SYSTEM DOCUMENTATION— REVENUE CYCLE (MANUAL AND COMPUTER PROCESSES) The following describes the revenue cycle procedures for a hypothetical company. The sales department clerk receives hard-copy customer orders and manually prepares a six-part hard-copy sales order. Copies of the sales order are distributed to various departments as follows: Copies 1, 2, and 3 go to the shipping department, and Copies 4, 5, and 6 are sent to the billing department where they are temporarily filed by the billing clerk. Upon receipt of the sales order copies, the shipping clerk picks the goods from the warehouse shelves and ships them to the customer. The clerk sends Copy 1 of the sales order along with the goods to the customer. Copy 2 is sent to the billing department, and Copy 3 is filed in the shipping department. When the billing clerk receives Copy 2 from the warehouse, she pulls the other copies from the temporary file and completes the documents by adding prices, taxes, and freight charges. Then, using the department PC, the billing clerk records the sale in the digital sales journal, sends Copy 4 (customer bill) to the customer, and sends Copies 5 and 6 to the AR and inventory control departments, respectively. Upon receipt of the documents from the billing clerk, the AR and inventory control clerks post the transactions to the AR Subsidiary and inventory subsidiary ledgers, respectively, using their department PCs. Each clerk then files the respective sales order copies in the department. On the payment due date, the customer sends a check for the full amount and a copy of the bill (the remittance advice) to the company. These documents are received by the mailroom clerk who distributes them as follows: 1. The check goes to the cash receipts clerk, who manually records it in the hard-copy cash receipts journal and prepares two deposit slips. One deposit slip and the check are sent to the bank; the other deposit slip is filed in the cash receipts department. 2. The remittance advice is sent to the AR clerk, who posts to the digital subsidiary accounts and then files the document. Required Prepare a data flow diagram and a system flowchart of the revenue cycle procedures previously described.

BuyFind

Accounting Information Systems

10th Edition
Hall + 1 other
Publisher: Cengage Learning,
ISBN: 9781337619202
BuyFind

Accounting Information Systems

10th Edition
Hall + 1 other
Publisher: Cengage Learning,
ISBN: 9781337619202

Solutions

Chapter
Section
Chapter 2, Problem 22P
Textbook Problem

SYSTEM DOCUMENTATION— REVENUE CYCLE (MANUAL AND COMPUTER PROCESSES)

The following describes the revenue cycle procedures for a hypothetical company.

The sales department clerk receives hard-copy customer orders and manually prepares a six-part hard-copy sales order. Copies of the sales order are distributed to various departments as follows: Copies 1, 2, and 3 go to the shipping department, and Copies 4, 5, and 6 are sent to the billing department where they are temporarily filed by the billing clerk.

Upon receipt of the sales order copies, the shipping clerk picks the goods from the warehouse shelves and ships them to the customer. The clerk sends Copy 1 of the sales order along with the goods to the customer. Copy 2 is sent to the billing department, and Copy 3 is filed in the shipping department.

When the billing clerk receives Copy 2 from the warehouse, she pulls the other copies from the temporary file and completes the documents by adding prices, taxes, and freight charges. Then, using the department PC, the billing clerk records the sale in the digital sales journal, sends Copy 4 (customer bill) to the customer, and sends Copies 5 and 6 to the AR and inventory control departments, respectively.

Upon receipt of the documents from the billing clerk, the AR and inventory control clerks post the transactions to the AR Subsidiary and inventory subsidiary ledgers, respectively, using their department PCs. Each clerk then files the respective sales order copies in the department.

On the payment due date, the customer sends a check for the full amount and a copy of the bill (the remittance advice) to the company. These documents are received by the mailroom clerk who distributes them as follows:

  1. 1. The check goes to the cash receipts clerk, who manually records it in the hard-copy cash receipts journal and prepares two deposit slips. One deposit slip and the check are sent to the bank; the other deposit slip is filed in the cash receipts department.
  2. 2. The remittance advice is sent to the AR clerk, who posts to the digital subsidiary accounts and then files the document.

Required

Prepare a data flow diagram and a system flowchart of the revenue cycle procedures previously described.

