Page 379 - Accounting Information Systems

350 PART II Transaction Cycles and Business Processes

The General Ledger System

Figure 8-1 characterizes the general ledger system (GLS) as a hub connected to the other systems of the
firm through spokes of information flows. Transaction cycles process individual events that are recorded
in special journals and subsidiary accounts. Summaries of these transactions flow into the GLS and
become sources of input for the management reporting system (MRS) and financial reporting system
(FRS). The bulk of the flows into the GLS comes from the transaction processing subsystems. Note, how-
ever, that information also flows from the FRS as feedback into the GLS. We shall explore this point
more thoroughly later. In this section we review key elements of the GLS.

THE JOURNAL VOUCHER
The source of input to the general ledger is the journal voucher, which is illustrated in Figure 8-2. A jour-
nal voucher, which can be used to represent summaries of similar transactions or a single unique transac-
tion, identifies the financial amounts and affected general ledger (GL) accounts. Routine transactions,
adjusting entries, and closing entries are all entered into the GL via journal vouchers. Because a responsi-
ble manager must approve journal vouchers, they offer a degree of control against unauthorized GL
entries.

THE GLS DATABASE
The GLS database includes a variety of files. Whereas these will vary from firm to firm, the following
examples are representative.

FI GU RE
8-1 RELATIONSHIP OF GLS TO OTHER INFORMATION SUBSYSTEMS

Financial
Reporting
System
Management
Billings Reporting
System

Inventory
Sales
Control
General
Ledger
System
(GLS)
Cash
Receipts Payroll

Cost Cash
Accounting Disbursements
Accounts
Payable