You are on page 1of 30

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
processing
software

Data

Database
Accounting
Information
System

Input
physical
resources

Transform

Environment

Output
physical
resources

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

Customers

Sales orders

A Context Diagram of the


Distribution System
Commitments
Purchases orders

Rejected
sales
order
notices

Shipments
Supplier invoices

Invoices

Distribution
system

Statements

Suppliers

Supplier statements

Payments by customers

Payments to suppliers
Income
statement

Balance
sheet
Budget
reports

Stock

Materials
stockroom

Management
Other reports
11-12

Customers

Sales Orders

A Figure 0 Diagram of the


Distribution System

Rejected sales order notices


Invoices

1.
Fill
Orders

Statements
Payments by customers
Receivables ledger data
Inventory ledger data

Purchasing data

Commitments

Received
items

3.
Maintain
general
ledger
Income
statement

Payables ledger data


Other reports
Budget reports

2.
Order
replenishment
stock

Purchase Orders

Balance
sheet

Shipments

Suppliers

Supplier invoices

Supplier statements
Payments to suppliers

Management
Stock

Materials
stockroom

11-13

A Figure 1 Diagram of the


Systems that Fill Customer
Orders

Sales orders

Customers

Rejected sales
order notices

1.1
Order
Entry
Statements

Payments by customers

Accepted orders

Completed
orders

1.2
Inventory

Invoices

Billed orders

1.4
Accounts
receivable

Filled items

1.3
Billing
Purchasing data
Inventory
ledger data

Receivables ledger data

Received
items

11-14

A Figure 2 Diagram of the Systems that Order Replenishment Stock


1

Purchasing data

Commitments
2.1
Purchasing

Filled
purchase
orders

Purchase orders

Issued purchase
order data

Shipments

Received items
2.2
Receiving

1
Materials
stockroom

Stock

Received
purchases
Incurred obligations
Payable
ledger data

Suppliers

Supplier invoices

2.3
Accounts
payable

Supplier statements
Payments to suppliers
11-15

A Figure 3 Diagram of the Systems That


Perform General Ledger Processes
1
1
2

Receivables ledger data


Inventory ledger data
Payables ledger data

3.1
Update
general
ledger

General ledger records


Updated general ledger records

Management report data

3.2
Prepare
management
reports

General
ledger

Other reports
Budget 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


Customers

Sales orders

Edit rejects

Edited
orders

1.1.1
Edit order
data

Rejected
sales order
notices

Customer
Customer
credit
creditfile
file

Edited and checked orders

Accepted
orders
1.2

1.3

1.1.3
Log in
orders

Completed orders

1.1.2
1.1.2
Computer
Computer
credit
credit
check
check

Credit data

Credit Rejects

Order data

1.1.4
Mark
filled
orders

Sales
Sales
order
order
edit
edit
ejects
ejects

Date filed

Sales
order
credit
rejects

Order log
11-18

1.1

A Figure 1.2 Diagram of the Inventory System


Accepted
orders

1.2.1
1.2.1
Check
Check
the
the
balance
balance
on
onhand
hand

Backorder
records

Backorder
Backorder
file
file

Filled
items

1.3

Inventory
file additions

Item
records

Items
available

1.2.3
1.2.3
Add
Add
received
received
items
items

Received
items

Inventory
Inventory
file
file

Updated
item
records

1.2.2
1.2.2
Check
Check
the
Purchasing data
the
reorder
reorder
point
point

Inventory
records

1.2.4
1.2.4
Provide
Provide
general
general
ledger
ledger
data
data

Inventory
ledger
data

2
11-19

Billing

Invoice
Note:
1. Customer data
2. Item data

11-20

1.2

Filled
items

1.3.1
Obtain
customer
data

A Figure 1.3 Diagram of the


Billing System

Customer data

Customer
file

Invoice
data

Invoices

1.3.2
Prepare
invoices

Billed orders

Customers
Customers

1.4

Completed
orders
1.1

11-21

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

A Figure 1.4 Diagram of the


Accounts Receivable System

Billed orders

1.4.1
Add new
receivables

New receivables

Receivables records

1.4.4
Provide
general
ledger data

Accounts
Accounts
Statement records receivable
receivable
file
file

1.4.3
Prepare
statements

Receivables
records
to delete

Receivables
ledger data

1.4.2
Delete paid
receivables

Statements
Payments by
Customers customers

Paid
receivables
records

Paid
receivables
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
1

2.1.1
Select
suppliers

Past performance data

Inventory
and supplier data
2.1.2
Obtain verbal
commitments

Purchase order
data

2.2
2.3

Issued purchase
order data

Incurred
Obligations

Purchase
Purchase
Order
Order
history
historyfile
file

2.1.3
Prepare
purchase
orders

Supplier
Supplier
file
file

Purchase Orders

Suppliers

Purchase
order records
Outstanding
Outstanding
purchase
purchase
order
orderfiles
files

Removed purchase
order records

Commitments

2.1.4
Close out
purchase
orders

Purchase records
to close out
Filled purchase Orders
2.2
11-25

A Figure 2.2 Diagram of the Receiving System


2.1

Suppliers

Purchased
item data

Shipments
Stocks

2.2.1
process
receipts

Issued
purchase
order
data

Purchased
Purchased
items
itemsfile
file

Receipt
information

Received items
Materials
stockroom

1
2.2.1
Notify Filled purchase orders
other
2.1
systems
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


2.1

Incurred
Obligations
New Payables
data

2.3.1
Set up
supplier
payables
records
2.2

Payables
Records to
delete

Received
Received
purchases
purchases
file
file

2.3.2
Make
supplier
payments

Paid Payables Records

2.3.3
Delete paid
payables

Payment
data

Payables Ledger
Data
2.3.4
Provide
general
ledger
data

Accounts
Accounts
payable
payable
file
file

Received
Purchases

Receipt
Data

Payables
Records

Supplier Invoices

Paid
Paid
payables
payables
file
file

Invoice
Invoiceand
and Supplier
statement
statement statements
file
Paid Supplier
file
Data
Invoice Data
Suppliers
Suppliers
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