Overview of Transaction Processing & ERP Systems

Actions taken by an organization, like acquiring capital, hiring employees, or selling products.

An exchange between entities (e.g., selling goods, paying a vendor or depreciating equipment).

Process of recording a transaction, starting from data capture to financial reports.

Interactions with customers, involving selling goods and receiving payment.

Deals with suppliers (paying cash for goods/services).

Involves using labor and resources to create a product.

Handling employee payments and related activities.

Involves raising & managing capital (getting and spending cash).

The series of steps to process data, including input, storage, processing, and output.

The first step in data processing; capturing data from a business activity.

Documents sent back to the origin to verify data accuracy during input.

Using technology to capture data directly from the source, improving input efficiency and accuracy.

A file that stores cumulative information on resources and agents.

A summary of all accounts; the top-level view of all financial transactions and positions.

Detailed records for a specific account; a breakdown of transactions or amounts.

Using numbers or letters to organize data items.

A record of a transaction showing the accounts and amounts debited and credited.

A journal used for recording routine transactions, such as cash receipts, disbursements, credit sales, and purchases.

A journal for non-routine transactions, like adjustments or correcting errors.

Something about which information is stored.

A characteristic of an entity, such as a student's GPA.

A permanent storage of cumulative information about an organization's entities.

A coding scheme where blocks of numbers within a sequence are reserved for specific categories. For example, all asset accounts might be assigned codes within the 1000-1999 range.

A coding scheme that uses multiple subgroups of digits to represent an item. Each subgroup might identify a different aspect of the item, like the account type, sub-account, and specific account.

A comprehensive list of all general ledger accounts used by an organization. It's a structured framework for organizing financial data.

Documentation that allows tracing a transaction from its origin to its final recording or vice versa. It's important for accountability and auditing.

The original record of a transaction, e.g., a sales invoice, a purchase order, or a check.

A record of transactions in chronological order. It's the first step in the transaction processing cycle.

Managers use measurements to guide decision-making. They can be used for planning, operations, control, and evaluation.

Financial statements are often provided to both internal and external stakeholders. However, some outputs are specifically for internal use, such as budgets, sales forecasts, and performance reports.

Unwise measurement can have negative consequences. For example, if only budget adherence is emphasized, managers might forgo essential equipment maintenance.

Enterprise Resource Planning (ERP) systems integrate all aspects of a company's operations, including financial and non-financial data. This centralizes information and improves decision-making across the organization.

Traditional Accounting Information Systems (AIS) primarily focused on financial data. ERP systems expanded this to include non-financial data, making operations and decision-making more holistic.

The process of recording, classifying, and summarizing financial transactions, including capturing data, processing it, and generating reports.

A summary account that represents all transactions related to a specific financial category.

A set of attributes related to a specific instance of an entity.