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Chapter 2 INTRODUCTION TO TRANSACTION PROCESSING

This document provides an introduction to transaction processing systems. It discusses the key components of manual and computer-based accounting systems, including source documents, journals, ledgers, and the audit trail. It also describes common computer files like master, transaction, and reference files. Documentation techniques for computer-based systems are outlined, along with database backup procedures and different data coding schemes used to efficiently store information.

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Xela Mae Bigornia
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65 views14 pages

Chapter 2 INTRODUCTION TO TRANSACTION PROCESSING

This document provides an introduction to transaction processing systems. It discusses the key components of manual and computer-based accounting systems, including source documents, journals, ledgers, and the audit trail. It also describes common computer files like master, transaction, and reference files. Documentation techniques for computer-based systems are outlined, along with database backup procedures and different data coding schemes used to efficiently store information.

Uploaded by

Xela Mae Bigornia
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPTX, PDF, TXT or read online on Scribd
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INTRODUCTIO

N TO
TRANSACTION
PROCESSING
Transactions

FINANCIAL

NON-FINANCIAL

INFORMATION SYSTEM

DECISION MAKING INFORMATIO


N
Transactions

FINANCIAL
An economic event that affects the assets and
equities of the firm, is reflected in its accounts,
and is measured in monetary terms.

Expenditure Cycle Conversion Cycle Revenue Cycle


Relationships between transaction cycles
MANUAL SYSTEM ACCOUNTING RECORDS

SOURCE DOCUMENTS
Used to capture and formalize transaction data needed for transaction
processing

PRODUCT DOCUMENTS
The result of transaction processing

TURNAROUND DOCUMENTS
A product document of one system that becomes a source document for
another system
MANUAL SYSTEM ACCOUNTING RECORDS
JOURNALS
A record of chronological entry
 Special journals - specific classes of transactions that occur in high
frequency
 General journal - nonrecurring, infrequent, and dissimilar transactions

LEDGER
A book of financial accounts
 General ledger - shows activity for each account listed on the chart of
accounts
 Subsidiary ledger - shows activity by detail for each account type
THE AUDIT TRAIL

Source General Financial


Journal Statements
Document Ledger

Financial General Source


Journal
Statements Ledger Document
COMPUTER-BASED SYSTEMS
 The audit trail is less observable in computer-based
systems than traditional manual systems.

 The data entry and computer programs are the


physical trail.

 The data are stored in magnetic files.


COMPUTER FILES
 Master File - generally contains account data (e.g.,
general ledger and subsidiary file)
 Transaction File - a temporary file containing
transactions since the last update
 Reference File - contains relatively constant
information used in processing (e.g., tax tables,
customer addresses)
 Archive File - contains past transactions for
reference purposes
DOCUMENTATION TECHNIQUES
 Documentation in a CB environment is necessary
for many reasons.

 Five common documentation techniques:


 Entity Relationship Diagram
 Data Flow Diagrams
 System Flowcharts
 Program Flowcharts
 Record Layout Diagram
COMPUTER-BASED ACCOUNTING SYSTEMS

Batch System Real-time System


DATABASE BACKUP PROCEDURES
 Destructive updates leave no backup.
 To preserve adequate records, backup procedures must be implemented, as
shown below:
 The master file being updated is copied as a backup.
 A recovery program uses the backup to create a pre-update version of the
master file.
DATA CODING SCHEMES
 Concisely represent large amounts of complex information that
would otherwise be unmanageable

 Provide a means of accountability over the completeness of the


transactions processed

 Identify unique transactions and accounts within a file

 Support the audit function by providing an effective audit trail


NUMERIC AND ALPHABETIC CODING
SCHEMES

1. Sequential Codes
2. Block Codes
3. Group Codes
4. Alphabetic Codes
5. Mnemonic Codes

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