Accounting Information System 12

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CHAPTER 2

* Overview of Business Processes

SUGGESTED ANSWERS TO DISCUSSION QUESTIONS

2.1 Table 2-1 lists some of the documents used in the revenue, expenditure, and human resources cycle. What kinds of input or output documents or forms would you find in the production (or conversion) cycle?

Students will not know the names of the documents but they should be able to identify the tasks about which information needs to be gathered. Here are some of those tasks:

* Requests for items to be produced
* Documents to plan production
* Schedule of items to be produced
* List of items produced, including quantity and quality</inst></para></question><question id="ch02ques02" label="2.2"> * Form to allocate costs to products

* Form to collect time spent on production jobs
* Form requesting raw materials for production process * Documents showing how much raw materials are on hand * Documents showing how much raw materials went into production * List of production processes

* List of items needed to produce each product
* Documents to control movement of goods from one location to another

2.2With respect to the data processing cycle, explain the phrase “garbage in, garbage out.” How can you prevent this from happening?

When garbage, defined as errors, is allowed into a system that error is processed and the resultant erroneous (garbage) data stored. The stored data at some point will become output. Thus, the phrase garbage in, garbage out. Data errors are even more problematic in ERP systems because the error can affect many more applications than an error in a non-integrated database.

Companies go to great lengths to make sure that errors are not entered into a system. To prevent data input errors:

* Data captured on source documents and keyed into the system are edited by the computer to detect and correct errors and critical data is sometimes double keyed. * Companies use turnaround documents to avoid the keying process. * Companies use source data automation devices to capture data electronically to avoid manual data entry with its attendant errors. * Well-designed documents and screens improve accuracy and completeness by providing instructions or prompts about what data to collect, grouping logically related pieces of information close together, using check off boxes or pull-down menus to present the available options, and using appropriate shading and borders to clearly separate data items. * Data input screens are preformatted to list all the data the user needs to enter. * Prenumbered source documents are used or the system automatically assigns a sequential number to each new transaction. This simplifies verifying that all transactions have been recorded and that none of the documents has been misplaced. * The system is programmed to make sure company policies are followed, such as approving or verifying a transaction. For example, the system can be programmed to check a customer’s credit limit and payment history, as well as inventory status, before confirming a sale to a customer.

2.3</inst><para>What kinds of documents are most likely to be turnaround documents? Do an internet search to find the answer and to find example turnaround documents.

Documents that are commonly used as turnaround documents include the following:

* Utility bills
* Meter cards for collecting readings from gas meters, photocopiers, water meters etc * Subscription renewal notices
* Inventory stock cards
* Invoices
* Checks (banks encode account info on the bottom of checks) * Annual emissions inventory forms (http://www.deq.state.ok.us/aqdnew/Emissions/TurnAroundDocs.htm) * Adult Literary...
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