Accounting Information Systems:
A Business Process Approach
Chapter Eight: Using Accounting
Applications
1
Learning Objectives
After completing this chapter, you should
understand:
 Accounting application and modules
 Typical elements in an AIS menu
 The four processing modes
 The use of accounting packages for real-time and
batch processing
 Posting to the general ledger
 The purging of record
2
Learning Objectives (Continue)
After completing this chapter, you should be able
to:
 Identify menu option required for an application
 Identify the effect of various processing option on
events and master tables
 Identify the effect of various processing option on
reports
 Identify controls used to address risks under
various processing option
3
Exhibits: 8.5
Tables: 8.1 - 8.11
4
Exhibit 8.5 Caution when Purging
The following are excerpts from the rules concerning what is not purged when using the
purge process in Peachtree, v.6.0:

If the transaction is dated after the purge date, then it is saved.
 If the transaction is a payroll check and it is in or after the current payroll year, then
it is
saved.
 If the transaction is a purchase or sale invoice and it is not fully paid off as of the
purge
date, then it is saved.
 If the transaction is a cash receipt or cash disbursement and it is applied to a
saved invoice, then it is also saved.
 If the transaction is a sale or purchase and has related payments that have already
been
saved, then it is also saved.
Source: Peachtree Accounting Help, Copyright © 1992–1998, Peachtree Software, Inc. All rights reserved.
5
Table 8.1 Similarities between Modules and Application Menus
Master records to
maintain
Events to record
Purchasing
Module
Module
Module
Module
Supplier
Customer
Product
G/L Account
Purchase order
Receipt of goods
or services
Payment
Examples of event Daily list of
reports
purchases
Examples of status Open payables
reports
Sales
Inventory
Genera
Customer order
Inventory adjustments Journal entries
Delivery of goods
or services
Collection of cash
Daily list of sales
Adjustments report General journal
Aged accounts
receivable
Inventory stock status Trial balance
6
Table 8.2 Requirement for Event Tables for H & J Tax Preparation Service
E1
Event
Make appointment
E2
Request service
Possible
Table
Appointment
calendar
Service
Request
secretary
after the
complete.
E3
Complete tax return
accountant.
E4
Bill client
customer’s
Event Tables Used
No.
Updates to
Master Tables
No. The narrative suggests
that service request information is not entered into
the computer. The
enters information into the
computer only
service is
Service
Provided
No. Tax return tables are
stored by Mega-Tax, and
paper evidence of
completion of tax return is
given to the secretary by
the
Invoice
Yes. Service details are Narrative suggests
entered into the computer
Balance is
increased, and the
at this time, and the
invoice is prepared.
the
are
E5
Collect cash
Cash Receipt
Narrative suggests customer’s
Year-to-Date_Revenues
amount for each service
provided is updated. Thus,
Client and Service tables
updated.
Yes. The Collection_Date
Invoice#, Amount, and
Thus,
7
Balance is decreased.
Table 8.3 Sample Data for H & J Tax Preparation Service
Service Table
Service#
Service Description
Fee
Year-to-Date
_Revenues
1040
Sch-A
Sch-B
Federal Individual Income Tax Form 1040 (long form)
1040 Schedule A (itemized deductions)
1040 Schedule B (interest & dividend earnings)
$53,300
1040 Schedule C (sole proprietorship)
$84,000
State Income Tax Return
$81,000
Corporate Income Tax
$103,000
$100
$50
$120,000
$51,000
Sch-C
State
Corp
$50
$110
$80
$30 (per hr.)
Client Table
Client#
Client_Name
Address
1001
1002
1003
242 Greene St., St. Louis, MO
314-222-3333
$0
123 Walnut St., St. Louis, MO
314-541-3322
$0
565 Lakeside, St. Louis, MO
314-541-6785
Robert Barton
Donna Brown
Sue Conrad
Accountant Table
Accountant#
405-60-2234
512-50-1236
Telephone
Balance_Due
$390
Accountant_Name
Jane Smith
Michael Speer
8
Table 8.3 Sample Data for H & J Tax Preparation Service (Concluded)
Invoice Table
Invoice#
Request#
Client#
