an agreement between two entities to exchange goods or services
business or transactional processing
system which captures transactions and outputs financial statements
Transactional Processing Outline
1. Revenue cycle 2. Expenditure cycle 3. Production cycle 4. Human resources/Payroll cycle 5. Financing cycle
goods and services sold for cash or promise
purchase inventory for resale or production of products for cash or promise
raw materials transformed into finished goods
human resources/ payroll cycle
"employees are hired, trained, compensated, evaluated, promoted, and terminated."
"companies sell shares to investors, borrow money, investors are paid dividends, interests paid on loans"
General ledger and reporting system
show how transaction processes relate and interface and collects info from each for management and external parties
data processing cycle
operations performed on data to generate meaningful and relevant information
records of company data sent to external party and returned as input (ex. utility bill that is returned to the company with payment)
source data automation
devices that capture transaction data in machine-readable form at the time and place of origin
"summary-level data for every asset, liability, equity, revenue, and expense account"
all detailed data for any general ledger account that has many individual subaccounts
general ledger account corresponding to a subsidiary ledger
Systematic assignment of numbers or letters to items to classify and organize them
items are numbered consecutively to ensure there will be no gaps in the sequence
blocks of number within a numerical sequence are reserved for categories having meaning to the user
Used in conjunction with block code - two or more subgroups of digits are used to code the item
chart of accounts
list of all general ledger accounts an organization uses
used to record infrequent or non routine transactions
"used to record repetitive transitions: credit sales. cash receipts, etc"
the posting of reference and document numbers
characteristics of interest
something about which information is stored
physical space a data value is stored
set of fields containing data about various attributes of the same entity
content of a field
related records are grouped
store cumulative information about an origination's resources and the agents whom it interacts - permament
contain records for individual business transactions that occur during a specific fiscal period
"set of interrelated, centrally coordinated files"
periodic updating of data
online real-time processing
update data as transaction occurs
Enterprise resource planning (ERP) system
designed to overcome problems as they relate to aspects of a company's operations within its traditional AIS
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