Inventory Costing: Developing Business Logic In Accounting Systems

Abstract

Business logic is the link in an information system between a user interface and a database. Typically it contains formal rules, translated into computer programs, that control how data will be processed to achieve the objectives of the information system. This paper describes a classroom exercise to help students understand this segment of an information system. In addition, it is useful for helping students understand the relation between traditional financial accounting and accounting systems. They are required to describe formally and precisely how FIFO and LIFO inventory values can be derived in an automated system.