Solution manual accounting information 11e by romney ch03

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CHAPTER 3
SYSTEMS DEVELOPMENT AND DOCUMENTATION TECHNIQUES
SUGGESTED ANSWERS TO DISCUSSION QUESTIONS
3.1

Data Flows: merchandise, payment, cash and register tape
Date Source: customer
Processes: capture sales and payment, give cash and register tape to manager
Storage: sales file (register tape), cash register

3.2

It is usually not sufficient to use just one documentation tool. Every tool documents a
uniquely important aspect of a given information system. For example, system
flowcharts are employed to understand physical system activities including inputs,
outputs, and processing. In contrast, data flow diagrams provide a graphic picture of the
logical flow of data within an organization.
Each alternative is appropriate for a given aspect of the system. As a result, they work
together to fully document the nature and function of the information system.

3.3

Similar design concepts include the following:
Both methods require an initial understanding of the system before actual
documentation begins. This insures that the system is properly represented by the
diagram.
Both measures require the designer to identify the elements of the system and to
identify the names and relations associated with the elements.
Both methods encourage the designer to flowchart only the regular flows of

information and not to be concerned with unique situations.
Both approaches require more than one “pass” through the diagramming or
flowcharting process to accurately capture the essence of the system.
The product of both methods is a model documenting the flow of information and/or
documents in an information system. Both documentation methods are limited by the
nature of the models they employ, as well as by the talents and abilities of the designer to
represent reality.

3-1
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Ch. 3: Systems Development and Documentation Techniques

3.4

The major flowcharting symbols and their respective categories are shown in Fig. 3.8 in
the text.
With respect to how the symbols are used, student answers will vary. Possible examples
include the following:
Input/Output Symbols
Document: an employee time card, a telephone bill, a budget report, a parking ticket,
a contract
Display: student information monitors, ATM monitors, the monitor on your
microcomputer.
Manual input: cash registers, ATM machines

Processing Symbols
Processing: processing a student payroll program, assessing late fees
Manual operation: writing a parking ticket, preparing a report, collecting and
entering student payments
Storage Symbols
Magnetic disk: alumni information data base, a report stored on your PC hard disk
Magnetic tape: archival student information
On-line storage: a student information data base or an airline reservation data base
stored on-line.
File: purchase order file for a department, a student housing contract file
Flow (Miscellaneous)
Communication link: a telephone linkage that connects you to Prodigy or some
other on-line data base.

3-2
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Accounting Information Systems

SUGGESTED ANSWERS TO THE PROBLEMS
3.1

Assorted Flowcharting Segments:
a.
Formatted: Font: 12 pt
Formatted: Font: 12 pt

Transactions

Old
Master
File

File
Update

New
Master
File

b.
Formatted: Font: 12 pt
Formatted: Font: 12 pt
Transactions

File
Update

Data
base

c.
Formatted: Font: 12 pt
OCR Source
Documents

Conversion of

Documents to
Tape by OCR

Source
Data

Formatted: Font: 12 pt

d.
Formatted: Font: 12 pt
OCR Source
Documents

Formatted: Font: 12 pt
Update
Data base

Data
base

3-3
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Ch. 3: Systems Development and Documentation Techniques

3.1 (continued)

Assorted Flowcharting Segments

e.
Formatted: Font: 12 pt
Formatted: Font: 12 pt

Data
File

Report

Report
Generation

f.
Formatted: Font: 12 pt
Source
Documents

Store data on disk

Data File

Key Data

Formatted: Font: 12 pt

g.
Formatted: Font: 12 pt

Invoices

Sort

Invoices

File

h.

3-4
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Formatted: Font: 12 pt


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Accounting Information Systems

Formatted: Font: 12 pt
Terminal

Online
Processing
System

Formatted: Font: 12 pt
Data
base

Source
Data

3.1 (continued)

Assorted Flowcharting Segments

i.
Formatted: Font: 12 pt

Internal
Hard
Drive

Scheduled
Automatic
Backup

External
Hard
Drive

Formatted: Font: 12 pt

j.
Formatted: Font: 12 pt
Formatted: Font: 12 pt

Display

Query
Customer
Sales Data

Enter Query

3-5
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Database


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Ch. 3: Systems Development and Documentation Techniques

3.1 (continued)

Assorted Flowcharting Segments

k.

3-6
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Accounting Information Systems

Formatted: Font: 12 pt
Formatted: Font: 12 pt

Payroll
Transaction
File

Time Card

Record time card data on the
payroll transaction file and
match to wage data
maintained on the payroll
master file

Enter Time
Card Data

Payroll
Master File

3.1 (continued)

Assorted Flowcharting Segments

l.
3-7
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Ch. 3: Systems Development and Documentation Techniques

Formatted: Font: 12 pt
Formatted: Font: 12 pt

Purchase Order
(electronic)

To Vendor

Access Price List, create
electronic purchase order
& print a paper backup
copy

Price
Data

Purchase Order
(paper)

A

m.
Formatted: Font: 12 pt

Update online
airline reservation

from home
computer

Revise reservation
data on web-based
airline reservation
system

3-8
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Reservation
File


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Accounting Information Systems

3.2

Happy Valley Utility Company

a.

