Course: Accounting and Payroll Systems / Systems-Accounting Cycle

Assignment: (C2) Flowcharting

The following is a narrative of the procedures involved in the processing of a company's sales and
cash receipts.

Charting, Inc., processes its sales and cash receipts documents in the following manner:

Receipts on account. The mail is opened each morning by a mail clerk in the sales department. The
mail clerk prepares a remittance advice (showing customer and amount paid) if one is not received.
The checks and remittance advices are then forwarded to the sales department supervisor, who
reviews each check and forwards the checks and remittance advices to the accounting department
supervisor.

The accounting department supervisor, who also functions as credit manager in approving
new credit and all credit limits, reviews all checks for receipts on past due accounts and then forwards
the checks and remittance advices to the accounts receivable clerk, who arranges the advices in al-
phabetical order. The remittance advices are posted directly to the accounts receivable subsidiary
ledger cards. The checks are endorsed by stamp and totaled. The total is posted to the cash receipts
journal. The remittance advices are filed chronologically.

After receiving the cash from the previous day's cash sales, the accounts receivable clerk
prepares the daily deposit slip in triplicate. The third copy of the deposit slip is filed by date, and the
second copy and the original accompany the bank deposit.

Sales. Salesclerks prepare sales invoices in triplicate. The original and second copy are presented to
the cashier. The third copy is retained by the salesclerk in the sales book. When the sale is for cash,
the customer pays the salesclerk, who presents the money to the cashier with the invoice copies.

A credit sale is approved by the cashier from a credit list after the salesclerk prepares the
three-part invoice. After receiving the cash or approving the invoice, the cashier validates the original
copy of the sales invoice and gives it to the customer. At the end of each day the cashier recaps the
sales and cash received and forwards the cash and the second copy of all sales invoices to the
accounts receivable clerk.

The accounts receivable clerk balances the cash received with cash sales invoices and
prepares a daily sales summary. The credit sales invoices are posted to the accounts receivable
subsidiary ledger, and then all invoices are sent to the inventory control clerk in the sales department
for posting to the inventory control cards. After posting, the inventory control clerk files all invoices
numerically. The accounts receivable clerk posts the daily sales summary to the cash receipts journal
and sales journal and files the sales summaries by date.

The cash from cash sales is combined with the cash received on account to comprise the daily
bank deposit.

Bank deposits. The bank validates the deposit slip and returns the second copy to the accounting
department, where it is filed by date by the accounts receivable clerk. Monthly bank statements are
reconciled promptly by the accounting department supervisor and are filed by date.

REQUI RED
In an effort to better understand the sales and cash receipts system, a flowchart has been
started using excel.

Complete the excel flowchart of Charting, Inc. by labeling the appropriate symbols (the
unlabeled symbols are coded in yellow) and by adding any missing information flow lines. The chart
is complete as to symbols; do not add any additional symbols. Be sure to complete both pages of the
flowchart.