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SYSTEM DOCUMENTATION-EXPENDITURE CYCLE (MANUAL AND COMPUTER PROCEDURES) The following describes the expenditure cycle for a hypothetical company. The company has a centralized computer system with terminals located in various departments. The terminals are networked to a computer application, and digital accounting records are hosted on a server in the data processing department. Each day, the computer in the data processing center scans the inventory records looking for items that must be replenished. For each item below its reorder point, the system creates a digital purchase order and prints two hard copies. A technician in the data center sends the purchase orders to the purchasing department clerk. Upon receipt of the purchase orders, the purchasing clerk reviews and signs them. He sends Copy 1 to the supplier and files Copy 2 in the purchasing department. A few days later, the supplier ships the order and the goods arrive at the receiving department. The receiving clerk reviews the digital purchase order from his terminal, inspects the goods, creates a digital receiving report record, and prints two hard copies of the receiving report. The system automatically updates the inventory records to reflect the receipt of goods. The clerk sends Copy 1 of the receiving report with the goods to the stores, where they are secured. Copy 2 is filed in the receiving department. A day or two later, the AP clerk receives a hardcopy supplier’s invoice (bill) for the items shipped. The clerk accesses the digital receiving report and purchase order from her terminal. She then reconciles these documents with the supplier’s invoice. If all aspects of the order reconcile, the clerk records the purchase in the digital purchases journal and posts the amount owed to the AP subsidiary account from her terminal. Each day, the computer application in the data processing department automatically scans the AP subsidiary file for items that are due for payment and prints a two-part check. The system closes out the AP record and creates a record in the digital cash disbursements journal. A data processing clerk then sends the check to the cash disbursement department where it is approved, signed, and distributed to the supplier. The check copy is filed in the cash disbursements department. Required Prepare a data flow diagram and a system flowchart of the expenditure 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 23P
Textbook Problem

SYSTEM DOCUMENTATION-EXPENDITURE CYCLE (MANUAL AND COMPUTER PROCEDURES)

The following describes the expenditure cycle for a hypothetical company.

The company has a centralized computer system with terminals located in various departments. The terminals are networked to a computer application, and digital accounting records are hosted on a server in the data processing department.

Each day, the computer in the data processing center scans the inventory records looking for items that must be replenished. For each item below its reorder point, the system creates a digital purchase order and prints two hard copies. A technician in the data center sends the purchase orders to the purchasing department clerk.

Upon receipt of the purchase orders, the purchasing clerk reviews and signs them. He sends Copy 1 to the supplier and files Copy 2 in the purchasing department.

A few days later, the supplier ships the order and the goods arrive at the receiving department. The receiving clerk reviews the digital purchase order from his terminal, inspects the goods, creates a digital receiving report record, and prints two hard copies of the receiving report. The system automatically updates the inventory records to reflect the receipt of goods. The clerk sends Copy 1 of the receiving report with the goods to the stores, where they are secured. Copy 2 is filed in the receiving department.

A day or two later, the AP clerk receives a hardcopy supplier’s invoice (bill) for the items shipped. The clerk accesses the digital receiving report and purchase order from her terminal. She then reconciles these documents with the supplier’s invoice. If all aspects of the order reconcile, the clerk records the purchase in the digital purchases journal and posts the amount owed to the AP subsidiary account from her terminal.

Each day, the computer application in the data processing department automatically scans the AP subsidiary file for items that are due for payment and prints a two-part check. The system closes out the AP record and creates a record in the digital cash disbursements journal. A data processing clerk then sends the check to the cash disbursement department where it is approved, signed, and distributed to the supplier. The check copy is filed in the cash disbursements department.

Required

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

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Chapter 2 Solutions

Accounting Information Systems
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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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