payments to suppliers

Management
Materials
Stock
stockroom 11-13
 Sales orders
A Figure 1 Diagram of the
Rejected sales
Systems that Fill Customer
Customers order notices Orders
Accepted orders
1.1
Order
Payments by customers

Entry

Filled items
Completed 1.2
orders Inventory

Invoices

Billed orders 1.3

Billing
1.4 Purchasing data
Accounts Inventory
Receivables ledger data 2
receivable ledger data
Received
2 items
3 3 11-14
A Figure 2 Diagram of the Systems that Order Replenishment Stock
Purchasing data Commitments
1 2.1
Purchasing Purchase orders

Issued purchase
Filled order data Shipments
purchase Suppliers
orders

Received items
1
2.2
Receiving
Stock Materials
stockroom
Received
purchases Supplier invoices

2.3
Incurred obligations Supplier statements
Accounts
payable
Payable Payments to suppliers
ledger data
3
11-15
 A Figure 3 Diagram of the Systems That
Perform General Ledger Processes
Receivables ledger data 3.1
1 General ledger records
Update
Inventory ledger data general Updated general ledger records
1
ledger
Payables ledger data
2
Management report data
General
ledger

Other reports
3.2
Budget reports
Prepare
management
reports
Balance sheet
Income statement Management

11-16
 Fill Customer Orders

Order entry
Sales order form
Inventory
Process sales
Process receipts
Feed general ledger

11-17
 A Figure 1.1 Diagram of the Order Entry System
Sales orders Edit rejects
Customers Sales
order
Edited edit
orders ejects
Rejected 1.1.1
sales order Edit order
notices Customer
data
credit file

Credit data
1.1.2
Edited and checked orders Computer
credit
check
Sales
Accepted order
orders Credit Rejects credit
1.1.3 Order data
1.2 rejects
Log in
orders

1.1.4 Date filed

Completed orders Mark
1.3 Order log
filled
orders
11-18
 A Figure 1.2 Diagram of the Inventory System
1.1
Accepted
orders
1.2.1 Received
1.2.3
Check Item Inventory items
Add 2
the records file additions
received
balance
items
on hand
Backorder
records Inventory
Items file
Backorder available
file
Updated Inventory
item Inventory ledger
records records data
1.2.2 1.2.4 3
Check Provide
Filled the Purchasing data general
items reorder ledger
point data

1.3 2
11-19
 Billing

Invoice
Note:
1. Customer data
2. Item data

11-20
 1.2 A Figure 1.3 Diagram of the
Filled Billing System
items

1.3.1 Customer data

Obtain Customer
customer file
data

Invoice
data
1.3.2
Prepare
Invoices invoices Billed orders
Customers 1.4

Completed
orders
11-21
1.1
 Accounts Receivable

Four separate triggers

Today's sales
Today's payments
Time to send statements
Need to provide general ledger data

11-22
1.3
Billed orders A Figure 1.4 Diagram of the
Accounts Receivable System
1.4.1 New receivables Receivables records
Add new
receivables

1.4.4
Provide
Accounts general
Statement records receivable
ledger data
file
Receivables Receivables
records ledger data
3
1.4.3 to delete
Prepare 1.4.2
statements Delete paid
receivables
Statements Paid
receivables Paid
Payments by
records receivables
Customers customers file
11-23
 Order Replenishment Stock

Purchasing
Emerging technologies
EDI
ISDN
Purchase order

11-24
 A Figure 2.1 Diagram of the Purchasing System
Purchasing data 2.1.1 Past performance data Supplier
1 Select file
suppliers
Inventory
and supplier data

Purchase order 2.1.2

data Obtain verbal Commitments
commitments
Issued purchase
order data
2.2 Purchase Orders
2.1.3 Suppliers
Prepare
Purchase
2.3 purchase
Incurred order records
orders
Obligations
Outstanding
purchase
Purchase records
order files
to close out
Purchase
Order
2.1.4 Filled purchase Orders
history file
Removed purchase Close out 2.2
order records purchase
orders
11-25
A Figure 2.2 Diagram of the Receiving System
2.1
Issued
purchase
order
data
Purchased
Suppliers item data
Purchased
items file

Shipments
Receipt
2.2.1 information
Stocks process
receipts

Received items
1
Materials 2.2.1
stockroom Notify Filled purchase orders
other
systems 2.1

Received purchases
11-26 2.3
 Accounts Payable

The firm pays suppliers when:

1.Stock was ordered (P.O. file copy)
2.Stock was received (Received purchases file)
3.Invoice

11-27
 A Figure 2.3 Diagram of the Accounts Payable System
Incurred
Obligations Payables
2.1 Payables Ledger
Records
New Payables Data
2.3.1
data
Set up 2.3.4
supplier Accounts Provide 3
payables payable general
records file ledger
data
Received Payables
2.2 Purchases Records to Paid Payables Records
delete Paid
Received payables
purchases 2.3.3 file
Supplier Invoices
file Delete paid
payables Invoice and
Payment Supplier
Receipt data statement statements
Data Paid Supplier file
2.3.2 Data Invoice Data
Make
Suppliers
supplier
payments
Payments to Suppliers
11-28
 AIS is the Foundation System

The AIS must be implemented first

MIS
Depends on a
DSS well-designed AIS
ES

11-29
 Summary
AIS maintains financial records of the firm
Data processing components
Data gathering
Data manipulation
Data storage
Document preparation
AIS Subsystems
AIS contributes to problem solving

11-30