subsidiary journals - Operation of an Accounting System...

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Operation of an Accounting System Converting data into information Business transactions Reports Interested parties Source documents Journals Ledgers
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Manual Accounting Systems —Subsidiary Ledgers Control accounts and subsidiary ledgers Summary information Control account Detailed information Subsidiary ledger Accounts receivable Accounts payable Inventory
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Basic Concepts of Accounting Information Systems Principles of accounting information systems Developing an accounting system Manual vs. computerized systems Subsidiary Ledgers Example Advantages Special Journals Sales journal Cash receipts journal Purchases journal Cash payments journal Effects of special journals on general journal Accounting Information Systems
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An accounting information system involves collecting and processing data and disseminating financial information to interested parties. An AIS may either be manual or computerized. ACCOUNTING INFORMATION SYSTEMS
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PRINCIPLES OF AN EFFICIENT AND EFFECTIVE ACCOUNTING INFORMATION SYSTEM Costs Benefits The accounting system must be cost effective . Benefits of information must outweigh the cost of providing it.
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PRINCIPLES OF AN EFFICIENT AND EFFECTIVE ACCOUNTING INFORMATION SYSTEM It must be relevant! It must be reliable! It must be accurate! It must be timely! Balance Sheet Income Statement Other Financial Reports
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In a manual accounting system, each of the steps in the accounting cycle is performed by hand. This means that transactions are entered into a journal and then posted to the ledger. Financial statements are thus derived from many manual computations from ledger balances. So. ....why study manual systems if the real world uses computerized systems? MANUAL ACCOUNTING SYSTEMS
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Small businesses still abound and most of them begin operations with manual accounting systems and convert to computerized systems as business grows. To understand what computerized accounting systems do, one must understand how manual accounting systems work. MANUAL VS. COMPUTERIZED SYSTEMS
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A subsidiary ledger is a group of accounts with a common characteristic, such as accounts receivable. The subsidiary ledger is assembled together to facilitate the recording process by freeing the general ledger from details concerning individual balances. Two common subsidiary ledgers are the Accounts Receivable Ledger and the Accounts Payable Ledger. SUBSIDIARY LEDGERS
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General Ledger Accounts Receivable Control Date Debit Credit Balance Nov 1 6500 Nov 30 5500 11000 Nov 30 6900 4700 Subsidiary Ledger P. Able Date Debit Credit Balance Nov 1 3200 Nov 8 1800 5000 Nov 16 3200 1800 Subsidiary Ledger R. Baker Date Debit Credit Balance Nov 1 1100 Nov 3 1100 - Nov 20 2400
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This note was uploaded on 02/28/2011 for the course ACCT 3366 taught by Professor Harris during the Spring '11 term at University of Houston.

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subsidiary journals - Operation of an Accounting System...

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