Transaction Processing

Question 1

Code

Answer 1

A system of words, letters, figures or symbols used to represent others

Question 2

Advantages of computerised accounting system in recording transactions

Answer 2

○ Record & retrieve information quickly & easily
○ Automatically accurate - have built in checking facilities
○ Can file a large amount of information in a small space
○ Capable of sorting information in many different ways

Question 3

Under UK law, directors are responsible for ensuring that accounting records do the following ……..

Answer 3

1) Show analysis of income & expenditure –> SOPL
2) Show financial position of company at any particular time –> SOFP
3) Records all asset & liabilities of company (including inventory)

Question 4

Features of good coding system

Answer 4

○ Items each have a unique code
○ Codes are uniform in structure & length

Question 5

Types of codes

Answer 5

a) Sequential
–> No obvious connection

b) Block/group classification
–> Often the 1st digit indicates the classification

c) Faceted code
–> Each digit in the code gives information about an item

d) Mnemonic code
–> Learning technique to aid memory (abbreviation)

e) Hierarchical code
–> Type of faceted code , each digit further to the right represents a smaller subset

f) Alphabetical code
–> Using part of the company or person’s name

Question 6

Advantages of coding system

Answer 6

• Code is briefer than a description
• Saves clerical time & computer storage space
• Code is more precise than a description
• Reduce ambiguity
• Facilitates data processing

Question 7

We check goods received with what document ?

Answer 7

Delivery note & Purchase order

Question 8

We check supplier/purchase invoice with what before payment ?

Answer 8

GRN - ensure terms & prices are as agreed and calculations are correct

Question 9

What document can be use to update stocks?

Answer 9

MRN & GRN

Question 10

Perpetual inventory system

Answer 10

Maintain inventory record –> Update each time material is received into/from stores –> New balance of inventory calculated

Question 11

Information on inventory system

Answer 11

• Description
• Inventory code - ease of updating
• Inventory unit - metres,kg
• Location in store
• Issues to production - date, quantity, reference to MRN
• Receipts - date, quantity, details of Material Returned Note
• Balance - quantity of inventory on hand
• Value - unit cost, cost of issue & receipt

Question 12

Free inventory

Answer 12

= Inventory on hand + order - scheduled for use

Question 13

Bin cards and stores ledger accounts are independent, therefore……

Answer 13

Quantity of inventories recorded should be the same

Question 14

Function of Material Requisition Note

Answer 14

○ Updating stores ledger account in costing department
○ Charging the job, overhead or department that is using the materials

Question 15

Timesheets

Answer 15

Filled in by employee as a record of how their time has been spent

Question 16

Purpose of timesheets

Answer 16

○ Provide management with information for further analysis (etc : product cost)
○ A basis for billing for services provided
○ Record hours spent and support claims for/authorise overtime payments

Question 17

Job card

Answer 17

Given to employee, showing the work to be done & the expected time it should take

Employee then record time started & finished for each job

** Contain entries relating to numerous employees

Question 18

Purpose of job card

Answer 18

○ Ensuring time recorded is accurate
○ Authorisation of overtime payments
○ Allow analysis of labour hours
○ Assist coding of labour costs