Accounting Cycle 13

985 Words Jun 27th, 2008 4 Pages
Accounts Receivable Cycle
Riordan Manufacturing, an industry leader in the field of plastic injection molding, has facilities in California, Georgia, Michigan and China. The accounting functions are carried out in each individual location, and consolidated for processing in the corporate offices in California. The Georgia and Michigan locations, being newly acquired, are using systems that are not completely compatible with the corporate offices. This is causing problems on many levels and within this paper, Learning Team A will discuss the accounts receivable cycle as Riordan Manufacturing would like to achieve.
Learning Team A will discuss the strengths and weaknesses of the internal controls of the accounts receivable cycle, the
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Having this kind of format, all accounts receivable input from the different entities will be seamlessly connected into one system.
Value systems and value chains under REA ontology can also be used for the integration. Since accounts receivable deals with billing or collecting payments from customers and/or companies, value system level helps to exchange resources between the enterprise and its various external business partners such as suppliers, customers, creditors/investors, and even employees. Under value system, the three entities can easily trade data needed and provide reports or invoices to their customers (Dunn, et al, 2004). On the other hand value chain level focuses more on the resource flows between interconnected business processes, such as the three different entities of Riordan Manufacturing. Accounts Receivable Information Flow Chart
As the flow chart below illustrates, accounting information begins with the accounts receivable clerk for each location, who inputs and processes invoices, payments, collections and day end closing procedures. Reports created from the input of the clerks passes to the general accounting supervisor at the corporate offices, who oversees and audits the receivables and payables departments. Once the supervisor completes his or her duties, the adjusted reports are randomly checked by an external auditor to verify the information and from there it goes to the Director of Accounting and

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