Basic accounting equation

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Aseervatham and D. Anandarajah. Slides prepared by Kaye Watson. 1-1
Basic accounting equation

© 2003 McGraw-Hill Australia Pty Ltd, PPTs t/a Accounting Information & Reporting Systems by A.
Aseervatham and D. Anandarajah. Slides prepared by Kaye Watson. 1-2
Basic accounting equation

© 2003 McGraw-Hill Australia Pty Ltd, PPTs t/a Accounting Information & Reporting Systems by A.
Aseervatham and D. Anandarajah. Slides prepared by Kaye Watson. 1-3
Accounting information systems
External Internal
reporting reporting

Financial Management
accounting accounting
system system

Produces Produces budgets

financial & other reports
statements for management

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Aseervatham and D. Anandarajah. Slides prepared by Kaye Watson. 1-4
Levels within the AIS super system

Expert
system

Decision support
system

Management information
system

Transaction processing system

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Aseervatham and D. Anandarajah. Slides prepared by Kaye Watson. 1-5
Decision Making activities
• There are three basic levels of managerial
activities

1)Strategic planning activities – these activities are

primary concern of a top management (e.g. identification of
major markets and product lines)

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Aseervatham and D. Anandarajah. Slides prepared by Kaye Watson. 1-6
Decision Making activities
2)Management control activities – these activities are
primarily concern of middle management. Their aim is to
operate their segments efficiently while achieving the
objectives identified by top management

3)Operational control activities – these activities are

implemented by department heads and supervisors, the
lowest - level managers in an organization. Their aim is to
achieve those specific tasks assigned to them by middle
management

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Aseervatham and D. Anandarajah. Slides prepared by Kaye Watson. 1-7
Decision making
Strategic Management Operational
planning control control

•Trends in balance of •Accounts receivable

Structured accounts receivable balances

•Budget preparation •Production

Semistructured •Personnel scheduling
management •Cash management

•New products
•Opening a factory
Unstructured site
•Mergers and
acquisitions

© 2003 McGraw-Hill Australia Pty Ltd, PPTs t/a Accounting Information & Reporting Systems by A.
Aseervatham and D. Anandarajah. Slides prepared by Kaye Watson. 1-8
Transaction cycle interconnection
Finance cycle
(acquisition & use
of capital)

Payroll cycle (Human Resource) Expenditure cycle (expenses)

General ledger &

reporting system

Conversion cycle
(converting raw
material into finish
good)

Revenue cycle
(income)

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Aseervatham and D. Anandarajah. Slides prepared by Kaye Watson. 1-9
 Sales
function

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Aseervatham and D. Anandarajah. Slides prepared by Kaye Watson. 12-10
 Sales returns function

© 2003 McGraw-Hill Australia Pty Ltd, PPTs t/a Accounting Information & Reporting Systems by A.
Aseervatham and D. Anandarajah. Slides prepared by Kaye Watson. 12-11
 Sales Order

• Authentication
• Authorization
– Use of an Access Control List
• Accountability
• Data Transmission
• Disaster Contingency & Recovery Plan

© 2003 McGraw-Hill Australia Pty Ltd, PPTs t/a Accounting Information & Reporting Systems by A.
Aseervatham and D. Anandarajah. Slides prepared by Kaye Watson. 12-12
 Delivery Order

• Authentication
• Authorization
– Use of an Access Control List
• Accountability
• Data Transmission
• Disaster Contingency & Recovery Plan

© 2003 McGraw-Hill Australia Pty Ltd, PPTs t/a Accounting Information & Reporting Systems by A.
Aseervatham and D. Anandarajah. Slides prepared by Kaye Watson. 12-13
 Delivery Challan

• Authentication
• Authorization
– Use of an Access Control List
• Accountability
• Data Transmission
• Disaster Contingency & Recovery Plan

© 2003 McGraw-Hill Australia Pty Ltd, PPTs t/a Accounting Information & Reporting Systems by A.
Aseervatham and D. Anandarajah. Slides prepared by Kaye Watson. 12-14
 Invoice

• Authentication
• Authorization
– Use of an Access Control List
• Accountability
• Data Transmission
• Disaster Contingency & Recovery Plan

© 2003 McGraw-Hill Australia Pty Ltd, PPTs t/a Accounting Information & Reporting Systems by A.
Aseervatham and D. Anandarajah. Slides prepared by Kaye Watson. 12-15
 Receipt

• Authentication
• Authorization
– Use of an Access Control List
• Accountability
• Data Transmission
• Disaster Contingency & Recovery Plan

© 2003 McGraw-Hill Australia Pty Ltd, PPTs t/a Accounting Information & Reporting Systems by A.
Aseervatham and D. Anandarajah. Slides prepared by Kaye Watson. 12-16
 Sales Return

• Authentication
• Authorization
– Use of an Access Control List
• Accountability
• Data Transmission
• Disaster Contingency & Recovery Plan

