Complete
Solutions for Accounting Information System 12e by Marshall B. Romney Paul J. Steinbart
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CHAPTER 2
Overview of Business Processes
2.1 Table 2-1 lists some of the documents used in the
revenue, expenditure, and human resources cycle. What kinds of input or
output documents or forms would you find in the production (or conversion)
cycle?
2.2 With respect to the data processing cycle, explain the phrase
“garbage in, garbage out.” How can you prevent this from happening?
2.3 </inst><para>What kinds of documents are most likely
to be turnaround documents? Do an internet search to find the answer and
to find example turnaround documents.
2.4 The data processing cycle in Figure 2-1 is an example of a basic
process found throughout nature. Relate the basic
input/process/store/output model to the functions of the human body.
2.5 Some individuals argue that accountants should focus on producing
financial statements and leave the design and production of managerial reports
to information systems specialists. What are the advantages and
disadvantages of following this advice? To what extent should accountants
be involved in producing reports that include more than just financial measures
of performance?
Why?</para></question></general-problem></problemset>
2.1 The chart of accounts must be tailored to an organization’s
specific needs. Discuss how the chart of accounts for the following
organizations would differ from the one presented for S&S in <link
linkend="ch02table04" preference="0">Table 2-2<xref
linkend="ch02table04" label="2-4"/></link>.</para>
2.2 <para>Design a chart of accounts for SDC. Explain how
you structured the chart of accounts to meet the company’s needs and operating
characteristics. Keep total account code length to a minimum, while still
satisfying all of Mace’s desires.</para><source>
2.3 An audit trail enables a person to trace a source
document to its ultimate effect on the financial statements or work back from
amounts in the financial statements to source documents. Describe in
detail the audit trail for the following:</para>
2.4 Your nursery sells various types and sizes of trees, bedding
plants, vegetable plants, and shrubs. It also sells fertilizer and
potting soil. Design a coding scheme for your nursery.
2.5 Match the following terms with their definitions
|
TERM
|
DEFINITION
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a. data processing
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1. Contains summary-level
data for every asset, liability, equity, revenue, and expense account
|
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b. source documents
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2. Items
are numbered consecutively to account for all items; missing items cause a
gap in the numerical sequence
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c. turnaround documents
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3. Path of
a transaction through a data processing system from point of origin to final
output, or backwards from final output to point of origin
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d. source data automation
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4. List of
general ledger account numbers; allows transaction data to be coded,
classified, and entered into proper accounts; </para
<para>facilitates preparation of financial statements and reports
|
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e. general ledger
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5. Contents
of a specific field, such as “George” in a name field
|
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f. subsidiary ledger
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6. Portion
of a data record that contains the data value for a particular attribute,
like a cell in a spreadsheet
|
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g. control account
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7. Company
data sent to an external party and then returned to the system as input
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h. coding
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8. Used to
record infrequent or non-routine transactions
|
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i. sequence code
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9.
Characteristics of interest that need to be stored
|
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j. block code
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10. The steps a company
must follow to efficiently and effectively process data about its
transactions
|
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k. group code
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11. Something about
which information is stored
|
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l. mnemonic code
|
12. Stores cumulative
information about an organization; like a ledger in a manual AIS.
|
|
m. chart of accounts
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13. Contains detailed
data for any general ledger account with many individual subaccounts
|
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n. general journal
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14. Contains records of
individual business transactions that occur during a specific time period
|
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o. specialized journal
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15. Updating each
transaction as it occurs
|
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p. audit trail
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16. Devices that
capture transaction data in machine-readable form at the time and place of
their origin
|
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q. entity
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17. Used to record
large numbers of repetitive transactions
|
|
r. attribute
|
18. Set of
interrelated, centrally coordinated files
|
|
s. field
|
19. Two or more
subgroups of digits are used to code items
|
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t. record
|
20. Updating done
periodically, such as daily
|
|
u. data value
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21. Systematic
assignment of numbers or letters to items to classify and organize them
|
|
v. master file
|
22. Letters and
numbers, derived from the item description, are interspersed to identify
items; usually easy to memorize
|
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w. transaction file
|
23. Initial record of a
transaction that takes place; usually recorded on preprinted forms or
formattted screens
|
|
x. database
|
24. Fields containing
data about entity attributes; <keyterm linkend="ch02kt29"
role="strong" preference="1">like a row in a
spreadsheet
|
|
y. batch processing
|
25. Sets of numbers are
reserved for specific categories of data
|
|
z. online, real-time processing
|
26. The general ledger
account corresponding to a subsidiary ledger, where the sum of all subsidiary
ledger entries should equal the amount in the general ledger account
|
2.6 For each of the following scenarios identify which data processing
method (batch or online, real-time) would be the most appropriate.
2.7 <para>After viewing the Web sites, and based on your reading
of the chapter, write a 2 page paper that describes how an ERP can connect and
integrate the revenue, expenditure, human resources/payroll, and financing
cycles of a business.
2.8 Which
of the following actions update a master file and which would be stored
as a record in a transaction file?
1. Update customer address
change
2. Update unit pricing information
3. Record daily sales
4. Record payroll checks
5. Change employee pay rates
6. Record production run
variances
7. Record Sales Commissions
8. Change employee office
location
9. Update accounts payable
balance
10. Change customer credit
limit
11. Change vendor payment
discount terms
12. Record purchases
2.9 You were hired
to assist Ashton Fleming in designing an accounting system for S&S.
Ashton has developed a list of the journals, ledgers, reports, and documents
that he thinks S&S needs (see <link linkend="ch02table06"
preference="1">Table 2-6<xref linkend="ch02table06"
label="2-8"/></link>). He asks you to complete the
following tasks:</para>
a. Specify what data you think should be collected on each of the
following four documents:
b. Design a report to manage inventory.</para></listitem>
1. Design a report to assist
in managing credit sales and cash collections.
2. Visit a local office supply
store and identify what types of journals, ledgers, and blank forms for various
documents (sales invoices, purchase orders, etc.) are available. Describe
how easily they could be adapted to meet S&S’s needs.
2.1 Bar Harbor Blueberry Farm
Data from Case
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Date
|
Supplier Invoice
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Supplier Name
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Supplier Address
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Amount
|
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March 7
|
AJ34
|
Bud’s Soil Prep, Inc.
|
PO Box 34
|
$2,067.85
|
|
March 11
|
14568
|
Osto Farmers Supply
|
45 Main
|
$ 67.50
|
|
March 14
|
893V
|
Whalers Fertilizer, Inc.
|
Route 34
|
$5,000.00
|
|
March 21
|
14699
|
Osto Farmers Supply
|
45 Main
|
$3,450.37
|
|
March 21
|
10102
|
IFM Package Wholesale
|
587 Longview
|
$4,005.00
|
|
March 24
|
10145
|
IFM Package Wholesale
|
587 Longview
|
$ 267.88
|
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