...CHAPTER 2 Overview of Business Processes SUGGESTED ANSWERS TO DISCUSSION QUESTIONS 1. Three different types of information exist in Table 2.1: 1. Internally-generated financial data 2. Internally-generated operating data 3. Externally-generated data. Internally generated financial data would be captured directly on source documents that are processed by the AIS and would be reported in traditional financial statements. Internally generated operating data can be captured in two ways. Some of this data (e.g., time worked) would be captured on source documents. Other data (e.g., employee skills) would traditionally be captured and stored by an information system that is not part of the AIS itself. The AIS, however, should be redesigned so as to integrate this data with the other transaction-oriented data. Some of the data (e.g., information on market share and customer satisfaction) must come from external sources. The AIS should be designed to store this data in an integrated manner with internally generated data. 2.2 The fact that all documents are prenumbered provides a means for accounting for their use and for detecting unrecorded transactions. Thus, a missing check indicates a meal for which a customer did not pay. Since each server has his or her own set of checks, it is also easy to identify which server was responsible for that customer. This policy may help to deter theft (e.g., serving friends and not requiring...
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...stakeholders: vendors, customers, employees, stockholders, and others. 1b. The sales/collection process is concerned with providing goods and services to clients, then collecting the related payment. 1c. The sales/collection process comprises seven steps: a. Take a customer’s order b. Approve the customer’s credit c. Fill the order based on approved credit d. Ship the product e. Bill the customer f. Collect payment g. Process uncollectible receivables as necessary. 1d. Sales Order Packing Slip Bill of lading Invoice Check Remittance Guide Deposit Slip 1e. Internal controls in the sales/collection process should be based on a comprehensive risk analysis. Depending upon its risk exposures, an organization can implement internal controls such as document matching, separation of duties, bank reconciliations, and formalized policies for granting credit to customers. 1f. 1) They only accept checks. Dan should not collect payment, makes deposits, and reconcile the bank statement. 2) They should have a person collect the check, another person deposit the check, and a third person deposit the money. 3) They need to run sales through a point of purchase or financial software. Dreambox does not log and enter into Quicken. They only use Quicken to write checks. They can sign up for a merchant account for credit cards and have checks electronically deposited into bank account. 6. Sales A/R Sales Discounts COG Sold Inventory ...
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...Chapter 1—AIS overview (3 Questions = 4.5 points) Purpose of/value provided by AIS 1. Improving the quality and reducing the costs of products or service 2. Improve efficiency and effectiveness of the value chain and supply chain 3. Share knowledge 4. Improve the internal control structure 5. Improve decision making Key Role if the AIS 1. Collecting and storing data 2. Providing information for decisions 3. Safeguarding assets Value Chain Activities 1. Inbound Logistics------ receiving and storage 2. Operations -------------- manufacturing and repackaging 3. Outbound Logistics---- distribution shipping 4. Marketing & Sales------ advertising, selling 5. Service-------------------- repair, maintenance Characteristic of Useful Information 1. Relevant 2. Reliable 3. Timely 4. Verifiable 5. Understandable 6. Accessible 7. Complete Chapter 2/SUA Purpose/use of general ledger, subsidiary ledgers, special journals and cash prelist General Ledger= contains summary level data for every asset, liability, equity and revenue, and expense account...(accounts receivable) Subsidiary Ledger= contains detailed data for any general ledger account with many individualized subaccounts.... (Separate account for each accounts receivable) General Journal= used to record infrequent or non-routine transaction, such as loan payments Specialized Journal= records large numbers of repetitive...
