ACCT INFO SYSTEMS
ACCT INFO SYSTEMS ACCT 3122
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Arturo Hilll IV
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This 10 page Class Notes was uploaded by Arturo Hilll IV on Tuesday October 13, 2015. The Class Notes belongs to ACCT 3122 at Louisiana State University taught by Joseph Johnston in Fall. Since its upload, it has received 37 views. For similar materials see /class/223048/acct-3122-louisiana-state-university in Accounting at Louisiana State University.
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Date Created: 10/13/15
ACCT 3122 7 Exam 2 Study Guide Know all terms listed in the lecture notes Chapter 10 1 Chapter 10 7 The Revenue Cyclerecurring set of business activities and related information processing operations associated with providing goods and services to customers and collecting cash in payment for those sales a Know the activities in the Revenue Cycles i ii39 Sales order entryincludes taking the order checking credit checking inventory and responding to inquiries documents include purchase order and sales order Warehouseshippingincludes picking and packing the order and shipping the order documents include the picking ticket packaging slip bill of lading and shipping notice Billing includes invoicing and updating accounts receivable documents include sales orderpick list bill of lading invoices credit memos and monthly statement and remittance Cash collections includes the cashier handling customer remittances and depositing them in the bank documents include remittance list deposit slip copy of check and stub remittance advice and the actual check and stub b Know the documents in the Revenue Cycle P 10510ll i The documents 1 Customer list 2 Customer ordercan be received in store by mail by phone over a web site or by a salesperson in the eld externalpurchase order 3 Sales order customer order data including information about item numbers quantities prices and others terms of the sale internal 4 Backorderif there are not sufficient inventory on hand to ll the order this involves notifying production dept to produce more 5 Picking ticketlists the items and quantities of each item that the customer ordered internal 6 Packing sliplists the quantity and description of each item included in the shipment may be a copy of the picking ticket 7 Sales Invoicenoti es customers of the amount paid and where to send the payment created internally and sent to cumtomers 8 Remittance advice portion of the bill sent back to the company turnaround document 9 Credit Memoadjustments may need to be made to a customer s account for returns allowance for damaged goods or writeoffs as 1 ACCT 3122 7 Exam 2 Study Guide uncollectible this memo authorizes the crediting of the customer s account internal document 10 Monthly Statementlists all transactions including both sales and payments that occurred during the past month and informs customers of their current balances ll Remittance list all remittances that have come in that day sent to accounts receivable includes names and amounts What is the difference between each document ii Know where department each copy is created iv Know any external documents in the cycle purchase order check bill of lading c Know the control objective page 391 All transactions are properly authorized All recorded transactions are valid All valid and authorized transactions are recorded accurately All transactions are recorded accurately Assets are safeguarded from loss or theft Business activities are performed efficiently and effectively The company is in compliance with all applicable laws and regulations All disclosures are full and fair d Know the threats and the appropriate controls for each threatTable 101 P 1031012 o Incomplete or inaccurate customer order 0 Data entry controls completeness check Automatic lookup of reference data like customer address Reasonableness tests comparing quantity ordered to past history 0 Sales to customers with poor credit 0 Follow proper authorization procedures for credit sales credit limits 0 Orders that are not legitimate 0 Appropriate authorization evidences by receipt of a signed purchase order and maximum caution in online credit card transactions with retail customers 0 Stock outs carrying costs and markdown o Accurate inventory control and sales forecasting systems online inventory systems recording changes in real time periodic physical counts regular review of sales forecast to make adjustments 2 ACCT 3122 7 Exam 2 Study Guide Shipping errors 0 Online shipping systems that check quantities shipped barcode scanners and RFID tags to record picking and shipping eld check and completeness check to reduce manual errors and packing slip should not be printed until accuracy of shipment has been veri ed Theft of inventory 0 Secure inventory and restrict access document inventory transfers release inv for shipping only with approves sales orders employees who handle shipping should sign the documents or enter their codes online to ensure accountability Wireless communication and RFID tags to provide real time tracking and periodic physical counts of inv Failure to bill customers 0 Segregate shipping and billing functions pre numbered sales orders picking tickets packing slips and sales invoices Billing errors 0 Use computer to retrieve prices check quantities on packing slip against quantities on sales order and use barcode scanners to reduce data entry errors Errors in maintaining customer accounts 0 Validity check so amounts are applied to correct account closed loop verification field check to ensure payment amounts are numerical batch totals to detect posting errors compare number of