Ledgers and Journals

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Author:
Lea_
ID:
310167
Filename:
Ledgers and Journals
Updated:
2015-10-23 20:14:10
Tags:
ACC110
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Ledgers and Journals
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  1. Accounting Information Systems (AIS)
    Input

    Processing

    Output
  2. Effective AIS
    Cost effectiveness

    Useful output

    Flexibility
  3. Advantages of Subsidiary Ledgers
    Show transactions in a single account providing up to date information.

    Free the general ledger of excessive details.

    Provide effective control.

    Provide for segregation of duties.
  4. Special Journals
    Significantly reduce the number of transactions that require recording in the general journal.

    Each transaction can only be recorded in one journal.

    • Sales
    • Cash Receipts
    • Purchases
    • Cash Payments
    • Sales/Purchases Returns and Allowances
  5. Sales Journal
    Record sales of inventory on account (credit sales only)

    Cash sales recorded in cash receipts journal.

    • Dr Accounts Receivable
    • Cr Sales

    • Dr Cost of Sales
    • Cr Inventory
  6. Purchase Journal
    Used to record purchases of inventory on account (Credit purchases only).

    Cash purchases recorded in the cash payments journal.

    • Dr Inventory
    • Cr Accounts Payable
  7. Advantages of Automatic AIS
    Ability to process large number of transactions quickly.

    Automatic posting of transactions.

    Error reduction.

    Fast response time.

    Flexible and fast report production.
  8. Disadvantages of Automated AIS
    Use of inappropriate and/or incompatible software and hardware.

    Need for reliable back-up procedures

    Lack of computer system skills

    Computer viruses and hackers

    Fraud and embezzlement

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