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In: Accounting

Computerized Accounting Systems and E-commerce Apple Inc.'s iTunes® provides digital products, such as music, video, and...

Computerized Accounting Systems and E-commerce

Apple Inc.'s iTunes® provides digital products, such as music, video, and software, which can be downloaded to portable devices such as the iPhone® and iPod®. Purchases from iTunes are made with credit cards that are on file with the credit card processing company. Such transactions are considered cash transactions. Once the purchases are made, consumers can download the requested digital products to their portable devices for their enjoyment and the charges will show up on their credit card bills.

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Answer:

a.         iTunes is an example of a B2C, or business-to-consumer e-commerce application The B, or business, is Apple. The C, or consumers, would mostly be individuals who purchase digital

b.

Cash

15

Fees Earned

15

products from the download store.

c.         The cash receipts journal is used to record debits to Cash from cash sales or collections on account.

d.         The electronic invoice form can be used for either transactions on account, as illustrated in the chapter, or for cash sales. The invoice form used for sales on account is different from the one used for cash sales. The latter invoice form makes a debit to Cash, rather than a debit to a customer account.

e.         Sales made on B2C e-commerce transactions are computerized transactions, so a special journal is inappropriate. On an e-commerce site, the consumer inputs the transaction information on the Web page; thus, there is no need for a separate electronic form for re-entering the same information to record the sale. Essentially, the e-commerce application is the form that originates the sales transaction inside the accounting system. Accounting transactions flow directly from the shopping cart information directly into the accounting system.


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