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Problem 3.2
Employees at the Dewey Construction Company enter the work they perform on jobtime tickets. Most are working on. Every night the job-time ticket data for that day is sent electronically to company headq A few construction sites are so remote that employees still fill out paper job-time tickets. These tickets
Payroll is processed weekly. The job-time tickets are used to update the payroll database as well as the pay in the employee’s bank account. Payments are made to government tax bodies and the company h also produces pay stub data that is stored in a payroll transaction file that is accessible to employees ov REQUIRED a. Prepare a system flowchart for Dewey Construction Company’s payroll processing. b. Prepare a BPD for Dewey Construction Company’s payroll processing. Answer Following are the two different flowchart for the Dewey Construction Company. a. Below is a system flowchart for Dewey Construction Company’s payroll processing
View job-time ticket form
Enter job-time ticket data
Payroll summary report
Weekly: Update payroll, work in process, & payroll transaction databases, disburse funds, print reports
Disburse Funds
Employee Payments
Government Payments
401K company Payments
Work in process database
Payroll database
Payroll transaction file
b. Below is a BPD for Dewey Construction Company’s payroll processing.
Employee
Activities Performed
Job Sites
Enter job-time tickets
Express mail Weekly paper job-time tickets
Data Processing
Process jobtime tickets
Update payroll database, work in process database, payroll transaction file
Payroll Supervisor
Employees
Access payroll data using Internet
n jobtime tickets. Most construction sites have data input terminals that employees use to enter the time they start and stop work and th nically to company headquarters where it is stored until payroll is processed.
me tickets. These tickets are express mailed weekly to company headquarters where they are scanned and processed.
database as well as the work-in-process database. Since all employees are paid electronically, no checks are printed; instead, the payroll s dies and the company handling the employee’s and the company’s 401K plan contributions. All disbursements are accompanied by a repo essible to employees over the internet. An electronic summary payroll report is created and sent to the payroll supervisor.
Remote location job-time ticket
Express mail weekly to headquarters
Scan job time tickets
Scan job time tickets
View payroll data
Payroll transaction file
roll ork in abase, saction
Employee query
Enter job-time Remote tickets daily Location
Disburse funds to employees, government, 401K company
Review summary payroll report
Create and send summary payroll report
Review summary payroll report
art and stop work and the job code that represents the project they
ed; instead, the payroll system deposits an employee’s net e accompanied by a report summarizing the disbursement. The system
Problem 3.3 At ANGIC Insurance Company begins processing casualty claims when the claims department receives a notice of loss from a claimant. The claims department prepares and sends the claimant four copies of a proof-of-loss form on which the claimant must detail the cause, amount, and other aspects of the loss. The claims department also initiates a record of the claim, which is sent with the notice of loss to the data processing department, where it is filed by claim number. The claimant must fill out the proof-of-loss forms with an adjuster’s assistance. The adjuster must concur with the claimant on the estimated amount of loss. The claimant and adjuster each keep one copy of the proof-of-loss form. The adjustor files his copy numerically. The adjustor sends the first two copies to the claims department. Separately, the adjuster submits a report to the claims department, confirming the estimates on the claimant’s proof-of-loss form. The claims department authorizes a payment to the claimant, forwards a copy of the proof-of-loss form to data processing, and files the original proof-of-loss form and the adjuster’s report alphabetically. The data processing department prepares payment checks and mails them to the customers, files the proof-of-loss form with the claim record, and prepares a list of cash disbursements, which it transmits to the accounting department where it is reviewed. REQUIRED a. Prepare a document flowchart to reflect how ANGIC Insurance Company processes its casualty claims. b. Prepare a BPD to reflect how ANGIC Insurance Company processes its casualty claims. Answer Following are the two different flowchart for the ANGIC Insurance Company.
a. Below is a document flowchart to reflect how ANGIC Insurance Company processes its casualty claims
ADJUSTER
CLAIMS DEPARTMENT
From claimant
Proof of LossProof Form of Loss
1
START
From Claimant
2 3 4
Notice of Loss
Prepare proof of loss form, claim record
Prepare proof of loss form, claim record
Proof of LossProof Form of Loss
4
Proof of Proof of Loss
1
2
Loss
Notice of Loss
3 4
Assist claimant with form
Prepare Separate Report
Claim Record
Adjuster’s Report
To Claimant Adjuster’s Report
Proof of LossProof of Loss
1
Proof of Proof of Loss
1
2
Proof of Loss
1
Authorize Claim Payment
2
Loss
3 4
Adjuster’s Report
N To Claimant
A
b. Below is a BPD to reflect how ANGIC Insurance Company processes its casualty claims.
