Page 135 - Accounting Information Systems

106 PART I Overview of Accounting Information Systems

15. SYSTEM DOCUMENTATION— slip and the check are sent to the bank; the other de-
posit slip is filed in the cash receipts department.
PAYROLL
2. The remittance advice is sent to the AR clerk, who
Required posts to the digital subsidiary accounts and then
Assuming the payroll system described in Problem 14 files the document.
uses database files and computer processing procedures, Required
prepare a data flow diagram, an entity relationship dia- Prepare a data flow diagram and a system flowchart of
gram, and a systems flowchart. the revenue cycle procedures previously described.

17. SYSTEM DOCUMENTATION—
16. SYSTEM DOCUMENTATION—
EXPENDITURE CYCLE (MANUAL
REVENUE CYCLE MANUAL AND
AND COMPUTER PROCEDURES)
COMPUTER PROCESSES
The following describes the expenditure cycle for a hy-
The following describes the revenue cycle procedures
pothetical company.
for a hypothetical company.
The company has a centralized computer system
The sales department clerk receives hard-copy cus-
with terminals located in various departments. The ter-
tomer orders and manually prepares a six-part hard-
minals are networked to a computer application, and
copy sales order. Copies of the sales order are distrib-
digital accounting records are hosted on a server in the
uted to various departments as follows: Copies 1, 2, and
data processing department.
3 go to the shipping department, and Copies 4, 5, and 6
Each day, the computer in the data processing center
are sent to the billing department where they are tempo-
scans the inventory records looking for items that must
rarily filed by the billing clerk.
be replenished. For each item below its reorder point,
Upon receipt of the sales order copies, the shipping
the system creates a digital purchase order and prints
clerk picks the goods from the warehouse shelves and
two hard copies. A technician in the data center sends
ships them to the customer. The clerk sends Copy 1 of
the purchase orders to the purchasing department clerk.
the sales order along with the goods to the customer.
Upon receipt of the purchase orders, the purchasing
Copy 2 is sent to the billing department, and Copy 3 is
clerk reviews and signs them. He sends Copy 1 to the
filed in the shipping department.
supplier and files Copy 2 in the purchases department.
When the billing clerk receives Copy 2 from the
A few days later, the supplier ships the order and the
warehouse, she pulls the other copies from the tempo-
goods arrive at the receiving department. The receiving
rary file and completes the documents by adding prices,
clerk reviews the digital purchase order from his termi-
taxes, and freight charges. Then, using the department
nal, inspects the goods, creates a digital Receiving
PC, the billing clerk records the sale in the digital Sales
Report record, and prints two hard copies of the receiv-
Journal, sends Copy 4 (customer bill) to the customer,
ing report. The system automatically updates the inven-
and sends Copies 5 and 6 to the AR and inventory con-
tory records to reflect the receipt of goods. The clerk
trol departments, respectively.
sends Copy 1 of the receiving report with the goods to
Upon receipt of the documents from the billing clerk,
the stores, where they are secured. Copy 2 is filed in the
the accounts receivable and inventory control clerks
receiving department.
post the transactions to the AR Subsidiary and Inven-
A day or two later, the accounts payable clerk receives
tory Subsidiary ledgers, respectively, using their depart-
a hard-copy supplier’s invoice (bill) for the items shipped.
ment PCs. Each clerk then files the respective sales
The clerk accesses the digital receiving report and pur-
order copies in the department.
chase order from her terminal. She then reconciles these
On the payment due date, the customer sends a
documents with the supplier’s invoice. If all aspects of the
check for the full amount and a copy of the bill (the
order reconcile, the clerk records the purchase in the digi-
remittance advice) to the company. These documents
tal purchases journal and posts the amount owed to the
are received by the mailroom clerk who distributes them
accounts payable subsidiary account from her terminal.
as follows:
Each day, the computer application in the data proc-
1. The check goes to the cash receipts clerk, who essing department automatically scans the accounts pay-
manually records it in the hard-copy cash receipts able subsidiary file for items that are due for payment
journal and prepares two deposit slips. One deposit and prints a two-part check. The system closes out the