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Module-3-Computer-Based-Transactions-Processing.pptx

The document outlines the objectives and functions of various accounting transaction processing cycles, including the expenditure, revenue, conversion, and general ledger cycles. It details the key objectives and functions associated with each cycle, such as ensuring timely recording of transactions, managing inventory, and preparing financial reports. Additionally, it describes the types of transactions and the structure of the general ledger.

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carelroman04
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3 views

Module-3-Computer-Based-Transactions-Processing.pptx

The document outlines the objectives and functions of various accounting transaction processing cycles, including the expenditure, revenue, conversion, and general ledger cycles. It details the key objectives and functions associated with each cycle, such as ensuring timely recording of transactions, managing inventory, and preparing financial reports. Additionally, it describes the types of transactions and the structure of the general ledger.

Uploaded by

carelroman04
Copyright
© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
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COMPUTER-BASED TRANSACTION

PROCESSING
Accounting Transactions Processing Cycles:
Objectives and Functions
MODULE 3

Proud to be RTUian
Transaction Processing Cycles
Objectives and Functions

Proud to be RTUian
Types of Transactions or Data Sources
1. Routine external transactions
2. Routine internal transactions
3. Non-routine transactions

Proud to be RTUian
The Four Main Accounting Transaction Cycles
1. Expenditure cycle
2. Revenue cycle
3. Conversion cycle
4. General ledger or financial
reporting cycle

Proud to be RTUian
Objectives of the Expenditure Cycle
1. To ensure that all goods and
services are ordered as needed.
2. To receive all ordered goods and
verify that they are in good
condition.
3. To safeguard goods until needed.
4. To determine that invoices
pertaining to goods and services
are valid and correct.
Accounting Information Systems
Objectives of the Expenditure Cycle
5. To record and classify the
expenditures promptly and accurately.
6. To post obligations and cash
disbursements to proper suppliers’
accounts in the accounts payable
ledger.
7. To ensure that all cash disbursements
are related to authorized expenditure.
8. To record and classify cash
disbursements promptly and
accurately. Accounting Information Systems
Functions of the Expenditure Cycle

1. Recognize the need for


goods and services.
2. Place an order for goods
and services.
3. Receive and store goods
or accept services.
4. Ascertain validity of the
payment obligation.
Accounting Information Systems
Functions of the Expenditure Cycle

5. Prepare the cash


disbursement.
6. Maintain Accounts
Payable.
7. Post transactions to the
general ledger.
8. Prepare needed
financial reports and
other outputs. Accounting Information Systems
Other Related Functions of the
Expenditure Cycle
1. Handling purchase returns
and allowances.
2. Disbursing cash for other
purposes.
3. Processing petty cash
disbursements.
Accounting Information Systems
Objectives of the Revenue Cycle
1. To record all sales orders
promptly and accurately.
2. Verify that the customers are
worthy of credit.
3. Ship the products or perform the
services by agreed dates.
4. Bill for products and services in a
timely and accurate manner.
Accounting Information Systems
Objectives of the Revenue Cycle
5. Record and classify cash
receipts promptly and
accurately.
6. Post sales and cash receipts
to proper customers’
accounts in the accounts
receivable ledger.
7. Safeguard products and cash
until shipped or deposited. Accounting Information Systems
Functions of the Revenue Cycle
1. Obtain order from customer.
2. Check credit.
3. Enter sales order.
4. Assemble goods for shipment.
5. Ship ordered goods.

Accounting Information Systems


Functions of the Revenue Cycle
6. Bill customer.
7. Receive and deposit cash
payment.
8. Maintain accounts receivable.
9. Post transactions to general
ledger.
10.Prepare needed financial
reports and other outputs. Accounting Information Systems
Other Related Functions of the Revenue
Cycle
1. Handling sales returns and
allowance.
2. Collecting delinquent
accounts.
3. Processing back orders.

Accounting Information Systems


Objectives of the Conversion Cycle
To ensure that:
1. Adequate raw materials and other
resources are available for
production, the investment for such
resources is minimized.
2. Production costs are minimized
through high labor productivity, full
utilization of production equipment,
low levels of scrap and rework, and
optimal design of production layouts
and procedures. Accounting Information Systems
Objectives of the Conversion Cycle
To ensure that:
3. Work-in-progress inventories are
transformed into finished goods,
which are warehoused or shipped on
schedule
4. Established level of product quality
and after-sales service are attained
5. Costs for each order or process are
accumulated fully and accurately.
Accounting Information Systems
Functions of the Conversion Cycle
1. Undertake strategic
production planning.
2. Obtain and manage the raw
materials inventory.
3. Initiate the production
process.
4. Maintain and control
production operations.
Accounting Information Systems
Functions of the Conversion Cycle

5. Maintain work-in-progress
cost records.
6. Complete and transfer
finished goods.
7. Prepare financial reports
and other outputs.
Accounting Information Systems
Other Related Functions of the
Conversion Cycle

1. Quality control
2. Re-work
3. Scrap
4.Excess materials

Accounting Information Systems


Objectives of the General Ledger System
1. To record all accounting
transactions promptly and
accurately.
2. To post these transactions
to the proper accounts.
3. To maintain an equality of
debit and credit balances
among the accounts.
Accounting Information Systems
Objectives of the General Ledger System
4. To accommodate needed
adjusting journal entries.
5. To generate reliable and
timely financial reports
pertaining to each
accounting period.

Accounting Information Systems


Functions of the General Ledger System
1. Collect transaction data.
2. Classify and code transaction
data and accounts.
3. Validate collected transactions
4. Update general ledger
.accounts and transaction files
5. Record adjustments to
accounts.
6. Prepare financial reports. Accounting Information Systems
General Ledger Structure

Proud to be RTUian
Chart of Accounts

- A coded listing of the accounts:


 assets
 liabilities*
 capital*
 revenue
 expenses
* Equity accounts
Proud to be RTUian
Types of transactions posted to the GL
1.Adjusting entries
a. Accruals
b. Deferrals
c. Revaluations
d. Corrections (see #4)
2.Reversing entries
3.Closing entries
4.Entries recorded at source (from the
different transaction cycles)
Proud to be RTUian

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