Employee Claims Department
Activities Performed From Claimant Receive notice of loss
Data Processing Department
Prepare proof of loss form, send to claimant
Initiate record of claim
Receive notice of loss & record of claim
Recei authori proofloss
loss Data Processing Department
Adjustor
Claims Department
Accounting
send to claimant
claim
Receive notice of loss & record of claim Help claimant complete proofof-loss, agree on loss amount
Prepare adjuster report
Receive proofof-loss, adjustor report
Authorize payment to claimant
Recei authori proofloss
laims department
imant must ment also initiates
ss. The claimant
ming the estimates
res payment
accounting
ocesses its casualty claims.
processes its casualty claims.
DATA PROCESSING
Notice of Loss
Prepare proof of loss form, claim record
Prepare proof of loss form, claim record
Notice of Loss Claim Record
Adjuster’s Report
Authorize Claim Payment
Notice of Loss Claim Record
Proof of Loss
2
N
Proof of Loss
2
Prepare Check & Disbursement List
Disbursement List
Accounting Adjuster’s Report
Check
To Claimant
ualty claims.
Initiate record of claim
otice & laim
Receive authorized proof-ofloss
Prepare & disburse payment check
Prepare cash disbursements list
claim
otice & laim
Receive authorized proof-ofloss
Prepare & disburse payment check
Authorize payment to claimant
Review cash disbursement list
Prepare cash disbursements list
Problem 3.4 Beccan Company is a discount tire dealer operating 25 retail stores in a large metropolitan area. The company purchases all tires and related supplies using the company’s central purchasing department to optimize quantity discounts. The tires and supplies are received at the central warehouse and distributed to the retail stores as needed. The perpetual inventory system at the central facility maintains current inventory records, designated reorder points, and optimum order quantities for each type and size of tire and other related supplies. Beccan has a state-of-the-art computer system and uses the following five documents in its inventory control system. Retail stores requisition. The retail stores electronically submit a retail store requisition to the central warehouse when they need tires or supplies. The warehouse shipping clerk fills the orders from inventory and authorizes store deliveries. Purchase requisition. The system notifies the inventory control clerk when the quantity on hand for an item stored in the central warehouse falls below the designated reorder point and prepares a purchase requisition. The inventory control clerk adjusts the purchase requisition as needed, approves it, and forwards it to the purchasing department. Purchase order. The systems uses the data in the purchase requisition to prepare a purchase order and tentatively select a vendor based on selection criteria built into the system such as price and availability. The purchasing agent adjusts the order or vendor selection as needed, approves it, and e-mails it to the vendor. A copy of the purchase order is sent to accounts payable. Receiving report. For every purchase order, the system prepares a receiving report showing the goods ordered, but not the quantities ordered. When the goods arrive, the receiving clerk enters the date they arrived and the quantity of each item received. The completed receiving report is sent to accounts payable. Invoice. Vendors send Beccan an electronic invoice that shows the goods shipped, their prices, and the total amounts owed. The following departments are involved in Beccan’s inventory control system: Retail stores. Each store counts its inventory at the end of every quarter and reconciles it to the corporate database. On a weekly basis, each store reviews its inventory to determine what to requisition from the central warehouse. When a store runs out of inventory, or dangerously low, it can send a rush order to the warehouse. Inventory control department. Responsible for the maintenance of all perpetual inventory records, including quantity on hand, reorder point, optimum order quantity, and quantity on order for each item carried.
