Accounting Information Systems
10th Edition
ISBN: 9781337619202
Author: Hall, James A.
Publisher: Cengage Learning,
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Chapter 2, Problem 19P
To determine
Prepare the system flowchart for the cash receipts procedure.
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Subject: Accounting Information SystemQuestion: What would be the correct system flowchart for this given process: Accounts Payable and Cash Disbursement Process:Vendors send invoices to the AP department where they are reviewed and approved for payment. Once approved, the invoice and a cash disbursement voucher are sent to the cash disbursement department, where a check is prepared and sent to the vendor. A copy of the check, the invoice, and the voucher are returned to the AP department and filed.
Good internal controls include upon receiving checks from customers by mail, a responsible employee should
A. Add the checks to the daily cash summary
B. Verify that check is supported by prenumbered sales invoices
C. Prepare a duplicate listing of checks received
D. Record the checks in the cash receipts journal
Prepare a flowchart of a cash receipts procedures described in the problem.
Chapter 2 Solutions
Accounting Information Systems
Ch. 2 - Prob. 1RQCh. 2 - Prob. 2RQCh. 2 - Prob. 3RQCh. 2 - Prob. 4RQCh. 2 - Name the major subsystems of the revenue cycle.Ch. 2 - Prob. 6RQCh. 2 - Name the two types of journals.Ch. 2 - Distinguish between a general journal and journal...Ch. 2 - Name the two types of ledgers.Ch. 2 - Prob. 10RQ
Ch. 2 - Prob. 11RQCh. 2 - Prob. 12RQCh. 2 - Prob. 13RQCh. 2 - Prob. 14RQCh. 2 - Prob. 15RQCh. 2 - Prob. 16RQCh. 2 - Prob. 17RQCh. 2 - Prob. 18RQCh. 2 - Prob. 19RQCh. 2 - Distinguish between batch and real-time...Ch. 2 - Prob. 21RQCh. 2 - Prob. 22RQCh. 2 - Prob. 23RQCh. 2 - Prob. 24RQCh. 2 - Prob. 25RQCh. 2 - Prob. 26RQCh. 2 - Prob. 27RQCh. 2 - Prob. 28RQCh. 2 - Prob. 29RQCh. 2 - Prob. 30RQCh. 2 - Prob. 31RQCh. 2 - Prob. 32RQCh. 2 - Prob. 33RQCh. 2 - Prob. 34RQCh. 2 - Prob. 35RQCh. 2 - Prob. 36RQCh. 2 - Prob. 37RQCh. 2 - Prob. 38RQCh. 2 - Discuss the flow of cash through the transaction...Ch. 2 - Explain whether the cost accounting system...Ch. 2 - Prob. 3DQCh. 2 - Prob. 4DQCh. 2 - Would the writing down of obsolete inventory be...Ch. 2 - Are both registers and special journals necessary?Ch. 2 - Discuss the relationship between the balance in...Ch. 2 - Prob. 8DQCh. 2 - Prob. 9DQCh. 2 - Are large batch sizes preferable to small batch...Ch. 2 - Prob. 11DQCh. 2 - Prob. 12DQCh. 2 - Prob. 13DQCh. 2 - Prob. 14DQCh. 2 - Prob. 15DQCh. 2 - Prob. 16DQCh. 2 - Prob. 17DQCh. 2 - Prob. 18DQCh. 2 - Prob. 19DQCh. 2 - Prob. 1MCQCh. 2 - Prob. 2MCQCh. 2 - Prob. 3MCQCh. 2 - Prob. 4MCQCh. 2 - Prob. 5MCQCh. 2 - Prob. 6MCQCh. 2 - Which of the following is NOT a true statement? a....Ch. 2 - Which of the following is true of the relationship...Ch. 2 - Prob. 9MCQCh. 2 - Prob. 10MCQCh. 2 - Prob. 11MCQCh. 2 - Prob. 12MCQCh. 2 - Prob. 13MCQCh. 2 - Prob. 14MCQCh. 2 - Prob. 15MCQCh. 2 - Prob. 16MCQCh. 2 - Prob. 17MCQCh. 2 - Prob. 18MCQCh. 2 - Prob. 19MCQCh. 2 - The production subsystem of the conversion cycle...Ch. 2 - Prob. 21MCQCh. 2 - Prob. 22MCQCh. 2 - Prob. 1PCh. 2 - Prob. 2PCh. 2 - Prob. 3PCh. 2 - Prob. 4PCh. 2 - Prob. 5PCh. 2 - Prob. 6PCh. 2 - Prob. 7PCh. 2 - Prob. 8PCh. 2 - Prob. 9PCh. 2 - Prob. 10PCh. 2 - Prob. 11PCh. 2 - Prob. 12PCh. 2 - Prob. 13PCh. 2 - Prob. 14PCh. 2 - Prob. 15PCh. 2 - Prob. 16PCh. 2 - Prob. 17PCh. 2 - Prob. 18PCh. 2 - Prob. 19PCh. 2 - The following describes the payroll procedures for...Ch. 2 - Prob. 21PCh. 2 - Prob. 22PCh. 2 - Prob. 23PCh. 2 - Prob. 24PCh. 2 - Prob. 25PCh. 2 - Prob. 26PCh. 2 - CODING SCHEME Devise a coding scheme using block...