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... a. CRM b. lockboxes c. aging accounts receivable d. EDI 9. For good internal control, who should approve credit memos? a. credit manager b. sales manager c. billing manager d. controller 10. For good internal control over customer remittances, the mailroom clerk should separate the checks from the remittance advices and send the customer payments to which department? a. billing b. accounts receivable c. cashier d. sales Chapter 13: 1. Which of the following inventory control methods is most likely to be used for a product for which sales can be reliably forecast? a. JIT b. EOQ c. MRP d. ABC 3. Which of the following is true? a. It is easier to verify the accuracy of invoices for purchases of services than invoices for purchases of raw materials. b. Setting up petty cash as an imprest fund violates segregation of duties. c. The EOQ formula is...
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...with: * Provides goods and services to customers * Collects cash in payment for those sales Primary Objective: * Provide the right product * In the right place * At the right time for the right price ------------------------------------------------- BASIC REVENUE CYCLE ACTIVITIES & GENERAL THREATS BASIC REVENUE CYCLE ACTIVITIES 1. Sales order entry 2. Shipping 3. Billing 4. Cash collections GENERAL REVENUE CYCLE THREATS 1. Inaccurate or invalid master data 2. Unauthorized disclosure of sensitive information 3. Loss or destruction of master data 4. Poor performance GENERAL REVENUE CYCLE CONTROLS 1. Data processing integrity controls 2. Restriction of access to master data 3. Review of all changes to master data 4. Access controls 5. Encryption 6. Backup and disaster recovery procedures 7. Managerial reports 1. ------------------------------------------------- SALES ORDER ENTRY ACTIVITIES AND THREATS | CONTROL | 1. Take order 1. Incomplete/inaccurate orders 2. Invalid orders | 3. Data entry edit controls 4. Restriction of access to master data 5. Digital signatures or written signatures | 2. Check and approve credit * Uncollectible accounts | * Credit limits * Specific authorization to approve sales to new customers or sales that exceed a customer’s credit limit * Aging of accounts receivable | 3. Check inventory...
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...CHAPTER 2 * Overview of Business Processes SUGGESTED ANSWERS TO DISCUSSION QUESTIONS 2.1 Table 2-1 lists some of the documents used in the revenue, expenditure, and human resources cycle. What kinds of input or output documents or forms would you find in the production (or conversion) cycle? Students will not know the names of the documents but they should be able to identify the tasks about which information needs to be gathered. Here are some of those tasks: * Requests for items to be produced * Documents to plan production * Schedule of items to be produced * List of items produced, including quantity and quality</inst></para></question><question id="ch02ques02" label="2.2"> * Form to allocate costs to products * Form to collect time spent on production jobs * Form requesting raw materials for production process * Documents showing how much raw materials are on hand * Documents showing how much raw materials went into production * List of production processes * List of items needed to produce each product * Documents to control movement of goods from one location to another 2.2 With respect to the data processing cycle, explain the phrase “garbage in, garbage out.” How can you prevent this from happening? When garbage, defined as errors, is allowed into a system that error is processed...
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...fraudulent activities. Also, this company needs to engage in a system of checks and balances among each department to ensure validity, accuracy and completeness. Analysis The first step in the expenditure process may create issues. All the employees should not have access to create a purchase requisition. For example, how can an employee that works in the cash disbursement department know about the inventory levels and make a purchase requisition. BLUE Company is lacking an inventory control department; this needs to be incorporated. BLUE Company should limit the number of employees with the access to create a purchase requisition within the inventory control department. Unauthorized access exposes assets to misappropriation, damage, and theft. By incorporating access controls, BLUE Company may be able to eliminate the misappropriation of assets. The purchase requisition should be prepared by an employee with access to inventory needs. Also, a purchase requisition should only be prepared when inventory drops under the predetermined reorder point. This point is set by each individual firm. This is to ensure that a firm is not purchasing unnecessary amount of inventory. After the purchase...