Warehouse department. Maintains the physical inventory of all items carried in stock. All orders from vendors are received (receiving clerk) and all distributions to retail stores are filled (shipping clerks) in this department. Purchasing department. Places all orders for items needed by the company. Accounts payable department. Maintains all open accounts with vendors and other creditors. Accounts payable reviews and reconciles the vendor invoice, purchase order, and receiving report. Any discrepancies are cleared up and the vendor invoice is paid within 10 days of the receipt of goods by electronically transferring the amount due to the vendor’s bank account. REQUIRED a. Prepare a BPD that documents Beccan’s business processes. (CMA Examination, adapted ) Answer
Employee
Activities Performed Weekly & rush orders
Retail Store
Review inventory, place order
Receive goods
Shipping Clerk
Fill orders, authorize delivery, ship goods
Warehouse Inventory Control Clerk
System generates purchase requisition
Adjust & approve purchase requisition
Purchasing Department
Warehouse Receiving Clerk
Finalize & approve system generated PO
Receive system prepared receiving report
Send PO to vendor
Receive goods, complete receiving report: date and quantity
Accounts Payable
Get receiving report & PO
Receive vendor invoice
Quarterly
Count inventory & reconcile to corporate database
Maintain & update perpetual inventory system
Send PO to vendor
From vendor
Receive vendor invoice
Reconcile P.O., receiving report, invoice
Disburse funds to vendors
Problem 3.12 Match the flowchart or DFD segments in the right column to an appropriate description in the left column. DFD’S 1. Statements are prepared and sent to customers from data contained in the accounts receivable data store. 2. A vendor sends a sales invoice to the accounts payable process. 3. The cash receipt process updates the cash receipts data store. FLOWCHARTS 4. A 2-part check is manually prepared from data on a vendor invoice. 5. The system prepares a check that is mailed to the customer. 6. A report is prepared from data stored on magnetic tape.
7. Billing data are entered into a system from a terminal and used to update both the sales order data base and the 8. Data from a cancelled paper invoice are used to update the cash disbursements file. 9. The system prepares two copies of a sales order; one copy is sent to the customer and the other is filed. 10. An accounts receivable aging report is prepared from the accounts receivable master file and the cash receipts
on in the left column. Answer
ts receivable data store.
B C A
G I F sales order data base and the customer data base.
D J
and the other is filed.
H
ster file and the cash receipts master file.
E
CASE 3-1 Dub 5 Answer Level 0 DFD for Dub 5:
Order 1.0 Credit Review
Customer
Credit file
Order Rejection Approved orders 2.0 Enter customer orders
Customer
Inventory
Open Orders
3.0 Check Inventory & Prepare Packing Slip
Warehouse
Packing Slip
4.0 Prepare Invoice
Invoice Copy
Accounting
Invoice
Invoice Customer
Level 1 DFD for Dub 5:
Customer Order Credit File
1.1
Customer Order Credit File
1.1 Check Credit
Customer Account
Approved Order
Rejected Order Customer 1.2 Check Current Order against Credit Limit
Over Credit Limit Notice
Credit Application
Rejected Order Lacking Credit Approval
1.3 Prepare Credit Application
Dub 5 Business Processing Diagram Employee
Activities Performed
Order Processing Clerk
From Customer
Receive Customer Order
Credit Debt
Customer not approved for credit: OR order exceeds credit limit
No
Yes No
Customer Approved for Credit?
Enter Customer Order; Update Customer File
Sufficient Inventory Yes
Prepare Packing Slip
Send customer credit application, notify order shipped when credit approved
Yes
Notify customer: order shipped when payment received Warehouse
Billing
Ship goods to customer Prepare customer invoices;
shipped when payment received Warehouse
Billing
Ship goods to customer
Prepare customer invoices; send copies to customer, orde processing, accounting
Accounting
Update Accounts Receivable
Warehouse
Customer
Customer
redit Application
Credit ation
Sufficient Inventory
r
No
Notify customer of insufficient inventory
Yes
r Prepare Packing Slip
File Invoice
ustomer credit ation, notify hipped when it approved
ustomer: order when payment eceived Ship goods to customer Prepare customer invoices;
Place notice in file:
when payment eceived Ship goods to customer Prepare customer invoices; send copies to customer, order processing, accounting
Update Accounts Receivable
Place notice in file: customer invoice sent