ACCOUNTING INFORMATION SYSTEM

Objectives:

QUESTION 1

XYZ Company processes its sales and cash receipt document based on

1. Payment on account

Each morning the mail clerk in the sales department opens the mail and prepares a remittance advice (showing customer and amount paid) if one is not received. The checks and remittance advices are forwarded to the sales department supervisor, who will review each check and forwards each checks and remittance advices to accounting department supervisor

The accounting department supervisor, who also functions as credit manager (approving new credit and credit limit), reviews all checks for payment on past-due account. She forward the checks and remittance advice to account receivable clerk, who arrange the advices in alphabetical order. The remittance advices are posted directly to the account receivable ledger. The checks are endorsed and the total is posted to the cash receipt journal. The remittance advice are filed chronological order logically. After receiving the cash from the previous day cash sales, the account receivable clerk prepare the daily deposit slip in three copies. The second copy of the deposit slip will accompany the bank slip and the third copy will filed by date.

2. Sales

Sales clerks prepare sales invoice in three copies. The original and the second copies are presented to the cashier. The sales clerk retain the third copy in the sales book. When a sale is on cash, the customer pays the sales clerk, who give the money to the cashier with the invoice copies

The cashier approve the credit sale from an approved credit list after the sales clerks prepares the three part invoice. After receiving cash or approving the invoice, the cashier validate the original copy of the sales invoice and give it to the customer. At the end of each day, the cashier recaps the sales and cash received and forward the cash and second copy of the sales invoice to the account receivable clerk.

The account receivable clerk balance the cash received with cash sales invoice and prepare daily sales summary. The sales invoice is posted to the account receivable ledger and then all invoices are sent to the inventory control clerk in sales department for posting the inventory control card. The inventory clerk files the invoices numerically. The accounts receivable clerk posts the daily sales summary to the cash receipt and sales journal and files the sales by date.

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

3. Bank deposit

The bank validate the deposit slip and return the second copy to the accounting department, where the account receivable clerk files it by date. Monthly bank statement are reconciled promptly by the accounting department supervisor and filed by date

Required:

a) Prepare context diagram and level 0 DFD for ABC sales and cash receipt transaction

b) Prepare document flowchart to document the sales and cash receipt transaction

Your answer must be type and printed out. You need to use the New Times Roman and the fond is 12.

Page 2