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Accounting Information Systems

11th Edition
Ulric J. Gelinas + 3 others
ISBN: 9781337552127

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BuyFindarrow_forward

Accounting Information Systems

11th Edition
Ulric J. Gelinas + 3 others
ISBN: 9781337552127
Textbook Problem

The narrative and systems flowchart for the Bridgeport LLC cash receipts system are included in Exhibit 9.5 and Figure 9.11 (p. 348), respectively.

EXHIBIT 9.5 Bridgeport LLC System Narrative to Accompany Problem 9-1

Bridgeport LLC uses the following procedures to process the cash received from credit sales. Customers send checks and remittance advices to Bridgeport. The mailroom clerk at Bridgeport endorses the checks and writes the amount paid and the check number on the remittance advice. Periodically, the mailroom clerk prepares a batch total of the remittance advices and sends the batch of remittance advices to accounts receivable, along with a copy of the batch total. At the same time, the clerk sends the corresponding batch of checks to the cashier.

In accounts receivable, a clerk enters the batch into the computer by keying the batch total, the customer number, the invoice number, the amount paid, and the check number. After verifying that the invoice is open and that the correct amount is being paid, the computer updates the accounts receivable master data. If there are any discrepancies, the clerk is notified.

At the end of each batch (or at the end of the day), the computer prints a deposit slip in duplicate on the printer in the cashier’s office. The cashier compares the deposit slip to the corresponding batch of checks and then takes the deposit to the bank.

As they are entered, the check number and the amount paid for each receipt are logged on a disk. These event data are used to create a cash receipts listing at the end of each day. A summary of customer accounts paid that day is also printed at this time. The accounts receivable clerk compares these reports to the remittance advices and batch totals and sends the total of the cash receipts to the general ledger office.

FIGURE 9.11 Bridgeport LLC Systems Flowchart to Accompany Problem 9-1

images

Using Exhibit 9.5 and Figure 9.11, do the following:

  1. a. Prepare a control matrix, including explanations of how each recommended control plan helps to accomplish—or would accomplish in the case of missing plans—each related control goal. Your choice of recommended control plans should come from Figure 9.4 (p. 325)/Exhibit 9.3 (pp. 327–328) or Figure 9.6 (p. 333)/Exhibit 9.4 (p. 335), as appropriate. Be sure to tailor the matrix columns to conform to the specifics of the Bridgeport system. In doing so, assume the following two effectiveness goals only:
  • Timely deposit of checks
  • Compliance with compensating balance agreements with the depository bank
  1. b. Annotate the systems flowchart in Figure 9.11 to show the location of each control plan listed in the control matrix.

a)

Summary Introduction

To prepare: A control matrix that includes a control plan, which helps to accomplish control goals.

Introduction:

Accounting Information System (AIS) is said to be the specialized subsystem of the Information System (IS). AIS can be used in the business events for the purpose of collecting, processing, and reporting the financial information.

Explanation

Given diagram:

Prepare a control matrix that includes a control plan, which helps to accomplish control goals:

Note: Timely deposit of checks and comply with compensating balance agreement with depository banks are included to ensure the effectiveness of operations.

Preformatted input screens:

Simplified data entry and the structured data entry process helps to save the time and it helps to obey with balance agreement. It helps to ensure the efficient employment of resources.

Preformatted input screen ensures input accuracy, as the cursor automatically moves to another field once the data filled in the current field.

Online prompting:

Questioning users for the input help to save the time and it helps to obey with balance agreement. It helps to ensure the efficient employment of resources.

Guidance from an online source helps to reduce the error in the input document.

Programmed edit checks:

Programmed edit checks help to identify the errors in the input document, then the clerk will take corrective actions based on the identified errors. it helps to obey with balance agreement and saves time.

The edits in the input document help to identify enormous errors, which would result in improved accuracy...

b)

Summary Introduction

To annotate: The given system flowchart.

Introduction:

Accounting Information System (AIS) is said to be the specialized subsystem of the Information System (IS). AIS can be used in the business events for the purpose of collecting, processing, and reporting the financial information.

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