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Chapter 2 Solutions

Accounting Information Systems
Ch. 2 - What is the confirmation process?Ch. 2 - Computer-based systems employ four types of files....Ch. 2 - Give an example of a record for each of the four...Ch. 2 - What is the purpose of a digital audit trial?Ch. 2 - Give an example of how cardinality relates to...Ch. 2 - Distinguish between entity relationship diagrams,...Ch. 2 - What is meant by cardinality in entity...Ch. 2 - For what purpose are entity relationship diagrams...Ch. 2 - What is an entity?Ch. 2 - Distinguish between batch and real-time...Ch. 2 - What is the flat-file model?Ch. 2 - Is a data flow diagram an effective documentation...Ch. 2 - Is a flowchart an effective documentation...Ch. 2 - How may batch processing be used to improve...Ch. 2 - Why might an auditor use a program flowchart?Ch. 2 - How are system flowcharts and program flowcharts...Ch. 2 - What are the three general problems associated...Ch. 2 - What is task-data dependency?Ch. 2 - What is the database model?Ch. 2 - What information is provided by a record layout...Ch. 2 - In one sentence, what does updating a master file...Ch. 2 - What is the purpose of the DBMS?Ch. 2 - Flat files limit data integration. Explain.Ch. 2 - What factor influences the decision to employ...Ch. 2 - What are the advantages of real-time data...Ch. 2 - What are the advantages of real-time data...Ch. 2 - What are some of the more common uses of data...Ch. 2 - Compare and contrast the relative advantages and...Ch. 2 - Discuss the flow of cash through the transaction...Ch. 2 - Explain whether the cost accounting system...Ch. 2 - Discuss the role of the conversion cycle for...Ch. 2 - Can a turnaround document contain information that...Ch. 2 - Would the writing down of obsolete inventory be...Ch. 2 - Are both registers and special journals necessary?Ch. 2 - Discuss the relationship between the balance in...Ch. 2 - What role does the audit trail play in the task of...Ch. 2 - Explain how the magnetic audit trail functions.Ch. 2 - Are large batch sizes preferable to small batch...Ch. 2 - Discuss why an understanding of legacy system...Ch. 2 - If an organization processes large numbers of...Ch. 2 - If an organization processes transactions that...Ch. 2 - What is the purpose of a digital audit trail?Ch. 2 - What is meant by the term single user view as it...Ch. 2 - Explain the similarity and difference between the...Ch. 2 - Should an auditor wishing to assess the adequacy...Ch. 2 - Discuss some of the problems associated with...Ch. 2 - For each of the following items, indicate whether...Ch. 2 - Which of the following is NOT an advantage of...Ch. 2 - Which statement is NOT true? Batch processing a....Ch. 2 - Which is the least appropriate type of transaction...Ch. 2 - Which of the following statements is not correct?...Ch. 2 - Which of the following is NOT true of a turnaround...Ch. 2 - A documentation tool used to represent the logical...Ch. 2 - Which of the following is NOT a true statement? a....Ch. 2 - Which of the following is true of the relationship...Ch. 2 - (Appendix Question) Which statement is NOT...Ch. 2 - A database deadlock a. is a lock placed on a...Ch. 2 - An invoice file would best be coded using a(n)...Ch. 2 - Which statement is NOT correct? a. Legacy systems...Ch. 2 - A documentation tool that depicts the physical...Ch. 2 - A coding scheme in the form of acronyms and other...Ch. 2 - (Appendix Question) In a hashing structure a....Ch. 2 - (Appendix Question) An advantage of a physical...Ch. 2 - (Appendix Question) Which statement is NOT...Ch. 2 - (Appendix Question) Which statement is true about...Ch. 2 - Which of the following statements is NOT true? a....Ch. 2 - The production subsystem of the conversion cycle...Ch. 2 - Which statement is NOT true? a. Manufacturing...Ch. 2 - Which of the following files is a temporary file?...Ch. 2 - TRANSACTION CYCLE IDENTIFICATION Categorize each...Ch. 2 - TYPES OF FILES For each of the following records,...Ch. 2 - SYSTEM FLOWCHART PAYROLL Figure 2-4 in the text...Ch. 2 - SYSTEM FLOWCHART AP Using the format presented in...Ch. 2 - RECORD STRUCTURES FOR INVENTORY RECEIPT PROCESS...Ch. 2 - RECORD STRUCTURES FOR RECEIPT OF CASH ON ACCOUNT...Ch. 2 - SYSTEM FLOWCHART Using the diagram for Problem 7,...Ch. 2 - SYSTEM FLOWCHART BATCH PROCESS Analyze the system...Ch. 2 - SYSTEM FLOWCHART AND PROGRAM FLOWCHART From the...Ch. 2 - DATA FLOW DIAGRAM-PAYROLL Prepare a data flow...Ch. 2 - SYSTEM FLOWCHARTPAYROLL(MANUAL PROCESSES) Using...Ch. 2 - SYSTEM FLOWCHARTPAYROLL(AUTOMATED PROCESSES) Using...Ch. 2 - DATA FLOW DIAGRAMCASHDISBURSEMENTS Prepare a data...Ch. 2 - SYSTEM FLOWCHARTCASHDISBURSEMENTS...Ch. 2 - SYSTEM FLOWCHARTCASHDISBURSEMENTS...Ch. 2 - TRANSACTION CYCLERELATIONSHIP Refer to Figure 2-1...Ch. 2 - SALES PROCEDURES The following describes the sales...Ch. 2 - SYSTEM DOCUMENTATION-EXPENDITURE CYCLE...Ch. 2 - SYSTEM DOCUMENTATIONCASH RECEIPTS...Ch. 2 - The following describes the payroll procedures for...Ch. 2 - SYSTEM DOCUMENTATION-PAYROLL (AUTOMATED SYSTEM)...Ch. 2 - SYSTEM DOCUMENTATION REVENUE CYCLE (MANUAL...Ch. 2 - SYSTEM DOCUMENTATION-EXPENDITURE CYCLE (MANUALAND...Ch. 2 - SYSTEM DOCUMENTATION-CASH RECEIPTS...Ch. 2 - SYSTEM DOCUMENTATION-PURCHASES AND AP...Ch. 2 - SYSTEM DOCUMENTATIONCASH DISBURSEMENT...Ch. 2 - CODING SCHEME Devise a coding scheme using block...

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