Billing operations
Formatted: Font: 12 pt
Formatted: Font: 12 pt

Customer

Master
File

Meter Form
Preparation

Meter Forms

Sort By
Cust #

Enter
Current
Reading

Completed
Meter Forms

Mark-Sense
Document
Reader

Customer
Meter
Data

Customer
Meter
Data

Customer
Master
File

File Update
and
Billing

Error List
& Summary
Report

Customer
Bills

Mail to
Customers

3-9
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Ch. 3: Systems Development and Documentation Techniques

3.2

b.

Customer payments processing
Checks

Remittance
Stubs

Correct
Stubs

OCR
Document
Reader

Formatted: Font: 12 pt

Compare
&
Separate

Checks

To
Cashier

Incorrect
Stubs

List of
Other
Receipts

Type
Correct
Stubs

Type
Correct
Stubs

Corrected
Stubs

Corrected
Stubs

Report of
Past-Due
Accounts

Payments
Posting
Run

Error List
& Summary
Report

Customer
Master
File

3-10
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Formatted: Font: 12 pt


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Accounting Information Systems

3.3

Payroll Processing for Dewey Construction Company:
Formatted: Font: 12 pt

Job Time
Tickets

Key to
Tape
Encodings

Job Time
Records
Tape

Payroll
Master
File

Work in
Process
Master
File

Payroll
Processing
System

Earnings
Statement
Payroll
Register

Paycheck

3-11
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Error
Transactions
and Summary


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3.4

Document Flowchart: Insurance Claims Processing

ADJUSTER

CLAIMS DEPARTMENT

Formatted: Font: 12 pt

DATA PROCESSING

Notice of Loss

START
From
Claimant

1
Proof of
Loss Form

Prepare
proof of
loss, claim
recored

From
Claimant

2
3
4

1
Proof of
Loss Form

Notice of Loss

2

Notice of Loss
Claim Record

3
Claim Record

4
Prepare
Separate
Report

Assist
Claimant
with Form

2
Proof of
Loss

N
Adjuster's Report

To
Claimant
Adjuster's Report

1

1
Proof of
Loss

Proof of
Loss

2

2

Authorize
Claim
Payment

3

2
Proof of
Loss

Prepare
Check &
Disbursement

list

Disbursement
List

4
To Accounting
1

Adjuster's Report

Proof of
Loss

To
Claimant

Check

A
To
Claimant

Formatted: Font: 12 pt

3-12
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N

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3.5
Adapted from the June 1980 CMA Exam (Part 5, Question 2) Note: this flowchart does
not follow the conventions discussed in the chapter. When the authors use this problem they
have the students critique the CMA exam solution, based upon the conventions discussed in
Focus 3.2.

3-13
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Ch. 3: Systems Development and Documentation Techniques

Formatted: Font: 12 pt

3.6

a.

Context Diagram for the payroll processing system at No-Wear Products
3-14
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Formatted: Font: 12 pt

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Accounting Information Systems

Formatted: Font: 12 pt

Employee
Time Card Data
Operating
Documents

Payroll
Processing
System

Employee
Paychecks

Internal
Reports

Management

Human
Resources
Department
Personnel Data
Withholding
Reports

Governmental
Agencies

3-15
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Ch. 3: Systems Development and Documentation Techniques

3.6

a. (continued.)
Level 0 Data Flow Diagram for the payroll processing system at No-Wear Products.
Formatted: Font: 12 pt

Operating
Departments

Time
Card
Data

Formatted: Font: 12 pt

Human Resources
Department

Personnel

Changes
1.0
Process
Employee
Timecards

2.0
Update
Payroll File

Payroll File

4.0
Generate
Payroll
Reports

3.0
Generate
Paycheck
Internal
Reports

Employee

Withholding
Reports

Pay
check

Management

3-16
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Governmental
Agencies


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Accounting Information Systems

3.6

b.

Document Flowchart for the payroll processing system at No-Wear Products
Formatted: Font: 12 pt

No-Wear Products-Payroll
Employees in Functional
Department

Formatted: Font: 12 pt

Payroll

Time Card

Record Time Data

Record
Time

Completed Time
Card

Enter Time Data

Process Payroll
Changes

Completed Time
Card

Enter Payroll
Changes

Payroll File

From Human
Resource Dept

Payroll Changes

N

Process Payroll,
Prepare Checks

and Reports

Paycheck

N

Employee

Management
Report

Management

Federal Tax
Report

Stat Tax Report

3-17
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Goverrnment


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Ch. 3: Systems Development and Documentation Techniques

3-18
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Accounting Information Systems

3.7

a.

