Professional Documents
Culture Documents
Chapter
A Transaction Cycle is . . .
Labor
Cash Fin. Goods Materials Plant
EXPENDITURE CYCLE Subsystems Purchasing & A/P Cash Disbursements Payroll CONVERSION CYCLE Subsystems Production Planning and Control Cost Accounting
Customers
Cash
REVENUE CYCLE Subsystems Sales Order Processing and Cash Receipts
Merchandising Shipments
Sale of Merchandise
GL & Fin Rpt Cycle Purchase of Mdse, & Labor, Etc.
Cash Receipts
PP&E, Investments
Cash Disbursements
Merchandising Shipments
Sale of Merchandise
PP&E, Investments
Cash Disbursements
Merchandising Shipments
Sale of Merchandise
Cash Receipts
PP&E, Investments
Cash Disbursements
Merchandising Shipments
Cash Receipts
GL & Fin Rpt Cycle Purchase of Mdse, & Labor, Etc. Merchandise Receipts
PP&E, Investments
Cash Disbursements
Merchandising Shipments
Sale of Merchandise
Cash Receipts
GL & PP&E, The Revenue Cycle Investments Fin Rpt Cycle Spans activities from Sale to Purchase of Mdse, & Labor, Etc.
Receipt of Cash.
Merchandise Sales Receipts Cash Receipts
Key
Cash Transactions:Disbursements
The major purpose of the revenue cycle is to facilitate the exchange of products or services with customers for cash.
Activities
Taking customer orders Credit Approval Check inventory availability Respond to customer inquiries
2.0 Shipping
Shipping
Pick Ship
3.0 Billing
Billing
Billing Maintain
Accounts Receivable
Ship
Bill
Safeguard
Safeguard
Sources of Input . . .
Customers Salespersons Credit
records
records
Inventory
Sources of Input . . .
Finished
goods warehouse
Suppliers Shipping
department
Forms of Input . . .
Customer Sales
order
order
Order Picking
acknowledgment
list
Forms of Input . . .
Packing Bill
slip notice
of lading invoice
Shipping Sales
Forms of Input . . .
Remittance Deposit Back
advice
slip
order
memo
Credit
Credit
application
Sales
A/R
Merchandising Shipments
Sale of Merchandise
Cash Receipts
GL & PP&E, Fin Rpt The Revenue Cycle Investments Cycle Spans activities from Sale to Purchase of Mdse, & Labor, Etc.
Key
Typical Accounts . . .
Sales Sales Sales
Accounts
Typical Accounts . . .
Bad
Debts Expense
For Doubtful Accounts
Check Credit
Ship Goods
Bill Cust.
Post Trans.
Perform Service
Segregation of Functions
Transaction
transaction
processing
Transaction
asset
Recordkeeping
P r e s id e n t
T re a s u re r
P r o d u c t io n
S a le s
C o n t r o l le r
C r ed i t
P u r c h a s in g
P r o m o t io n
B u d g e t in g
C a s hi e r
S h i p p in g
C u s t . S e r v ic e
A c c t. M a na ge r
In s ur a n c e
R e c e i v i ng
S a l e s O rd er
B i l li n g
S to r e s
A c c ts . R e c .
P r o d u c ti on
G en . Le d ger
F in i s h e d G oods
Organizational Independence
President
Treasurer Production Sales Controller Credit Purchasing Promotion Budgeting Cashier Shipping Cust. Service Acct. Manager Insurance Receiving Sales Order Billing
Stores
Accts. Rec.
Production
Gen. Ledger
Finished Goods
Functional Responsibility in a . . .
Sales Order Application System
Functional Responsibility
For
Origination
Authorization
Recording
Execution
President
Treasurer
Production
Sales
Controller
Credit
Purchasing
Promotion
Budgeting
Cashier
Shipping
Cust. Service
Acct. Manager
Insurance
Receiving
Sales Order
Billing
Stores
Accts. Rec.
Production
Gen. Ledger
Finished Goods
President
Treasurer
Production
Sales
Controller
Credit
Purchasing
Promotion
Budgeting
Cashier
Shipping
Cust. Service
Acct. Manager
Insurance
Receiving
Sales Order
Billing
Stores
Accts. Rec.
Production
Gen. Ledger
Finished Goods
1
Originate
President
Treasurer
Production
Sales
Controller
Credit
Purchasing
Promotion
Budgeting
Cashier
Shipping
Cust. Service
Acct. Manager
Insurance
Receiving
Sales Order
Billing
Stores
Accts. Rec.
Production
Gen. Ledger
2
Authorize
Finished Goods
President
Treasurer
Production
Sales
Controller
Credit
Purchasing
Promotion
Budgeting
Cashier
Shipping
Cust. Service
Acct. Manager
Insurance
Receiving
Sales Order
Billing
Stores
Accts. Rec.
Production
Gen. Ledger
Finished Goods
Execute
President
Treasurer
Production
Sales
Controller
Credit
Purchasing
Promotion
Budgeting
Cashier
Shipping
Cust. Service
Acct. Manager
Insurance
Receiving
Sales Order
Billing
Stores
Accts. Rec.
Production
Gen. Ledger
Finished Goods
4
Record
President
Treasurer
Production
Sales
Controller
Credit
Purchasing
Promotion
Budgeting
Cashier
Shipping
Cust. Service
Acct. Manager
Insurance
Receiving
Sales Order
Billing
Stores
Accts. Rec.
Production
Gen. Ledger
2
Authorize
Finished Goods
1
Originate
4
Record
Execute
Functional Responsibility in an . . .
Accounts Receivable Application System
Functional Responsibility
For
1
Treasurer Credit
President
3
Sales Controller Budgeting
Production
Purchasing
Promotion
Cashier
Shipping
Cust. Service
Acct. Manager
Insurance
Receiving
Sales Order
Billing
Stores
Accts. Rec.
Production
Gen. Ledger
Finished Goods
Control Objectives
All All All
Control Objectives
All
Assets
Business
Threats
1. 2. 3. 4.
2.0 Shipping
Threats
5.
Shipping Errors
Wrong merchandise Wrong quantities Wrong address
6.
Thefts of Inventory
3.0 Billing
Threats
7. 8. 9.
Threats
10.
Theft of cash
Threats
11. 12.
Loss of Data
Poor performance