Basic Accounting

Information
System
Data processing

Data processing is any

computer process that
converts data into
information or
knowledge.
and its Process
Inputs
refer to the collection of raw data
evidenced by source documents, such as
invoices, receipts, contracts. etc.

Process
refers to data processing which includes the
sorting, organizing, and summarizing of data into
their respective files and categories and storing them
in their respective records.
Output
refers to the generation of financial
information and communication of the
needed information to the decision-makers.
 Methods of Processing Accounting
Information System

Manual Processing
Paper based process,
the whole process is done in
manually writing business
transactions to the journal
books and manually posting Automated or Computerized Processing
the debit and credit value of Also known as Electronic Data
the accounts from journal to Processing (EDP) or Data Processing (DP)
ledger books this uses computer technology to perform
an organizations transactions-oriented
data processing.
Manual Accounting System
Inputs
Transactions are recorded
manually in the books of
accounts

Output
Financial statements and
supporting schedules are
printed through a typewriter or
through a computer printer
manually.
Process
Manual writing in the journal
books, posting in the ledger,
extracting trial balance,
preparing worksheet for
adjustment, and closing
affected accounts.
Computerized Accounting System
Inputs
Transactions are encoded
through devices such as PC,
scanning devices, and
electronic communication
devices for electronic data
interchange

Process
Output
Computer programs and
commands (software) process The financial statements and
the conversion of raw data into schedules are viewed through
information. computer screens, print outs, and
electronic communication devices
for electronic data interchange and
e-commerce.
 Advantages and Disadvantages
Computerized Accounting System Manual Accounting System

1. Speed.

It increase the speed of

processing accounting
information
Slow pace and cumbersome

2. Preparation of reports.

Financial statements can be

prepared even after each
Financial reports are prepared at
transaction or as needed by the
periodic intervals
management.
 3. Audit trail(tugaygayan)
All records and transactions are
kept on paper and so, an
auditor has clear and
It rarely has a clear paper trail to
documented proof of what has
follow.
4. Accountability. transpired.

Difficulty in determining the identity

of a person who entered data.

Identity of a person who entered

data can easily be traced through
his handwriting.
5. Data Storage.
Both financial and non-financial Data are not stored portably, but do
voluminous data can be portably not require back-up.
stored, but requires back-up.
 6. Accuracy

As long as the encoded data are

correct, computerized
processing is more accurate.
Prone to clerical errors.
Phases of Developing AIS
AIS are developed gradually through the following stages
Planning.
This entitle determination of the scope and
objectives of the project, the definition of project
responsibilities, control requirements, projects
phases, project budgets and project deliverables.

This phase is used to both determine and document

the accounting and business processes used by the
organization.
 Data analysis
thorough review of data currently being
collected

Decision analysis
primary decisions that a manager is
responsible for identified on an
individual basis.

Process analysis
organizational processes identifying
and segmenting into a series of
events that either add or change
data.
Design
involves the detailed design of all
inputs, processing, storage and outputs
of the proposed accounting
information system.

Implementation involves two primary parts:

Construction
includes selection of
hardware, software and
vendors for the
Delivery implementation.
is the process of conducting final system and user acceptance
testing, preparing the conversion plan, installing the precaution
data base, training the users, converting all operations to the new
system.
consist of an objective to update
and maintain the AIS for business and
environmental changes.
Ways of Electronically Processing Transactions

Batch Processing.
Batches of transactions are accumulated as a transaction file

Direct Processing.

Individual Transactions are encoded

directly to build a transaction file.
The Operating System The software is perhaps the most
important part of the information
system, next to the user. The best way
to buy a computer is to first select the
software and then select the
computer. One of the basic computer
program is the operating system,
which is a set of computer programs
that is part of the software interface
between the user and the hardware.

Downsizing is linking together in networks

the collective processing power of several
personal computers to attain the capability
of a mainframe, and in the process, reduce
cost.
Operating system serves three primary functions:
Accounting and security.
The access to the computer is
controlled through the user account.

Allocation and management of system resources.

Through multiprogramming technique, this will
allow the computer to execute two or more
programs concurrently by having the CPU swap
its attention back and forth between different
programs.
Software services.
These include software libraries,
program loading and linking and
control language.
ASSIGNMENT
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