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Chapter 2 Accounting Information System

This document provides an overview of accounting concepts including data input, storage, coding techniques, journals, audit trails, and enterprise resource planning (ERP) systems. It discusses how accounting information is stored in general and subsidiary ledgers using coding techniques like sequence and block codes. It also outlines the advantages of ERP systems in providing integrated views of data and financial situations across organizations as well as potential disadvantages like high costs, time requirements, and change resistance.

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Fariz Al Abqariy
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130 views2 pages

Chapter 2 Accounting Information System

This document provides an overview of accounting concepts including data input, storage, coding techniques, journals, audit trails, and enterprise resource planning (ERP) systems. It discusses how accounting information is stored in general and subsidiary ledgers using coding techniques like sequence and block codes. It also outlines the advantages of ERP systems in providing integrated views of data and financial situations across organizations as well as potential disadvantages like high costs, time requirements, and change resistance.

Uploaded by

Fariz Al Abqariy
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Name : Fariz Al Abqariy

NPM : 2211031104

Major : Accounting

CHAPTER 2 RESUME

For every organization, users and accountant play major roles in data processing about how data
should be process and stored or how they access the data. When a user stored information, it is
called by Data Input and it is about recording information while making sure its accuracy.
Making it secure repository to store these valuable data, ensuring it's accessible yet protected is
called by Storing Data.

In accounting, the accumulated accounting information is stored in General Ledger and


Subsidiary Ledger, that contains summarized data for each assets. People have been using
certain code to classify each account from each asset, classifying each account with code is
called by Coding Technique.

There are 2 way in Coding:

1. Sequence Codes: In sequence codes, items are assigned consecutive numbers to record all
items. Missing items result in gaps in the numerical sequence. Examples include pre-
numbered checks, invoices, and purchase orders.
2. Block Codes: In block codes, ranges of numbers are reserved for specific categories of
data. For instance, a company might reserve particular ranges of numbers for major
product categories.

Below is the example of Sequence Code technique:

Each Account has its own code, and it is so many that the collection of those account turn into a
list of data, and that list of data called by Chart of Account, or in other mean it is a list that
contain all accounts that has been coded, the same code that it been used universally. And
basically this chart is the collection of universal code of every accounts exist. While the account
that specifically used by a company will determine their code for their own account.

Another term is Journals, a step before data entered into ledger. There are 2 types of Journal,
one is General Journal that record frequent and routine transactions, while other is Specialized
Journal that records infrequent and non-routine transactions.

And then there is Audit trail, a path of transaction through data processing system from
beginning to the final, and it is traceable that it is possible to track it backward from the final to
beginning.

And finally the processing system in AIS is using what its called by Enterprise Resource
Planning system. And it is overcoming certain problems by integrating company’s operation
with traditional AIS

Below is ERPs advantage and disadvantage:

Advantage:

1. An ERP provides an integrated, enterprise-wide, single view of the organization’s data


and financial situation.
2. Data input is captured or keyed once, rather than multiple times, as it is entered into
different systems
3. Management gains greater visibility into every area of the enterprise and greater
monitoring capabilities
4. The organization gains better access control.
5. Procedures and reports are standardized across business units.
6. Customer service improves.
7. Manufacturing plants receive new orders in real time.

Disadvantage:

1. Bigger cost.
2. Need more time
3. Changes to business processes
4. Complexity cause need a lot different process, rules in activities
5. Resistance, organization that have multiple department with separate mission, profit-loss
may believe that single system have a few benefits.

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