San Carlos College

Department: B.E.S.O.
Subject: Accounting Information System
Professor: Jeffrey M. Peralta, CPA

Accounting Information System is a collection of data and processing procedures that creates needed information for
its users.

Data are facts stored in a system. A fact should be a number, date, name and so on.
Information is a group of data that collectively carry a logical meaning.

What Makes Information Useful?

1) Relevant – information needed to make decision
2) Reliable – information free from bias
3) Complete – does not omit important aspects of events or activities
4) Timely – information should be provided in time
5) Understandable – information must be presented in meaningful manner
6) Verifiable – able to be checked
7) Accessible – available when needed

An accounting information system (AIS) is a structure that a business uses to collect, store, manage, process, retrieve,
and report its financial data so it can be used by accountants, consultants, business analysts, managers, chief financial
officers (CFOs), auditors, regulators, and tax agencies.

Components of Accounting Information System

1) People who use the system
2) Processes (like Standard Operating Procedures)
3) Technology (data, software, I.T.)
4) Controls to safeguard information

Page 1 of 12
San Carlos College
Department: B.E.S.O.
Subject: Accounting Information System
Professor: Jeffrey M. Peralta, CPA

Basic Types of Business Processes

1) Revenue – Sales, Collection

2) Expenditure – Inventory Purchases, Capital and Operating Expenditures

Illustration 1: Inventory Purchases

Ordering Process
*Purchasing department to make Purchase Orders. Once Purchase Order is approved, this will be forwarded to supplier.

Start

Create Purchase Order

Is the
order No
approved?

Yes

Forward to supplier

End

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San Carlos College
Department: B.E.S.O.
Subject: Accounting Information System
Professor: Jeffrey M. Peralta, CPA

Receiving & Payment Process

*Once delivery of purchased items are done by supplier, Receiving Report together with Sales Invoice from supplier, will
be forwarded to Finance and Accounting for payment.

Receiving Process

Start

Receive Inventory items

Are the
items Coordinate supplier with
No
complete? the missing items

Yes

Forward the invoice

and receiving report to
Accounting for
payment

End

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San Carlos College
Department: B.E.S.O.
Subject: Accounting Information System
Professor: Jeffrey M. Peralta, CPA

Payment Process

Start

Receive documents from

Purchasing Department

Are the
Coordinate Purchasing
documents No
complete? dept. with the missing
documents

Yes

Prepare check in
payment for the
supplier

End

Page 4 of 12
San Carlos College
Department: B.E.S.O.
Subject: Accounting Information System
Professor: Jeffrey M. Peralta, CPA

Illustration 2: Capital and Operating Expenditures

Billing Review and Payment Process

*Billings/statement of account is received by the Company from vendor/supplier for expenses incurred. Usually,
Accounts Payable Section under Finance/Accounting Department is the one who verifies and reviews the billing.

Start

AP Section
receives/reviews billing

Is the Coordinate the

Billing No vendor/supplier with the
correct? incorrect items/amounts

Yes

Prepare check in
payment for the
supplier

End

Page 5 of 12
San Carlos College
Department: B.E.S.O.
Subject: Accounting Information System
Professor: Jeffrey M. Peralta, CPA

Illustration 2: Revenue/Collection

Revenue/Collection Process
*Sales Invoice/Billing Statement is forwarded to customers for every service rendered and or goods sold by the Company.
Sales Department is the one who are directly engaged with the customers. Whenever sales are made or executed by the
Sales Department, sales invoice/billing statement and other pertinent documents will be forwarded to Collection
Department.

Start

Sales Department
forwards Sales
documents to Collection

Are the docs Coordinate the sales

complete No dept. for the incomplete
and valid? /incorrect documents

Yes

Collection department
will follow up
customers

End

Page 6 of 12
San Carlos College
Department: B.E.S.O.
Subject: Accounting Information System
Professor: Jeffrey M. Peralta, CPA

ANNEX A: Basic Data Flow Diagram Symbols

Page 7 of 12
San Carlos College
Department: B.E.S.O.
Subject: Accounting Information System
Professor: Jeffrey M. Peralta, CPA

ANNEX B: Technical Terms

Purchase Order - is a commercial document and first official offer issued by a buyer to a seller indicating types,
quantities, and agreed prices for products or services.

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San Carlos College
Department: B.E.S.O.
Subject: Accounting Information System
Professor: Jeffrey M. Peralta, CPA

Receiving Report - is an important record of the merchandise that a retailer has actually received from a supplier because
it documents what is owed to the supplier in terms of payment for the goods received.

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San Carlos College
Department: B.E.S.O.
Subject: Accounting Information System
Professor: Jeffrey M. Peralta, CPA

Sales Invoice/Billing Statement - provide the business with a record of the services they've provided to a client, when the
services were rendered and how much money the client owes the business. Sales Invoice is used usually by merchandising
business while billing statement is used by service providing businesses.

Page 10 of 12
San Carlos College
Department: B.E.S.O.
Subject: Accounting Information System
Professor: Jeffrey M. Peralta, CPA

Page 11 of 12
San Carlos College
Department: B.E.S.O.
Subject: Accounting Information System
Professor: Jeffrey M. Peralta, CPA

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