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INTRODUCTION TO TRANSACTION PROCESSING.pptx
- 1. INTRODUCTION TO TRANSACTION PROCESSING IT101 – ACCOUNTING INFORMATION SYSTEM
- 2. LEARNING OBJECTIVES Identify the broadobjectives of transaction cycles. Recognize the types of transactions processed by each of the three transaction cycles. Identify the basic accounting records used in TPS. Distinguish the relationship between the traditional accounting records and their magnetic equivalents. Enumerate the documentation techniques. Distinguish the differences between batch and real-time processing and the impact of these technologies on transaction processing. Enumerate data coding schemes used in AIS.
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- 4. GOAL OF TRANSACTIONPROCESSING SYSTEM (TPS) process financial transactions. What does financial transactions mean? (previous lecture) Financial transactions are common business events that occur regularly.
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- 11. ACCOUNTING RECORDS (pgs.49-54) Journals Special Journal General Journal Ledgers General Ledger Subsidiary Ledger
- 13. The accounting recordsdescribed previously provide an audit trail for tracing transactions from source documents to the financial statements.
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- 15. Aspect Traditional AccountingRecords Magnetic (Electronic) Equivalents Format Paper-based (manual journals, ledgers, balance sheets, etc.) Digital (stored in databases, spreadsheets, accounting software) Data Storage & Accessibility Physical storage (filing cabinets, shelves) Digital storage (cloud, hard drives, servers) Processing of Data Manual entry, calculations, and postings Automated data entry, calculations, and postings Accuracy & Error Minimization Prone to human error (miscalculations, omissions) Automated checks and error detection reduce human error Security Vulnerable to physical damage (fire, theft, water) Digital encryption, backups, and access control for security Cost & Resources Requires paper, storage space, labor for filing and retrieval Lower long-term costs, reduced need for physical storage Compliance & Auditing Time-consuming audits, harder to maintain compliance Easier tracking, reporting, and audit trails for compliance Updates & Modifications Manual corrections, cross-referencing errors Easy modification, audit trails of changes Integration & Scalability Difficult to integrate with other systems, hard to scale Easy integration with other systems, scalable as business grows Real-time Data & Reporting Periodic reporting (e.g., quarterly, annually) Real-time data access and instant reporting
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- 17. DOCUMENTATION TECHNIQUES The old sayingthat a picture is worth a thousand words is extremely applicable when it comes to documenting systems. A written description of a system can be wordy and difficult to follow. Experience has shown that a visual image can convey vital system information more effectively and efficiently than words. As both systems designers and auditors, accountants use system documentation routinely. The ability to document systems in graphic form is thus an important skill for accountants to master.
- 18. 4 BASIC DOCUMENTATION TECHNIQUES DATA FLOWDIAGRAMS ENTITY RELATIONSHIP DIAGRAMS FLOWCHARTS RECORD LAYOUT DIAGRAMS
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- 22. RECORD LAYOUT DIAGRAM a visual representationshowing the structure and organization of data within a digital file or database record
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- 26. DATA CODING SCHEMES SEQUENTIALCODES BLOCK CODES GROUP CODES MNEMONIC CODES ALPHANUMERIC CODES
- 27. DATA CODING SCHEMES • Description:Assigns a unique number to each item in a sequence, like consecutive invoices or checks. • Purpose: Ensures each item is unique and simplifies processing. • Example: 0001, 0002, 0003 for a series of invoices. Sequential Codes • Description: Divides items into classes, assigning a specific range of numbers to each class. • Purpose: Allows users to identify the type of item by looking at the code's beginning digits, as seen in a Chart of Accounts. • Example: 100-199 for assets, 200-299 for liabilities, with unused codes left for future accounts. Block Codes
- 28. • Description: Usesparts of the code to represent different attributes of an item. • Purpose: Provides detailed information about complex items within a single code. • Example: A code for a product might use the first few digits for product type, the next for size, and the last for color. Group Codes • Description: Uses letters, numbers, and symbols that are easily recognizable, often with acronyms. • Purpose: Helps users remember codes by linking them to an item's characteristics. • Example: 'DEP' for deposit or 'L' for liability account. Mnemonic Codes DATA CODING SCHEMES
- 29. DATA CODING SCHEMES • Description:Combines letters and numbers to represent items or categories. • Purpose: Offers a wide range of codes, allowing for more detailed classification than purely numeric systems. • Example: A customer ID like "C103-B2" could denote customer type and location. Alphanumeric Codes DATA CODING SCHEMES
- 30. LEARNING OBJECTIVES Identify the broadobjectives of transaction cycles. Recognize the types of transactions processed by each of the three transaction cycles. Identify the basic accounting records used in TPS. Distinguish the relationship between the traditional accounting records and their magnetic equivalents. Enumerate the documentation techniques. Distinguish the differences between batch and real-time processing and the impact of these technologies on transaction processing. Enumerate data coding schemes used in AIS.
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