Introduction to
Transaction Processing
Financial Transaction
-an economic event that affects
the assets and equities of a firm, is
reflected in its accounts, and is
measured in monetary terms
Transaction Cycles
Expenditure Cycle
Purchases/Accounts Payable System
Cash Disbursements System
Payroll System
Fixed Asset System
Conversion Cycle
Production System
Cost Accounting System
Revenue Cycle
Sales Order Processing
Cash Receipts
Accounting Records
Manual Systems
Documents Ledgers
Source Documents General Ledgers
Product Documents Subsidiary Ledgers
Turnaround Documents
Journals
Special Journals
Register
General Journals
Source Document
Product Document
Turnaround
Document
-are product
documents of one
system that become
source documents
for another system
The accounting records mentioned
for the manual systems provide the
audit trail for tracing transactions
from source documents to the
financial statements
Computer-based systems
Master File
Contains account data (e.g. general/subsidiary ledgers)
Transaction File
Temporary file holding transaction records (e.g. sales
orders, inventory receipts, cash receipts)
Reference File
Stores data that are used as standards for processing
transactions (e.g. tax table, price lists)
Archive File
Contains records of past transactions that are retained
for future reference (e.g. journals, prior-period records)
Accounting Records in a Computer-Based System
Flowchart Sample
Accounting Records in a Computer-Based System
Audit Trail Sample
Documentation Techniques
Data Flow Diagrams
Entity Relationship (ER) Diagrams
Document Flowcharts
System Flowcharts
Program Flowcharts
Record Layout Diagrams
Data Flow Diagram (DFD)
This uses symbols to represent the entities,
processes, data flows and data stores that pertain to
a system.
Presents the sources and destinations of data and
their interactions
Shows the logical elements of a system
Commonly used symbols of DFD:
Entity Input Source or Output Data Store
Name Name
Destination of Data
A store of data such as a transaction file, a
master file or a reference file
N
A process that is
Direction of Data Flow
triggered or
Process supported by data
Description
Entity Relationship (ER) Diagram
This is used to represent relationship between
entities - physical resources, events and agents about
which the organization wishes to capture
Degree of Relationship is measured by Cardinality:
One-to-one (1:1)
One-to-many (1:M)
Many-to-many (M:M)
Document Flowchart
-used to depict the elements of a manual system,
including accounting records, organizational departments
involved in the process and activities that are performed
in the departments
Commonly Used Symbols
Terminal showing source or
destination of documents Calculated Batch
Total
Source document or report
On-page connector
Manual Operation
Off-page connector
File storing source
documents
Description of
process/comments
Accounting Records
Document flowline
System Flowchart
-depict the relationships between input data, transactions
files, computer programs, master files and output reports
produced by a system
Commonly Used Symbols
Terminal input/
Hard Copy Output device
Computer process Process flow
Direct Access Real-time
Storage Device connection
Magnetic tape Video display device
Program Flowchart
-describes the logic of a program supporting the system
Commonly Used Symbols
Logical Process
Terminal Start or end of
Operation
Decision
Input/output operation
(read and write records)
Flow of logical
process
Record Layout
Diagrams
-used to reveal the internal structure of the records that constitute a file or
database table
Below is a sample record layout diagram for a customer file
Customer Customer Street Credit
City State Zip Code
Number Name Address Limit
Batch processing
-a group of similar transactions are accumulated over
time and processed together
Real-time processing
-transactions are processed individually at the moment
the event occurs
Comparison of the Data Processing
Methods
Batch Real-Time
Lag exists between time when Processing takes place when
the economic event occurs and the economic event occurs so
when it is recorded there is no time lag
Generally fewer resources are More resources are required
required than for batch processing
Certain records are processed All records pertaining to the
after the event to avoid event are processed
operational delays immediately
