Transaction Processing in the AIS

Accounting

Identifying, measuring and communicating

Informed Judgements and Decisions

Bookkeeping

Identifying and measuring

part of accounting

balance sheet

point in time

income statement

period of time

changes in equity

period of time

cash flows

cash only; period of time

sequencial

numbers in order

checks, invoices purchase orders

block

charts of accounts; 1=current assets, 2=long term assets, etc

hierarchical

related to block encoding, but with more numbers; more complex

mnemonic

memory aid; texting language or short hand.

throughout fiscal year

Obtain, analyze, and record entries to post to ledger and prepare a trial balance

Identify recordable transactions

measure dollar amounts

Record transactions in the AIS

prepare financial statements

End of the year

adjusting entries, adjusted trial balance, financial statements, closing entries and post closing trial balance

Adjusting entries

accurals

service first cash second

deferrals

cash first service second

estimates

depreciation and bad debt

closing entries

balances to retained earnings

items on income statement; nominal accounts

authorization and permissions

audits

IT controls

numbering of source documents

transaction liimits

recognize transaction and record them correctly

make estimates

design source documents

essential in accounting cycle

IT

assist in posting and utilizing human judgement