AC412 Accounting Information Systems Sec.08/01 (.. .

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Problem 1 John Doe has worked furiously for the past month trying to document the major business information flows at MAS Co., Ltd. Upon completing his personal interviews with cash receipts clerks, John asks you to develop a comprehensive DFD and document flowchart for the cash receipts system. Johns narrative of the system follows: Customer payments include cash received at the time of purchase and account payments received in the mail. At days end, the treasurer endorses all checks and prepares a deposit slip for the checks and the cash. A clerk then deposits the checks, cash, and deposit slip at the local bank each day. When checks are received as payment for accounts due, a remittance slip is included with the payment. The remittance slips are used to update the accounts receivable file at the end of the day. The remittance slips are stored in a file drawer by date. Every week, a cash receipts report and an aged trial balance are generated from the data in the accounts receivable ledger. The cash receipts report is sent to the management. A copy of the aged trial balance by customer account is sent to the credit and collections department. Required: a. Develop a context diagram and a Level 0 DFD for the cash receipts system at MAS Co., Ltd. b. Prepare a document flowchart to document the cash receipts system at MAS Co., Ltd.

Context Diagram of the Cash Receipts System at S&S:

Bank Deposit

Payment at Sale Customers Remitances on Account Cash Receipts System Cash Receipts Report Management

Aged Trial Balance Credit and Collections

Level 0 Data Flow Diagram of the Cash Receipts System at S&S:

Customers

Payments at Sale Remittances on Account Remittance Slips 2.0 Update Customer Accounts

Remittance File

1.0 Process Payments Endorsed Checks & Cash, Deposit Slip

Bank

Accounts Receivable Ledger

3.0 Prepare Reports

Aged Trial Balance

Cash Receipts Report

Management

Credit and Collections

b.

Document Flowchart of the Cash Receipts System:

S&S Cash Receipts System

Treasurer Clerk Accounts Receivable

From Customer

Cash and Checks Remittance Slip

Cash and Checks

Remittance Slip

Deposit Slip

To Bank Endorse Checks and Prepare Deposit Slip for Cash & Checks

Update Accounts Receivable Ledger/File

Accounts Receivable Ledger/File

Remittance Slips Generate Weekly Reports Cash and Checks D

Deposit Slip Cash Receipts Report Aged Trial Balance

A To Management

To Credit & Collections

Problem 2 Ashton has decided to analyze the accounts payable process at S&S. His intent is to document how to present system works so the transition to a computerized system will be easier. He also hopes to improve any weaknesses he discovers in the system. In the following narrative, Ashton explains what happens at S&S: Before S&S pays a vendor invoice, the invoice must be matched against the purchase order used to request the goods and the receiving report that the receiving department prepares. Because all three of these documents enter the accounts payable department at different times, a separate alphabetical file is kept for each type of document. The purchase orders that are forwarded from purchasing are stored in a purchase order file. The receiving reports are stored in a receiving report file. When vendor invoices are received, the accounts payable clerk records the amount due in the accounts payable ledger and then files the invoices in the vendor invoice file. S&S policy is to make sure all accounts are paid within 30 days to take advantage of the early-payment discounts that suppliers offer. When it comes time to pay a particular bill, the accounts payable clerk retrieves the vendor invoice and attaches the purchase order and the receiving report. These matched documents are forwarded to Ashton. Ashton reviews the documents to ensure they are complete and prepares a two-part check. The checks and the other three documents are forwarded to Susan for her approval and signature. Ashton records the check amount in the cash disbursements journal. Susan reviews the documents to ensure they are valid payables and then signs the checks. She forwards the check to the vendor and returns the documents and the second copy of the check to the accounts payable clerk. The clerk files the documents alphabetically in a paid invoice3 file. At the end of every month, the accounts payable clerk uses information from the accounts payable ledger to prepare an accounts payable report. This report is forwarded to Susan for her review. After she is finished with the report, Susan files it chronologically. Required: a. Prepare a context diagram and a Level o DFD to document accounts payable processing at S&S. b. Prepare a document flowchart to document accounts payable processing at S&S.

Context Diagram of S&S Accounts Payable

Level 0 Data Flow Diagram of S&S Accounts Payable

Receiving Purchasing Receiving Report File

Purchase Order File

Vendor Invoice File Invoice Vendor 1.0 Record Payable Payment & Remittance Advice Vendor

2.0 Make Payment

Accounts Payable File

Payment support data Paid Invoice File

Cash Disbursement Update data Cash Disbursements Journal

3.0 Prepare Management Reports

Accounts Payable Report

Management

b.

Document Flowchart of S&S Accounts Payable