Invoice
Accountant# _Date
Amount
Status
Post
_Date
G/L_Post
_Date
305
104
1001
405-60-2234 02/13/03
$280
closed
02/13/03
02/28/03
306
106
1003
405-60-2234 02/22/03
$390
open
02/22/03
02/28/03
307
105
1002
512-50-1236 02/23/03
$180
closed
02/23/03
02/28/03
Post_Date = date that invoice information was posted to tables in the sales module (Services and Client tables); G/L_Post_Date =
date that invoice information was used to update the general ledger module; Status = “closed” if paid, “open” if not
Cash_Receipt Table
Receipt# Invoice# Collection_Date
Check#
Amount
Post_Date G/L_Post_Date
275
276
125
316
$230
$180
03/01/03
03/03/03
305
307
03/01/03
03/03/03
Invoice_Detail Table
Invoice# Service# Fee
305
305
305
306
306
306
306
306
307
307
1040
Sch-A
State
1040
Sch-A
Sch-B
Sch-C
State
1040
State
$100
$50
$80
$100
$50
$50
$110
$80
$100
$80
9
Table 8.4 Additional Data for H&J Tax Preparation Service
Information obtained about new clients:
Balance
Client#
Client Name
_Due
Address
Telephone
1004
Roger Longman
922 Carlton, St. Louis, MO
314-986-1234
1005
Jeff Parker
198 Hillside Dr., St. Louis, MO
314-689-5454
1006
Jane Kimball
461 Tucker Rd., St. Louis, MO
314-322-4554
Information about service requests recently completed:
Request# Client#
Accountant#
Invoice_Date
Amount
107
109
108
Request#
1004
1006
1005
Service#
512-50-1236
405-60-2234
512-50-1236
Fee
107
107
107
107
109
109
108
108
1040
Sch-A
Sch-B
State
1040
State
1040
State
$100
$50
$50
$80
$100
$80
$100
$80
03/03/03
03/03/03
03/03/03
$0
$0
$0
$280
$180
$180
10
Table 8.5 Effect of Recording Invoice# 308—Real-Time System
Service Table
Service#
Service_Description
Fee
Year-to-Date
_Revenues
1040
Sch-A
Sch-B
Federal Individual Income Tax Form 1040 (long form)
1040 Schedule A (itemized deductions)
1040 Schedule B (interest & dividend earnings)
$53,350
1040 Schedule C (sole proprietorship)
$84,000
State Income Tax Return
$81,080
Corporate Income Tax
$103,000
$100
$50
$120,100
$51,050
Sch-C
State
Corp
$50
$110
$80
$30 (per hr.)
Client Table
Client#
Client_Name
Address
1001
1002
1003
242 Greene St., St. Louis, MO
314-222-3333
$0
123 Walnut St., St. Louis, MO
314-541-3322
$180
565 Lakeside, St. Louis, MO
314-541-6785
1004
Robert Barton
Donna Brown
Sue Conrad
$390
Roger Longman
Accountant Table
Accountant#
405-60-2234
922 Carlton, St. Louis, MO
Accountant_Name
Jane Smith
Telephone
314-986-1234
Balance_Due
$280
11
Table 8.5 Effect of Recording Invoice# 308—Real-Time System (Continued)
Invoice Table
Invoice#
Request#
Client#
Invoice
Accountant# _Date
Amount
Status
Post
_Date
G/L_Post
_Date
305
104
1001
405-60-2234 02/13/03
$280
closed
02/13/03
02/28/03
306
106
1003
405-60-2234 02/22/03
$390
open
02/22/03
02/28/03
307
105
1002
512-50-1236 02/23/03
$180
closed
02/23/03
02/28/03
308
107
1004
512-50-1236 03/03/03
$280
open
03/03/03
Post_Date = date that invoice information was posted to tables in the sales module (Services and Client tables); G/L_Post_Date =
date that invoice information was used to update the general ledger module; Status = “open” if not paid, “closed” if paid
Invoice_Detail Table
Invoice# Service# Fee
305
305
305
306
306
306
306
306
307
307
308
308
308
308
1040
Sch-A
State
1040
Sch-A
Sch-B
Sch-C
State
1040
State
1040
Sch-A
Sch-B
State
$100
$50
$80
$100
$50
$50
$110
$80
$100
$80
$100
$50
$50
$80
12
Table 8.5 Effect of Recording Invoice# 308—Real-Time System (Concluded)
Cash_Receipt Table
Receipt# Invoice# Collection_Date
Check#
Amount
Post_Date G/L_Post_Date
275
276
305
307
03/01/03
03/03/03
125
316
$230
$180
03/01/03
03/03/03
Recording and posting Invoice# 308 caused three changes to tables in the sales module.
1. File maintenance: Because this is an event for a new customer, a record has been added to the Client
Table for Roger Longman.
2. Event recording: One record was added to the Invoice Table (#308) and four records to Invoice_Detail
Table. Invoice table now shows the posting date (PostDt)
3. Master file update: Year-to-Date_Revenues (in the Service Table) for the four services used per
Invoice# 308 increased by $100, $50, $50, and $80.