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...ACT 564 Homework Problem 1.1 Information technology is continually changing the nature of accounting and the role of accountants. Write a two-page report describing what you think the nature of the accounting function and accounting information system in a large company will be like in the year 2020. When thinking about the future of accounting and the accounting function and accounting information system, it is hard to imagine what it will be like in the future. We have come so far in such a little time technology wise. The year 2020 isn’t that far off into the future if you actually think about it and so much is bound to change! Though as a side note, if I started thinking about the Mayan calendar and how they believe the world will end on December 21, 2012. If this is true, will there even be the year 2020 to look forward to? I can remember my cousin, who is an accountant, doing all her work on paper and in a book. She always stayed late to make sure she wouldn’t get behind on her work. Now ten years later ninety percent of her work is all on the computer. Not only does this save her time but it can also make things easier when automated. In the next eight years, I believe that ninety-eight percent will all be done on the computer. The only thing that will need to be hands on or on paper will be backup copies in case something happens to the computer database. I expect large companies will only need maybe two accountants once everything is almost automatic...
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...Flowchart 1 is an overview of the Production Cycle. The Production Cycle is a recurring set of business activities and related data processing operations associated with the manufacture of products. In understanding the flowchart it is best to look at its relationships and interactions with the other cycles. Using a context diagram, the Production Cycle was shown as being linked to the Revenue Cycle by receiving customer orders and sales forecasts from the Revenue Cycle, and sending finished goods to the revenue cycle. It is linked to the Expenditure Cycle by sending purchase requisitions to order raw materials to the Expenditure Cycle, and the Expenditure Cycle then allocates overhead and raw materials costs to the Production Cycle. The Production Cycle is linked to the Human Resource/Payroll Cycle by requesting labor from HRP, which then allocates the labor costs to the Production Cycle. Management receives reports from the Production Cycle, which sends cost of goods produced information to the General Ledger and Reporting System. The overall performance of the Production Cycle can be improved through technology. The entire process should be integrated, using relational databases linked to internal and external sources as part of an ERP (Enterprise Resource Planning) operation. CIM (Computer Integrated Manufacturing) using robots and on-line terminals can rapidly implement production plans, reducing costs. Data about the costs of production...
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...receiving system. 1.2. The receiving system should allow the end user the option to search for incoming orders by purchase order number or supplier name 1.2.1. The initial list for the supplier name selection option should display a list all of suppliers by company name, location, and status of open purchase orders 1.2.1.1. The system should check to see if the response to the request is longer than 25 items. If so the system should allow the user to narrow the search. 1.2.2. The initial list for purchase order selection option should show a list of open purchase orders to be received on the current day 1.2.2.1. The system should check to see if the response to the request is longer than 25 items. If so the system should allow the user to narrow the search. 1.2.3. In the case of no results the option to modify search criteria or cancel should be provided 1.3. The list of purchase orders returned should show the purchase order number, order date, product number, basic product description, total number of items in delivery 1.4. The system should allow the purchase order to be selected and opened to view the purchase order. 1.5. Once opened the options to edit purchase order, print purchase order, go back, print labels should be available 1.6. The system should allow the purchase order to be edited by a manager. 1.6.1. The edit screen should display a list the items in the order showing the product name, product number or sku, items ordered, and items received 1.6.2. The...
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...VENDOR INFORMATION MANUAL Revised: March 21, 2011 For more information contact Supply Chain Services or your Category Manager The North West Company 77 Main Street Winnipeg MB R3C 2R1 Canada Phone: (204) 943-0881 Fax: (204) 934-1495 Visit our Internet Web Site at www.northwest.ca NWC Vendor Information Manual Table of Contents Introduction....................................................................... 7 Merchandising.................................................................... 8 Displays......................................................................................................................................8 Price Increases ...........................................................................................................................8 Production Information Changes ...............................................................................................8 Vendor Agreements ...................................................................................................................8 Invoicing...................................................................... 9-12 Distribution Centre Invoice Procedures .....................................................................................9 Direct Ship Invoice Procedures ...............................................................................................10 Additional Invoicing Requirements ..............................................................
