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ITM 330 (14)
Chapter 5

ITM330 Chapter 5 Notes.docx

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Department
Information Technology Management
Course
ITM 330
Professor
Peter Pille
Semester
Fall

Description
ITM 330 Chapter 5 Notes Accounting Activities Financial Accounting consists of documenting all transactions of a company that have an impact on the financial state of the firm and then using these documented transactions to create reports for external parties and agenciesBalance Sheet is a statement that shows account balances such as cash held amounts owed to the company by customers the cost of RM and finished goods inventory ect o Also gives a good overview of a companys financial health at a point in timeIncome Statement Profit and loss statement shows the companys sales cost of sales and the profit or loss for a period of time typically a quarter or year Managerial Accounting deals with determining the costs and profitability of the companys activitiesProvides information that managers use to control a companys daytoday activities and to develop longterm plans for operations marketing personnel needs repayment of debt and other management issues Using ERP for Accounting Information The General Ledger is a record where all companys account are kept Many SAP ERP modules cause transaction data to be entered into the general ledger including Sales and Distribution SD which lets the users record sales and creates an accounts receivable entry Materials Management MM which controls purchasing and recording of inventory changes Financial Accounting FI which manages the accounts receivable and accounts payable items created in the SD and MM modules Controlling CO which tracks the costs associated with producing products Human Resources HR which manages the recruiting hiring compensation termination and severance of employees Also manages payroll and benefits Asset Management AM which manages fixedassets purchases plant and machinery and related depreciation Operational DecisionMaking Problem Credit Management Industrial Credit Granting Companies routinely sell to customers on credit Good financial management requires that only so much credit be extended to a customer If Marketing and Accounting are unintegrated accounting may not update salespayment receipts immediately in this case AR will not be up to date Perhaps a customer has paid but the books do not
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