© 2003 McGraw-Hill Australia Pty Ltd, PPTs t/a Accounting Information & Reporting Systems by A.
Aseervatham and D. Anandarajah. Slides prepared by Kaye Watson. 12-17
Flowchart
for
purchasing
function

© 2003 McGraw-Hill Australia Pty Ltd, PPTs t/a Accounting Information & Reporting Systems by A.
Aseervatham and D. Anandarajah. Slides prepared by Kaye Watson. 13-18
 Flowchart for purchase returns
function

© 2003 McGraw-Hill Australia Pty Ltd, PPTs t/a Accounting Information & Reporting Systems by A.
Aseervatham and D. Anandarajah. Slides prepared by Kaye Watson. 13-19
 Purchase Reqiuistion

© 2003 McGraw-Hill Australia Pty Ltd, PPTs t/a Accounting Information & Reporting Systems by A.
Aseervatham and D. Anandarajah. Slides prepared by Kaye Watson. 13-20
 Request for Quotation

© 2003 McGraw-Hill Australia Pty Ltd, PPTs t/a Accounting Information & Reporting Systems by A.
Aseervatham and D. Anandarajah. Slides prepared by Kaye Watson. 13-21
 Purchase Quotation

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Aseervatham and D. Anandarajah. Slides prepared by Kaye Watson. 13-22
 Approve Purchase Quotation

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Aseervatham and D. Anandarajah. Slides prepared by Kaye Watson. 13-23
 Purchase Order

© 2003 McGraw-Hill Australia Pty Ltd, PPTs t/a Accounting Information & Reporting Systems by A.
Aseervatham and D. Anandarajah. Slides prepared by Kaye Watson. 13-24
 Good Receipt Note

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Aseervatham and D. Anandarajah. Slides prepared by Kaye Watson. 13-25
 Supplier Bill

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Aseervatham and D. Anandarajah. Slides prepared by Kaye Watson. 13-26
 Payment

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Aseervatham and D. Anandarajah. Slides prepared by Kaye Watson. 13-27
 Voucher Creation

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Aseervatham and D. Anandarajah. Slides prepared by Kaye Watson. 13-28
 Cancel Purchase Document

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Aseervatham and D. Anandarajah. Slides prepared by Kaye Watson. 13-29
 Close Purchase Document

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Aseervatham and D. Anandarajah. Slides prepared by Kaye Watson. 13-30
 Purchase Return Note

© 2003 McGraw-Hill Australia Pty Ltd, PPTs t/a Accounting Information & Reporting Systems by A.
Aseervatham and D. Anandarajah. Slides prepared by Kaye Watson. 13-31
 Direct Purchase

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Aseervatham and D. Anandarajah. Slides prepared by Kaye Watson. 13-32
 Direct Purchase Return

© 2003 McGraw-Hill Australia Pty Ltd, PPTs t/a Accounting Information & Reporting Systems by A.
Aseervatham and D. Anandarajah. Slides prepared by Kaye Watson. 13-33
 Payroll processing flow chart

© 2003 McGraw-Hill Australia Pty Ltd, PPTs t/a Accounting Information & Reporting Systems by A.
Aseervatham and D. Anandarajah. Slides prepared by Kaye Watson. 14-34
 Payslip sample format

© 2003 McGraw-Hill Australia Pty Ltd, PPTs t/a Accounting Information & Reporting Systems by A.
Aseervatham and D. Anandarajah. Slides prepared by Kaye Watson. 14-35
 Production Cycle Flow chart

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Aseervatham and D. Anandarajah. Slides prepared by Kaye Watson. 15-36
 Item Formula / BOM

© 2003 McGraw-Hill Australia Pty Ltd, PPTs t/a Accounting Information & Reporting Systems by A.
Aseervatham and D. Anandarajah. Slides prepared by Kaye Watson. 15-37
 Work/Production/job Order

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Aseervatham and D. Anandarajah. Slides prepared by Kaye Watson. 15-38
 Material Requisition work order

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Aseervatham and D. Anandarajah. Slides prepared by Kaye Watson. 15-39
 Stock Transfer Note

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Aseervatham and D. Anandarajah. Slides prepared by Kaye Watson. 15-40
 Material Receipt Note

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Aseervatham and D. Anandarajah. Slides prepared by Kaye Watson. 15-41
 Material Issue Note

© 2003 McGraw-Hill Australia Pty Ltd, PPTs t/a Accounting Information & Reporting Systems by A.
Aseervatham and D. Anandarajah. Slides prepared by Kaye Watson. 15-42
 Material Req. (Add) – Work Order

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Aseervatham and D. Anandarajah. Slides prepared by Kaye Watson. 15-43
 Material Return Req.

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Aseervatham and D. Anandarajah. Slides prepared by Kaye Watson. 15-44
 Financial cycle business activities

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Aseervatham and D. Anandarajah. Slides prepared by Kaye Watson. 16-45