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Accounting Information Systems > business processes 1 > Flashcards

business processes 1 Flashcards

1
Q

what are source documents?

A

they collect the data for the AIS and manage the flow of accounting data

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2
Q

how do source documents manage the flow of accounting data?

A

by:
- dictating the type of data collected
- encouraging the completeness of data
- serve as distributors of information
- establish authenticity of data (for audit trail)

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3
Q

what are the basic subsystems in AIS?

A
  • financing cycle
  • production cycle
  • resource management
  • expenditure cycle
  • revenue cycle
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4
Q

what is the sales process?

A

revenue cycle
- begins with customer order
- ends with collection of cash

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5
Q

what are the primary objectives of the sales process?

A
  • process sales in a timely and efficient manner
  • collect cash in a timely and efficient manner
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6
Q

what is included in the sales process?

A
  • receive an order for goods and services
  • select and inspect goods and services to be delivered
  • prepare goods or services for delivery
  • deliver goods or services
  • maintain customer records
  • send invoices
  • receive payment for goods and services
  • forecast future sales
  • accept customer returns of goods
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7
Q

activities in the sales process

A
  • sales order entry
  • cash collection
  • shipping
  • billing / AR
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8
Q

explain objectives and activities of sales order entry

A

objectives:
- responding to customer inquiries
- checking and approving customer credit
- checking inventory available

activities:
- online processing of sales orders with email
- electronic data interchange (EDI)
- linking EDI with customers’ point-of-sales (POS)
- the internet

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9
Q

explain cash collection activities

A
  • electronic funds transfer (EFT)
  • financial electronic data interchange (FEDI)
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10
Q

explain shipping objectives and activities

A

objectives:
- determine delivery method
- issue goods

activities:
- automated warehouse systems consisting of: computers, barcode scanners, conveyor belts, forklifts

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11
Q

explain billing/AR objectives and activities

A

objectives:
- invoicing customers

activities:
- online processing of invoice s
- electronic data interchange (EDI)

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12
Q

what are inputs (source documents) to the sales process?

A
  • sales order
  • sales invoice
  • shipping notice
  • remittance advice
  • debit/credit memoranda
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13
Q

what is a sales order?

A
  • created at time of sale
  • used to prepare the sales invoice
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14
Q

what is a sales invoice?

A
  • reflects information of the sale
  • products purchased, price, terms of payment
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15
Q

what are shipping notices?

A
  • prepared when warehouse releases goods
  • copy possibly included with goods
  • additional copy sent to accounts receivable
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16
Q

what is remittance advice?

A
  • may accompany the payment
  • customer or payer sends to a supplier or payee to confirm that an invoice has been paid
17
Q

what is debit/credit memoranda?

A
  • denotes return of damaged goods
  • identifies the discrepancies about amount owed
18
Q

what are the outputs of the sales process?

A
  • financial statements
  • bad debt report
  • customer billing statements
  • cash receipts forecast
  • ageing report
  • approved customer listing report
  • sales analysis reports
19
Q

explain financial statements

A
  • legal and regulatory requirements
  • SoPL
20
Q

what is a bad debt report?

A
  • information on collection follow-up procedures
  • helps manage overdue accounts
21
Q

what are customer billing statements?

A
  • summarises outstanding sales invoices
  • total amount currently owed at end of the sales process
22
Q

what is a cash receipts forecast?

A
  • source documents used as inputs
  • prior payment experience and ageing analysis aid in preparation
23
Q

what is an ageing report?

A

when the company makes a credit sale, there is a risk that the customer may not be able to pay back (bad and doubtful debts) -> the longer the customer leaves to pay the more it is a bad debt
- accounts and receivable balance
- categorised based on time outstanding

24
Q

explain an approved customer listing report

A
  • identifies customer approved for sales
  • includes customer information such as billing address, credit limits, and billing terms
25
Q

what is a sales analysis report?

A
  • detailed information captured by AIS
  • aid in decision-making process for production planning and marketing efforts
26
Q

what is the process for purchase process (expenditure cycle)?

A
  • begins with request for goods/services
  • ends with payment of cash
27
Q

what are the primary objectives of purchasing process?

A
  • purchase high-quality goods at best price
  • pay vendors at the optimal time
28
Q

what does the purchasing process include?

A
  • request of goods or services
  • order goods or services
  • receive and inspect goods or services
  • store and/or maintain goods
  • maintain vendor record
  • pay for goods or services
  • return goods
  • forecast purchases and future cash outflow
29
Q

what are the expenditure cycle business activities?

A
  • purchase request
  • order goods
  • receive goods
  • pay
  • approve payment
30
Q

what are the inputs to the purchasing process?

A
  • purchasing requisition
  • purchase order
  • vendor invoive
  • packing slip
  • bill of lading
  • receiving report
31
Q

what is a purchasing requisition?

A
  • identifies item requested
  • may indicate name of vendor
32
Q

explain purchase order

A
  • based on purchase requisition
  • includes vendor information
33
Q

what is a vendor invoice?

A
  • includes prices, shipping terms, and discounts
34
Q

what is bill of lading?

A
  • accompanies the goods sent
  • carrier assumes the responsibility for the goods
35
Q

outputs of the purchasing process

A
  • financial statement information
  • vendor checks
  • check (cheque) register
  • discrepancy reports
  • cash requirements forecast
36
Q

what is a check register?

A
  • list of all checks issued for a particular period
  • by-product of batch processing
37
Q

what are discrepancy reports?

A
  • notes differences in quantities or amounts
  • based on reconciliation of purchase order, receiving report, and purchase invoice
38
Q

what are cash requirements forecast?

A
  • predicts future payments and payment dates
  • utilises source documents

Accounting Information Systems (3 decks)

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