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Chapter 9
Accounting Information Systems
In Summary
Explain the flow of accounting information through the accounting paper trail
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Source documents provide evidence for journal entries, which are then posted to the ledger
accounts. The values from the ledger accounts are used to create a trial balance and the
financial statements.
Describe and record transactions in special journals
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The sales journal is used to record all sales on account.
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The cash receipts journal is used to record all cash received.
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The purchases journal is used to record all purchases on account.
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The cash disbursements journal is used to record all cash paid.
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The general journal is used to record all transactions that do not fit into the other special
journals.
Describe and record transactions in subsidiary ledgers
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Subsidiary ledgers are used to track details that would clutter the general ledgers.
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All special journals are totalled at the end of the month and the totals are posted to the
general ledger accounts.
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If a transaction in the sales or cash receipts journal affects accounts receivable, the accounts
receivable subledger account for that customer will be updated immediately.
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If a transaction in the purchases or cash disbursements journal affects accounts payable, the
accounts payable subledger account for that supplier will be updated immediately.
Identify features of a computerized accounting system
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A computerized accounting system will have sections like the special journals to enter
transactions. Transactions will automatically update general and subsidiary ledgers.
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Subsidiary ledgers will keep information about suppliers and customers and can be used to
generate reports.
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