accounts updated with number of checks received reconciliation by independent party monthly statements Theft of cash 0 Segregation of duties minimizing money handling prompt documentation and restrictive endorsements two people opening mail together remittance data sent to accounts receivable while cash and checks are sent to cashier checking that total credits to AR equal total debits to cash sending a copy of remittance list to internal auditing to be compared with bank statements sending monthly statements using cash registers that produce a written record of all cash received deposit all remittances daily having bank reconciliations done by an independent party ACCT 3122 7 Exam 2 Study Guide Chapter 11 11 Chapter 11 7 The Expenditure Cyclerecurring set of business activities and related information processing operations associated with the purchase and payment for goods and services a Know the 3 basic activities in the Expenditure Cycles ii Orderingidentify what when and how much to purchase creates a purchase order by selected suppliers and documenting a request Receivingaccepting deliveries from suppliers decides whether to accept delivery and veri es the quantity and quality of goods delivered Payingapprove vendor invoices for payment cashier performs the payments and segregate the custody function from the authorization function b Know the documents in the Expenditure Cycle P 112 1114 i ii iii The Documents N E 4 V39 0 7 8 Purchase Request aka Purchase Requisitiontriggered by the inv control function or by the employees noticing a shortage of materialsiit identifies the requisitioner specifies the delivery location and date needed identifies the item numbers descriptions quantities and price of each item requested and may suggest a supplier this doc is internal Purchase Orderdocument that formally requests a supplier to sell and deliver specified products at designated prices this is also a promise to pay and it becomes a contract once the supplier accepts Receiving Reportdocuments details about each delivery including the date received shipper supplier and purchase order number Voucher Package or simply Vouchercombination of a vendor invoice and supporting documentation purchase order and receiving report payment is authorized by the receipt of the voucher package Daily Voucher Listdaily voucher summaries list of vouchers approved for the day helps with reconciliation Checkpayment Check Stubproof of payment Daily Check List What is the difference between each document Know where department each copy is created ACCT 3122 7 Exam 2 Study Guide iv Know any external documents in the cycleremittance advice packing slip vendor invoice c Know the control objective pg 433 All transactions are properly authorized All recorded transactions are valid actually occurred All valid authorized transactions are recorded All transactions are recorded accurately Assets cash inventory and data are safeguarded from loss or theft Business activities are performed efficiently and effectively 3 1 Know the threats and the appropriate controls for each threat Table 111 P l l 111 16 o Stockouts andor excess inventory 0 Accurate inv control and sales forecasting use of perpetual inv method supplier perf reports recording of inv changes in real time bar coding inv and periodic physical counts 0 Ordering unnecessary items 0 Accurate perpetual inv records approval of purchase requisition 0 Purchasing goods at in ated prices 0 Price lists solicitation of bids use of approved suppliers approval of purchase orders 0 Purchasing goods of inferior quality 0 Use of approved supplier list review or purchase orders tracking of supplier performance 0 Purchasing from unauthorized suppliers 0 Review of purchase orders restriction of access to supplier list restriction on procurement card usage 0 Kickbacks o no gift policy for buyers employee training job rotation enforced vacations for purchasing agents supplier audits 0 Receiving unordered goods 0 Requiring receiving dock employees to verify existence of valid purchase order 0 Errors in counting received goods 0 Using bar codes and RF ID tag documenting employee performance incentives for accurate counts 0 Theft of inventory ACCT 3122 7 Exam 2 Study Guide 0 Physical access controls periodic counts of inv documenting all transfers of inv proper segregation of duties 0 Failure to catch invoice errors 0 Double checking invoice accuracy training of accounts payable staff 0 Paying for goods not received 0 Only paying invoices supported by original receiving report 0 Failure to take available discounts 0 Proper ling cash ow budgets o Paying the same invoice twice 0 Only paying invoices supported by original voucher package cancellation of voucher package upon payment controlling access to supplier master le 0 Recording and posting errors to accounts payable 0 Various data entry and processing edit controls periodic reconciliation of accounts payable accounts with general ledger o Misappropriation of cash checks or EFT o Restricting access to blank checks check signing machine segregation of duties of accounts payable and cashier reconciliation of bank account by independent person ACCT 3122 7 Exam 2 Study Guide Chapter 14 III Chapter 14 7 General Ledger and Reporting System The information processing operations involved in updating the general ledger and preparing reports that summarize the results of an organization s activities a Know the 4 basic activities in the General Ledger and Reporting System i Updating the Ledgerconsists of posting journal entries that originate from 2 sources 0 Accounting L J t each L J t m r etc creates a journal entry to update the general ledger The Jquot revenue