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...Purchase Order System at ABC Company Gap Analysis of Purchase order system at ABC Company Consolidated report detailing site wise PO’s and collection made No systematic monitoring of Cash flows Shooting E mails attaching the Bills to Supplier, Project Manager and Account Department Manual Triplication of Bill Centralized automated Purchase order numbering system Uncontrolled Purchase order numbering Downloadable file option for Pos maintained on the portal Hard Copies lost when removed from file for discussions/clarification Ticket to be raised before any changes and Communication of changes to the supplier given after the changes are recorded in the system Changes in PO are communicated to supplier over Phone hence improper recording Maintenance of Master Price List and Supplier List Different prices for same item ordered Control Register details maintained in a Database of a system Manual Control Register As Is System To Be System Requirement Analysis 1) List Requirements I. System generated PO number with User and location component coded. II. PO can be viewed/saved in PDF form from the application. Same can then be printed III. Every PO raised for a particular project is routed to that project’s PM for approval. He can also consolidate orders for the same supplier before forwarding them. IV. Every change to a PO(by PM/supplier) raised as a separate ticket...
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...explain how the system works and what employees need to know in order to use it effectively. It will also explain the advantages and disadvantages of using the software. As a result of the Fishbowl Inventory System, Macy’s gross margin of 39.94% has increased 13 points year after year (Lockard, R. 2010). This inventory system, which integrates with QuickBooks, has helped Macy’s maintain a precise inventory count over the different holiday seasons. With this streamlined inventory system, Macy’s is able cut down on overstocked equipment and wasted material. As a result of having their inventory in place at the right time, they are able to avoid having to cut prices in order to move their products. For every sales and purchase transaction that is scanned through a mobile barcode scanner, Fishbowl transfers the invoice and vendor bills to the QuickBooks software which handles accounting. The mobile barcode scanner allows you to collect data based on serial numbers, lot numbers, revision levels and expiration dates. Inventory is automatically updated so you now exactly how much space you need in your warehouse. With the Fishbowl software, you can create auto-reorder points which will automatically place orders based on past successes and future projections. Data can be inputted based on locations. One you have inputted your preferred vendors into the software, Fishbowl will automatically make a purchase order once the inventory count has reached its reorder point. Fishbowl...
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...One Purchase Order and an Inventory Receipt will be automatically gets created in the system and a notification will be send to Financial Users in the Notification Summary Page. Navigation Path: ORPC Order Management Super User Notification Summary The following screen will appear once you click on the screen .The details screen will display the Purchase Order Number and the Receipt Number. Please note the PO and Receipt Numbers before Proceeding to next section. 2. Landed Costing Once the Import transaction is completed the materials will be costed as below: Navigation Path: ORPC_Energy_Apps_Fin_Super_User Landed CostTransactionsHeader Level Charges [EAP] * Navigate to the ‘Header Level Charges’ window following the path mentioned above. * Select the PO Number from LOV. * Select Organization Code from LOV * Select the Receipt Number (if multiple receipts) from LOV * Press post button. * Press ‘OK’ Navigation Path: ORPC_Energy_Apps_Fin_Super_User Landed CostTransactionsLanded Cost Transaction [EAP] * Navigate to the ‘Landed Cost Transaction’ window following the path mentioned above. * Select the Organization Code and Receipt Number (PO number will default automatically) * Press ‘Find’ * For a particular component name enter the following details Type: Select ‘Corporate’ Rate Type (In Case of Foreign Currency) Date: Select ‘Date’ Rate: Rate will default. Per Unit Rate or Amount * Press ‘Re-Calculate...
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...Chapter 4 The Procurement Process Multiple Choice Questions | 1. |Which one of the following is not a type of organizational data that is utilized in the procurement process? | | | | | |Client | | |Company Code | | |Storage Location | | |Purchasing Organization | | |Manufacturing Plant | | | | | |Answer: e Difficulty: Easy Page Reference: 2 | | |Section: Organizational Data Practice: ...
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