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- What steps are followed in posting cash receipts from the general journal to the accounts receivable ledger?arrow_forwardHow often do we post the cash column in the cash receipts journal to the subsidiary ledger?arrow_forwardCredit is granted by a credit department. Once shipment occurs and is recorded in the sales journal, all shipping documents are electronically marked “recorded” by the accounting staff. Sales returns are presented to a sales department clerk, who prepares a prenumbered receiving report. Cash receipts received in the mail are received by a secretary with no record-keeping responsibility. Cash receipts received in the mail are forwarded unopened with remittance advices to accounting. The cash receipts journal is prepared by the treasurer’s department. Cash is deposited weekly. Statements are sent monthly to customers. Write-offs of accounts receivable are approved by the controller. The bank reconciliation is prepared by individuals independent of cash receipts record keeping. For each of the preceding 10 items, indicate whether the item represents an internal control strength for the sales and collection cycle. internal control deficiency for the sales and collection cycle. For…arrow_forward
- Internal Control of Cash Receipts The procedures used for over-the-counter receipts are as follows. At the close of each day's business, the sales clerks count the cash in their respective cash drawers, after which they determine the amount recorded by the cash register and prepare the memo cash form, noting any discrepancies. An employee from the cashier's office counts the cash, compares the total with the memo, and takes the cash to the cashier's office. a. Identify the weak link in internal control. An employee from the cashier's office counts the cash and compares the total with the memorandum. An employee from the cashier's office takes the cash to the cashier's office. An employee from the treasurer's office takes the cash to the cashier's office. The sales clerks should have access to the cash register tapes. The sales clerks should not have access to the cash register tapes. b. Who should remove the cash register tapes from the register? A teller from the bank An…arrow_forwardInternal Control of Cash Receipts The procedures used for over-the-counter receipts are as follows: At the close of each day’s business, the salesclerks count the cash in their respective cash drawers, after which they determine the amount recorded by the cash register and prepare the memo cash form, noting any discrepancies. An employee from the cashier’s office counts the cash, compares the total with the memo, and takes the cash to the cashier’s office. a. Identify the weak link in internal control. b. Who should remove the cash register tapes from the register?arrow_forwardUse the following flowchart of the cash receipts subsystem for Rockmart Manufacturing for questions 4-8. Customer checks Customer remittance advices Separate remittance advices and checks Customer remittance advices Customer checks Prepare tape Customer checks Paper tape Assemble into batches Batches of remittance advices B Customer remittance advices Paper tape Remittance advices Error listing and D summary information Daily accounts receivable run E A 4. The customer checks accompanied by the control tape (refer to symbol A) would be: a. forwarded daily to the billing department for deposit. b. taken by the mail clerk to the bank for deposit daily. c. forwarded to the treasurer for deposit daily. d. accumulated for a week and then forwarded to the treasurer for deposit weekly. [CMA adapted] 5. The appropriate description that should be placed in symbol B would be: a. keying and verifying. b. collate remittance advices. 6. The next action to take with the customer remittance advices…arrow_forward
- Refer to the system flowchart below and identify the internal control risks represented in it:arrow_forwardHi! What is the data flow diagram of this process? Vendors send invoices to the AP department where they are reviewed and approved for payment. Once approved, the invoice and a cash disbursement voucher are sent to the cash disbursement department, where a check is prepared and sent to the vendor. A copy of the check, the invoice, and the voucher are returned to the AP department and filed.arrow_forwardRead and analyze each of the transactions and explain whether they are considered improper segregation of functions? Explain your answer. ed from ro rata hich person The billing department prepares the customers' invoices and records the sale in the sales journal. a. b. Mailroom clerk open cash receipts envelopes from customers and also prepares the remittance list. ses Accounting clerk receives journal vouchers from various departments and post to the GL accounts. ensation C. does and 00.00 d. The sales department approves sales credit memos as the result of product returns and forwards these to the AR department, which adjusts the customer accounts to reflect the return. IIarrow_forward
- Match each of the following cash receipt activities to the internal control principle to which it bestrelates. Enter the appropriate letter in the space provided.1. A list of checks received in the mail is prepared.2. Total cash receipts are compared to the amounton the bank deposit slip.3. A password is required to open the cash register.4. Price changes at the checkout require a manager’sapproval.5. Cashiers are required to count the cash in theirregister at the beginning and end of each shift.A. Establish responsibilityB. Segregate dutiesC. Restrict accessD. Document proceduresE. Independently verifyarrow_forwardWhich of the following is an internal control guideline for better management of cash receipts? a.Endorse checks immediately upon receipt with the stamp "For Receipt Only". b.Maintain separation of duties between cash handling and cash recording. c.A bookkeeper should be designated to open all the mail in a company. d.Post cash receipts to the Accounts Payable account as soon as possible.arrow_forwardCash receipts should be deposited on the day of receipt or the following business day. Select the most appropriate audit procedure to determine that cash is promptly deposited. a. Review the functions of cash receiving and disbursing for proper separation of duties. b. Review cash register tapes prepared for each sale. c. Review the functions of cash handling and maintaining accounting records for proper segregation of duties. d. Compare the daily cash receipts totals with the bank depositsarrow_forward
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