LEARN MORE...

Computerized Accounting System

Content type

User Generated

Subject

Accounting

School

Rasmussen University

Type

Homework

Uploaded By

xbune844

Pages

Showing Page:

1/4

SURNAME 1

Computerized Accounting System

Institution

Instructor

Course

Date

Computerized Accounting System

1. What specific areas of your computerized accounting system would you review to verify

the legitimacy of this billing or to prove it’s not an accurate billing? Be specific.

The Computerized Accounting System (CAS) produces accounting records and reports by

processing transactions using hardware and software. Usage of computers creates a quick,

timely, and accurate access to information and ultimate decision. The components of CAS form

the five pillars on which the accounting system rests. They include;

Procedure: logical sequence of actions to perform a task

Data: raw input data in the application

People: system users

Hardware: computer physical components; network and peripherals

Software: software’s and applications

Data is the component of CAS I would review to prove the legitimacy of the billing process.

Here, I would confirm the bill by checking my purchase history. CloudZ may bill the wrong

instead of the web servers I remember. To prove the accuracy of the purchase, I would provide a

Showing Page:

2/4

SURNAME 2

document showing signatories of the company representative or employee who received the item

or purchased it from CloudZ. This will be sufficient to prove the legitimacy of the bill.

2. What is the financial statement impact of entering this incorrect bill in your

computerized system? If it wasn’t caught as an incorrect billing and was entered in

your system, what is the effect of paying this bill on your financial statements? Consider

all accounts and statement impacts in your response.

The inability to detect errors is one of the significant drawbacks of CAS. Entering the

incorrect bill in the accounting system will result in a financial loss for our company. Unpaid

invoices are liabilities, end of story! Accounts payables and inventories and the accounts affected

by this transaction. Delinquent bills will be recorded in accounts payables as a credit entry,

increasing the credit balance in the business. The incorrect billing will also result in an increase

in inventories. An increase in ending inventory raises the cost of goods sold (COGS), which

increases the net income. Net income is added to retained earnings to increase the total owners’

equity.

3. After determining this is not an accurate billing and that you won’t be paying this bill,

is there need to record this in your computerized accounting system anywhere? Why or

why not?

Since the invoice has been delivered to the business as the ‘addressee’, there is a need to

record a reversing entry to correct the error. Incorrect invoices termed duplicate bills can be used

to defraud either by the supplier or with collusion with an internal employee. The original and

correcting invoice numbers can be for reference in the future. Generally speaking, deleting an

invoice may be illegal as the authorities require all organizations to keep their financial

Showing Page:

3/4

End of Preview - Want to read all 4 pages?

Access Now

Unformatted Attachment Preview

SURNAME 1 Computerized Accounting System Institution Instructor Course Date Computerized Accounting System 1. What specific areas of your computerized accounting system would you review to verify the legitimacy of this billing or to prove it’s not an accurate billing? Be specific. The Computerized Accounting System (CAS) produces accounting records and reports by processing transactions using hardware and software. Usage of computers creates a quick, timely, and accurate access to information and ultimate decision. The components of CAS form the five pillars on which the accounting system rests. They include; Procedure: logical sequence of actions to perform a task Data: raw input data in the application People: system users Hardware: computer physical components; network and peripherals Software: software’s and applications Data is the component of CAS I would review to prove the legitimacy of the billing process. Here, I would confirm the bill by checking my purchase history. CloudZ may bill the wrong instead of the web servers I remember. To prove the accuracy of the purchase, I would provide a SURNAME 2 document showing signatories of the company representative or emplo ...
Purchase document to see full attachment

Tags: CAS hardware and software accounting system logical sequence of actions web servers