ACCOUNTING

INFORMATION SYSTEM
The Expenditure Cycle
By :
Retno Ladyta Pratiwi 1510534013
Ratu Shavira 1610532025
Muhammad Agung 1710533029
Expenditure Cycle
(Purchase Processing System)
◦ Walker Books starts its expenditure cycle from Purchasing Department that monitors in computer all
levels of available books, and listing its current inventory. After that, the agent manually makes four hard
copies of the purchase order. The first copy is sent to account payable, the second one is sent to the
vendor, the third one is sent to the receiving department, and the fourth one is filed in the department.
Vendors will generally ship the product five business days of the order received. When all goods arrive at
receiving department, the corresponding packing slip always accompanies those goods. The receiving
department clerk unloads all goods and reconciles the packing slips within the purchase order. After
they unload the goods, clerk manually makes three hard copies of receiving report. One copy goes
with the goods to werehouse, another is sent back to the purchasing department, and the final copy is
sent to the receiving department. At the werehouse, the copy is filed while the goods are stored to the
shelves. In the purchasing department, clerk receives this copy of the receiving report and files it with
the purchase orders.
◦ While the account payable department receives all purchase order, it would be
temporarily filed until the respective invoices arrives from vendors. Upon receipt
invoice, the account payable clerk removes the purhase order from the temporary file
and reconciles the two documents. After that, clerk manually reports the liability in the
hard copy accounts payable subsidiary ledger. Finally, the clerk files the purchase
order and invoice in the account payable department. At the end, clerk prepares a
hardcopy journal vouchers and sends it to the general ledger department. Once the
general ledger department receives the vouchers, clerk examines it whether any errors
and enters all relevant data into the department PC, so they could update the
appropriate digital general ledger accounts.
Purchasing System Flowchart
Purchasing system DFD
Analyze Internal control weaknesses and Suggestion
for improvement

1 .Segregation of duties & Independent verification

◦ -weaknesses .the receiving dept. clerk unloads all the goods and
reconcile the packing slips within the purchase order as well.if there
are missing items during the goods unloading process, the clerk
could manipulate the reconciliation report to avoid problems.
◦ --suggest. Independent verificators should be placed in order to
reconcile the packing slips within the purchase order.
2 . Supervision
◦ - weaknesses . all the clerks are working unsupervised
◦ -- suggest. Supervisors should be put in duty to make sure each clerk
to do their duties correctly.
Cash Disbursement

At the Cash Disbursements System, the account payable clerk periodically reviews
all the open account payable file for all due liabilities. In order to maximize returns
on invested cash, yet still take the advantage of vendors discount, and the clerk
will pull the invoice two days before its applicable due date. To finding an open
accounts payable file, as needed of payment, the clerk manually prepares a
check for the amount due the invoice. The hard copy accounts payable ledger is
also being updated by the accounts payable clerk. The check number, dollar
amount, and other pertinent data are manually recorded in the hard copy check
register. After that, check is sent to the cash disbursement department. Finally the
invoice is discarded as it no longer has any relevant information that hasnt
recorded elsewhere. While the cash disbursement clerk receives the unsigned
check, she examines and ensuring that no errors ever made.
Since she already familiar with vendors that deal with Walker Books Company,

she could identify any false vendors of any payment made that seems

excessive. With assuming everything that appears in order, she signs the check

using a signature block displays the name of the assistant in treasurer, named

Tyler Maatthews. Only Mathhew’s signature that could validates a check from

vendor . Once the check is signed by Matthew, it is sent to the supplier directly.

The photocopy of the check is marked as paid and then filed into cash

disbursement department. The clerk then makes a journal voucher, which is sent

to the general ledger department. Once the general ledger department

receives the journal voucher, the clerk examines it for any errors and finally put it

inyo the department PC to update the appropriate digital general ledger

accounts.
Cash Disbursement Flowchart
Cash Disbursement DFD
Analyze Internal control weaknesses and Suggestion for
improvement