13
Table 8.6 Invoice Table—Before Batch Recording
Invoice#
Request#
Client#
Invoice
Accountant# _Date
Amount
Status
Batch#
Post
_Date
G/L_Post
_Date
305
104
1001
405-60-2234 02/13/03
$280
closed
1070
02/13/03
02/28/03
306
106
1003
405-60-2234 02/22/03
$390
open
1071
02/22/03
02/28/03
307
105
1002
512-50-1236 02/23/03
$180
closed
1072
02/23/03
02/28/03
Post_Date = date that invoice information was posted to tables in the sales module (Services and Client tables); G/L_Post_Date =
date that invoice information was used to update the general ledger module; Status = “open” if not yet paid, “closed” if paid
14
Table 8.7.A Invoice Table—After Batch Recording
Invoice#
Request#
Client#
Accountant# _Date
Invoice
Amount
Status
Batch#
Post
_Date
G/L_Post
_Date
305
104
1001
405-60-2234 02/13/03
$280
closed
1070
02/13/03
02/28/03
306
106
1003
405-60-2234 02/22/03
$390
open
1071
02/22/03
02/28/03
307
105
1002
512-50-1236 02/23/03
$180
closed
1072
02/23/03
02/28/03
308
107
1004
512-50-1236 03/03/03
$280
open
1073
309
109
1006
405-60-2234 03/03/03
$180
open
1073
310
108
1005
512-50-1236 03/03/03
$180
open
1073
15
Table 8.7.B Invoice_Detail Table—After Batch Recording
Invoice#
305
305
305
305
306
306
306
306
306
307
307
308
308
308
308
309
309
310
310
Service#
1040
Sch-A
Sch-B
State
1040
Sch-A
Sch-B
Sch-C
State
1040
State
1040
Sch-A
Sch-B
State
1040
State
1040
State
Fee
$100
$50
$50
$80
$100
$50
$50
$110
$80
$100
$80
$100
$50
$50
$80
$100
$80
$100
$80
16
Table 8.8 Batch Recording: Tables After Posting Batch# 1073
(Compare to Table 8.3 which shows the tables before posting.)
Service Table
Service#
Service_Description
Fee
Year-to-Date
_Revenues
1040
Sch-A
Sch-B
Federal Individual Income Tax Form 1040 (long form)
1040 Schedule A (itemized deductions)
1040 Schedule B (interest & dividend earnings)
$53,350
1040 Schedule C (sole proprietorship)
$84,000
State Income Tax Return
$81,240
Corporate Income Tax
$103,000
$100
$50
$120,300
$51,050
Sch-C
State
Corp
$50
$110
$80
$30 (per hr.)
Client Table
Client#
Client_Name
Address
1001
1002
1003
1004
1005
1006
242 Greene St., St. Louis, MO
314-222-3333
$0
123 Walnut St., St. Louis, MO
314-541-3322
$180
565 Lakeside, St. Louis, MO
314-541-6785
922 Carlton, St. Louis, MO
314-986-1234
$280
198 Hillside Dr., St. Louis, MO
314-689-5454
$180
461 Tucker Rd., St. Louis, MO
314-322-4554
$180
Robert Barton
Donna Brown
Sue Conrad
Roger Longman
Jeff Parker
Jane Kimball
Telephone
Balance_Due
$390
17
Table 8.8 Batch Recording: Tables After Posting Batch# 1073
Invoice Table
Invoice#
Request#
Client#
Invoice
Accountant# _Date
Amount
Status
Batch#
Post
_Date
G/L_Post
_Date
305
104
1001
405-60-2234 02/13/03
$280
closed
1070
02/13/03
02/28/03
306
106
1003
405-60-2234 02/22/03
$390
open
1071
02/22/03
02/28/03
307
105
1002
512-50-1236 02/23/03
$180
closed
1072
02/23/03
02/28/03
308
107
1004
512-50-1236 03/03/03
$280
open
1073
03/03/03
309
109
1006
405-60-2234 03/03/03
$180
open
1073
03/03/03
310
108
1005
512-50-1236 03/03/03
$180
open
1073
03/03/03
The Invoice_Detail and Cash_Receipt tables are not shown here because the records were unchanged by the process of posting
the purchase invoices.
18
Table 8.9 Immediate and Batch Recording Configurations
Immediate Recording
Batch
Recording
Real-time
Data entry: Are event data recorded in an event Yes
table as soon as an event occurs?
Edit: Are data edited at the time of data entry?
Yes
Edit report: Is an edit report required before posting?
Yes
Update: Are summary fields in resource or agent Yes
records updated close to the time when the event
occurred?
Status report: Are events included in resource or Yes
agent status reports close to the time when they
occurred?
Batch Update
On-line Off-line
Yes
No
No
Yes
No
Yes
No
No
No
No
No
No
Yes
No
Yes
19
Table 8.10 Invoice Table
Invoice#
Request#
Client#
Accountant#
Invoice
_Date
Amount
Status
Post
Batch#
G/L_Post
_Date
305
104
1001
405-60-2234 02/13/03
$280
closed
1070
02/13/03
02/28/03
306
106
1003
405-60-2234 02/22/03
$390
open
1071
02/22/03
02/28/03
307
105
1002
512-50-1236 02/23/03
$180
closed
1072
02/23/03
02/28/03
308
107
1004
512-50-1236 03/03/03
$280
open
1073
03/03/03
309
109
1006
405-60-2234 03/03/03
$180
open
1073
03/03/03
310
108
1005
512-50-1236 03/03/03
$180
open
1073
03/03/03
20
Table 8.11 Recording and Updating Alternatives—Modules and General Ledger
Process
Recording
Event
Update
Module*
Update
General Ledger
Real-time
Real-time
Batch update
Batch recording
I
I
I
B
I
I
B
B
I
B
B
B
I = immediate (as soon as the event occurs), B = batch
*Update of the module where the event was initially recorded
21