Transaction Processing System
The TPS is central to the overall function of the information system by converting economic events into financial transactions, recording financial transactions in the accounting records (journals and ledgers), and distributing essential financial information to operations personnel to support their daily operations.
The TPS deals with business events that occur frequently. In a given day, a firm may process thou-
sands of transactions. To deal efficiently with such volume, similar types of transactions are grouped to- gether into transaction cycles. The TPS consists of three transaction cycles: the revenue cycle, the expenditure cycle, and the conversion cycle. Each cycle captures and processes different types of finan- cial transactions. Chapter 2 provides an overview of transaction processing. Chapters 4, 5, 6, and 7 exam- ine in detail the revenue, expenditure, and conversion cycles.