Context Diagram of S&S Accounts Payable
Formatted: Font: 12 pt
Formatted: Font: 12 pt

Purchasing

Receiving
Purchase Order
Receiving Report

S&S Accounts Payable
Invoice

Vendor

Accounts Payable
Report

Payment &
Remittance Advice

3-19
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Management


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Ch. 3: Systems Development and Documentation Techniques

3.7

a. (continued.)

Level 0 Data Flow Diagram of S&S Accounts Payable
Formatted: Font: 12 pt
Formatted: Font: 12 pt

Vendor

Purchasing

Receiving

Invoice
Purchase Order

1.0
Record Payable

2.0
Collect & Store
Purchase Orders &
Receiving Reports

Receiving Report

Purchase Orders
Accounts
Payable

Vendor Invoices

Receiving
Reports

Cash
Disbursements
Journal

3.0
Make Payment

Accounts Payable
Report

4.0
Prepare
Management

Reports

Payment &
Remittance Advice

Paid
Invoices

Management

3-20
© 2009 Pearson Education, Inc. Publishing as Prentice Hall

Vendor


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Accounting Information Systems

3.7

b.

Document Flowchart of S&S Accounts Payable

Formatted: Font: 12 pt

S&S Accounts Payable

Formatted: Font: 12 pt
Accounts Payable

Controller

From Purchasing

From Receiving

From Vendor

A

Purchase Order

Receiving Report

Vendor Invoice

Purchase Order

Owner/Manager
Purchase Order

B

Receiving Report
Invoice

Receiving Report

Check 2

Invoice
A

A

Record
Accounts
Payable

Check 1

Accounts
Payable
Ledger

Review
and Sign
Checks
Prepare
Vendor
Checks

Vendor Invoice

Match Purchase
Order,
Receiving

Report,
Invoice

Check 1

Prepare
Monthly
Accounts
Payable
Cash
Disburseme
nts Journal

A
Accounts Payable
Report

To Vendor

Purchase Order
Receiving Report
C

D

Purchase Order

Invoice

Receiving Report

Check 1

Invoice
Purchase Order
Purchase Order

Check 1

Receiving Report

Receiving Report
Invoice

C

Check 2

Invoice
Accounts Payable
Report

Check

D

B
A
A
Review

Accounts
Payable
Report

3-21
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D


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Ch. 3: Systems Development and Documentation Techniques

3.8
a.
Company:

Context Diagram for the Acquisition/Payment System at Oriental Trading

Formatted: Font: 12 pt

Purchase Requisition
Purchase Order

Vendor

Vendor Acknowledgement

Formatted: Font: 12 pt

Inventory
System

Acquisition/
Payment
System

Receiving Payment

Purchase Invoice

Vendor Payment

3-22
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Accounting Information Systems

3.8

a. (continued) Level 0 Data Flow Diagram: Acquisition/Payment System at Oriental
Trading:

3-23
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Ch. 3: Systems Development and Documentation Techniques

Formatted: Font: 12 pt

Inventory
File

Formatted: Font: 12 pt

Vendor
File

1.0
Prepare
Purchase
Order &
Notification
Purchase Order
Purchase Requisition

Vendor

Vendor
Acknowledgement

Inventory
System

P.O. Notification
Vendor
Invoice

Receiving Report
2.0
Update
Accounts
Payable

Accounts
Payable
Master
File
Check

Payment Authorization

3.0
Pay Vendor
General
Ledger

3-24
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Accounting Information Systems

3.8
b.
Company:

Document Flowchart for the Acquisition/Payment System at Oriental Trading

Formatted: Font: 12 pt

Oriental Trading Acquisition/Payment System

Formatted: Font: 12 pt
Purchasing

Accounts Payable

B

From Inventory
Purchase
Requisition

Accounting Department

D

Inventory
File

Prepare Purchase
Order

A

From Receiving
Department

From Vendor

Purchase Order
Notification

Receiving Report

Invoice

D

D

D

Enter Purchase
Requisition

Payment
Authorization

Enter payment

Authorization

Vendor
File

Purchase Order

Match Purchase
Order, Receiving
Report, and
Invoice. Prepare
Payment
Authorization

D

Prepare Check,
Update Accounts
Payable and
General Ledger

Payment
Authorization

B
To Vendor

Check

From Vendor

Purchase Order

D

Vendor
Acknowledgment

Receiving Report
Invoice

Enter Vendor
Acknowledgment

Prepare Purchase
Order Notification

Purchase Order
Notification

Enter Accounts
Payable Data for
Update

To Vendor

Update Accounts
Payable Master
File

D

Accounts
Payable Master
File

A

3-25
© 2009 Pearson Education, Inc. Publishing as Prentice Hall

General
Ledger Master
File