in a transaction processing system quizlet

In the latter case, the transaction forms record information in a predetermined set of accounts (which can be overridden). This is done either with a journal entry or an on-line standard transaction form (such as is used to record cash receipts against open accounts receivable). Record the TransactionĮnter the transaction in the accounting system. Identify which accounts are to be used to record the transaction. Identify the Relevant AccountsĮvery business transaction is recorded in an account in the accounting database, such as a revenue, expense, asset, liability, or stockholders' equity account. There is frequently a business document to be prepared or recognized to initiate the transaction, such as an invoice to a customer or an invoice from a supplier. Examples are buying goods from suppliers, selling products to customers, paying employees, and recording the receipt of cash from customers. Identify the Transactionįirst, determine what kind of transaction it may be. The steps required for individual transactions in the accounting process are noted below. If a reversing flag was not set, an entry must be reversed manually, using a new journal entry. Nonetheless, examine the accounts at the beginning of the period to verify the reversals. These transactions are usually flagged as being reversing entries in the accounting software, so the reversal should be automatic. Doing so ensures that transactions are not recorded twice in the current period. Verify that all transactions designated as reversing entries in preceding periods have actually been reversed. We will address these three parts of the accounting process below. The third group is the period-end processing required to close the books and produce financial statements. The second group is comprised of the steps needed to record individual business transactions in the accounting records. The first transaction type is to ensure that reversing entries from the previous period have, in fact, been reversed. This information is then aggregated into financial statements. The accounting process is three separate types of transactions used to record business transactions in the accounting records.

In a transaction processing system quizlet