The bottom-line is that databases can have a major impact on all of the accounting cycles. Capturing the Output - Financial statements and other external reports The output part of the accounting cycle is extremely important because the information must meet certain guidelines. Because external financial statements are used by a variety of people in a variety of ways, financial accounting has common rules known as accounting standards and as generally accepted accounting principles (GAAP) (Price, 2010). In order to meet such expectations the input (sales invoices, payroll time card, etc. and Transaction Processing (journals, ledgers, trial balances) that proceed the output part of the accounting cycle must be accurate. Having a manager check the data inputted in the database versus the sales invoices, payroll cards, and other inputted data is a good way to ensure that the output will be accurate. Entity Relationship Diagram for the Output part of the Accounting Cycle Entity relationships in a data base are a major component inside a firm or a business or company that tells a story or passage about the events related to customer or consumer usage to that company.
Economic events and information in relation to who and what had involvements to that company. The “Who” of a particular company is called the Agent which is participants of a transaction between the customer and the salesperson: while, the “what” is the event inside the SELLS PRODUCT TO activity itself? CUSTOMER SALEPERSON AASSETS --------- ---------- ---------- IS DEPLETED BY SALES CASH ASSETS INCREASED BY SALE INVENTORY AASSETS --------- ---------- --------- The above diagram indicates the salesperson making a sale of product to the customer.
This transaction will deplete the inventory on hand for Riordan but will increase Riordan’s cash assets by the sale. This increase in cash asset will then be reflected in the financial statement of Riordan. Accounting Assets generate resources from these events through the sale of inventory. To become a resource an entity must pass a couple of test, one being an object of value, two being an object of interest. In an accounting cycle an “Entity” must mirror an accounting cycle to design a blueprint to start a database. I (Quintin) used to work for a company called “S. M. I. L. E. , from 2002 to 2008 and it was a small company containing a very small database which was ran and set up by about 4 to 5 departments. The company was funded by a government grant that they used to help poor families with their bills and sometimes passing out food baskets to needy, not just around the holidays but when the funds were available. The key to receiving funds depended on the income of a household, which means that they had to qualify for the assistance. Here is fictional table of how the system (database) would apply: Employee Department Roster Employed (Employee) Last NameFirst NameDept.
MangerLocationPhone Number BroussardTonyaAccnon/app. Bldg#4 233-0001ext. 301 AnthonyFredH/RectempBldg#2233-1200ext. 412 YoungVeraCust/Sfull/repBldg#1233-0001ext. 719 In this table the different departments for the company were all distributed in a table that showed who ran what department and that which was how the same way the payroll was set up and displayed for accounting cycle which are done by the managerial employees inside of a business. Conclusion In closing, it is evident that the role of technology in particular the database has become an important part of the business world.
Riordan manufacturing integrating the database into their business will realize positive impacts in their accounting and overall efficiency that otherwise would be impossible to accomplish. Businesses, who do not take advantage of today’s technological advances, place themselves at a big disadvantage to their competitors. The bottom-line is that most businesses would be crippled and maybe even be forced to close their doors without technological advances such as databases. References Price, R. (2010). Financial Accounting. Retrieved from http://www. accountingcoach. com/online-accounting-course/financial-accounting. html