Page 74 - Accounting Information Systems

CHAPT E R 2 Introduction to Transaction Processing 45

FI G U R E
2-3 APRODUCT DOCUMENT

1
Source
Document 2
Customer's Data Sales Order 3
Collection
Order

Customer

Bill Sales
System
Remittance Advice

Product
Document

convey information to various functions, such as billing, shipping, and AR. The information in the sales
order triggers specific activities in each of these departments.

PRODUCT DOCUMENTS. Product documents are the result of transaction processing rather than the
triggering mechanism for the process. For example, a payroll check to an employee is a product document
of the payroll system. Figure 2-3 extends the example in Figure 2-2 to illustrate that the customer’s bill is
a product document of the sales system. We will study many other examples of product documents in
later chapters.

TURNAROUND DOCUMENTS. Turnaround documents are product documents of one system that
become source documents for another system. This is illustrated in Figure 2-4. The customer receives a per-
forated two-part bill or statement. The top portion is the actual bill, and the bottom portion is the remittance
advice. Customers remove the remittance advice and return it to the company along with their payment
(typically a check). A turnaround document contains important information about a customer’s account to
help the cash receipts system process the payment. One of the problems designers of cash receipts systems
face is matching customer payments to the correct customer accounts. Providing this needed information as
a product of the sales system ensures accuracy when the cash receipts system processes it.
Journals
A journal is a record of a chronological entry. At some point in the transaction process, when all relevant
facts about the transaction are known, the event is recorded in a journal in chronological order. Docu-
ments are the primary source of data for journals. Figure 2-5 shows a sales order being recorded in the
sales journal (see the following discussion on special journals). Each transaction requires a separate jour-
nal entry, reflecting the accounts affected and the amounts to be debited and credited. There is often a
time lag between initiating a transaction and recording it in the accounts. The journal holds a complete
record of transactions and thus provides a means for posting to accounts. There are two primary types of
journals: special journals and general journals.