various accounting subsystems usually update by means of summary journal entries that represent the results of all transactions the occurred in a given period of time Treasurer creates individual journal entries to update the general 0 ledger for nonroutine transactions Journal vouchera form that journal entries are documented on to update the general ledger ii Preparing Adjusting Entriesoriginate from the controller s of ce after the initial trial balance has been prepared Total debit balances should equal total credit balances Preparing Financial Statementsknow the order in which they are prepared Preparing Managerial Reportsthis step if for internal useit veri es the ii39 24 accuracy of the posting process and budgets for planning and evaluating performance b Know why the ledger need to be updated and what type of entries this may involve We update the general ledger in order to prepare nancial statements and real time inquiry needs This involves journal entries c Know what categories of adjusting entries ACCT 3122 7 Exam 2 Study Guide i Accrualsentries made at the end of the accounting period to re ect events that have occurred but for which cash has not yet been received or disbursed ii Deferralsentries made at the end of the accounting period to re ect the exchange of cash prior to performance of the related event iii Estimatesentries that re ect a portion of expenses that occur over a number of accounting period iv Revaluationsentries made to re ect either differences between actual and recorded value of an asset of a change in accounting principle v Correctionsentries made to counteract the effects of errors found in the general ledger d Know the order in which nancial statements are prepared i Income statement ii Statement of Equity iii Balance sheet iv Statement of Cash Flows e Be familiar with the types of managerial reports we may produce i Static budget ii Flexible budget The method used to calculate the budget standard is crucial The entity can use a fixed target and compare actual results to the static budget This method does not adjust for unforeseen changes in operating environment and may penalize a manager for factors beyond his control A solution is use of a exible budget which breaks each item into xed and variable components and adjusts the variable components for variations in sales or production iii Balanced scorecarda report that provides a multidimensional perspective on organizational performance It contains measures relating to 4 perspectives of the organization nancial customer internal operations and innovation and leaming f XBRL Know what it isa variant of XML speci cally designed for use in communicating content of financial data XBRL creates tags for each data item Tag names specify line items in financial statements Other fields in the tag provide other information such as units of measure etc What is stands for extensible business reporting language What are its advantages and disadvantages Benefits include 1 Less data input reinput ii39 ACCT 3122 7 Exam 2 Study Guide 2 Easy to adjust what data is displayed and analyzed g Know the control objective pg 539 All updates to the general ledger are properly authorized All recorded general ledger transactions are valid All valid authorized general ledger transactions are recorded All general ledger transactions are accurately recorded General ledger data are safeguarded from loss or theft General ledger system activities are performed efficiently and effectively h Know the threats and the appropriate controls for each threat Table 141 0 Errors in updating the general ledger and generating reports 0 Input edit and processing controls reconciliations and control reports maintenance of an audit trail 0 Financial statement fraud 0 Independent testing of all special journal entries to the general ledger 0 Loss alteration or unauthorized disclosure of data 0 Access controls creation of audit trail backup and disaster recovery plans encryption IV Microsoft Dynamics Great Plains a Given an example of how GP implements a control be able to identify the control Weaknesses come about when people have too much access on the system i Authentication ii Authorization iii Financial counts for batches iv Transaction counts for batches v Data entry controls b Know how GP implements the following controls i Check inventoryhas internal inv system override backorder etc ii Control sales to customers with poor creditcredit approval separation of duties iii Approval over purchase orders iv Data entry problems for receiving invoicing goodsauto receive auto invoice v Paying duplicate ghost invoices reprint is printed on duplicate invoices ACCT 3122 7 Exam 2 Study Guide V Excel a Know the following functions i MinMax Small Large Minabsolute smallest Maxabsolute largest Smallcan nd 2quotd or 3rd smallest Largecan find 2quotd or 3rd largest ii MeanMedian Sum iii CountCountif Countnumber of items present nonempty cells Countifyou can apply a condition to ex number of A s in a column iv vLookuphLookupvertical vs horizaontal b Know the pull J J39 J of U1 aui in data into a table c Know the purposeadvantagedisadvantage of a pivot table Adv of a pivot table is that you can have more complex queries and pull data more quickly Chapter 3 Know and be able to match shapes Data ow diagram graphical descriptions of the sources and destinations of data DFDs show where data comes from how it ows the processes performed on it and where it goes Program owchartdescribe the sequence of logical operations performed in a computer program System owchartdescribe the relationship between inputs processing and outputs for a system
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