Solution manual accounting information systems 12th edition by romney and steinbart CH03

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

Identify the DFD elements in the following narrative: A customer purchases a few
items from a local grocery store. Jill, a salesclerk, enters the transaction in the cash
register and takes the customer’s money. At closing, Jill gives both the cash and the
register tape to her manager.
Data Flows: merchandise, payment, cash and register tape
Data Source: customer
Processes: capture sales and payment data and collect payment, give cash and register tape to
manager
Storage: sales file (register tape), cash register

3.2

Do you agree with the following statement: “Any one of the systems documentation
procedures can be used to adequately document a given system”? Explain.
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.

3-1

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Ch. 3: Systems Development and Documentation Techniques

3.3

Compare the guidelines for preparing flowcharts and DFDs. What general design
principles and limitations are common to both documentation techniques?
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 show 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.

3-2


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Accounting Information Systems

3.4

Your classmate asks you to explain flowcharting conventions using real-world examples.
Draw each of the major flowchart symbols from memory, placing them into one of four
categories: input/output, processing, storage, and flow and miscellaneous. For each symbol,
suggest several uses.
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 paper 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 an on-line data base.

3-3


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Ch. 3: Systems Development and Documentation Techniques

SUGGESTED ANSWERS TO THE PROBLEMS

Prepare flowcharting segments for each of the following operations:

3.1

Assorted Flowcharting Segments:
a.

processing transactions stored on magnetic tape to update a master file stored on
magnetic tape
Transactions

Old
Master
File

b.

File
Update

New
Master
File

processing transactions stored on magnetic tape to update a database stored on a
magnetic disk
Transactions

File
Update

Data
base

c. converting source documents to magnetic tape using a computer-based
optical character reader (OCR)
OCR Source
Documents

Conversion of
Documents to
Tape by OCR

Source

Data

d. processing OCR documents online to update a database on magnetic disk

OCR Source
Documents

Update
Data base

3-4

Data
base


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Accounting Information Systems

3.1 (continued) Assorted Flowcharting Segments
e.

reading data from a magnetic disk into the computer to be printed on a report

Data
File

f.

Report

Report
Generation

using a computer or terminal to key data from source documents to a file stored
on a magnetic disk

Terminal
Data File
Source
Documents
Key Data

g.

manually sorting and filing invoices numerically

Invoices

Sort
Numerically

Invoices

N

3-5

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Ch. 3: Systems Development and Documentation Techniques

3.1 (continued) Assorted Flowcharting Segments
h.

using a terminal to enter source document data and send it to a remote location
where an online processing system records it in a database stored on magnetic
disk

Terminal

Online
Processing
System

Data
base

Source
Data

i.

a scheduled automatic backup of an internal hard drive to an external hard
drive

Internal
Hard

Drive

j.

Scheduled
Automatic
Backup

External
Hard
Drive

using a terminal to query customer sales data maintained on a magnetic disk

Display
Query
Customer
Sales Data

Enter Query

3-6

Database


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Accounting Information Systems

3.1 (continued) Assorted Flowcharting Segments
k.

enter employee hours recorded on time cards in the payroll transaction file
maintained on disk and update wage data maintained on the payroll master file

Payroll
Transaction
File

Terminal

Time Card

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

Enter Time
Card Data

Payroll
Master File

3-7


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Ch. 3: Systems Development and Documentation Techniques

3.1 (continued) Assorted Flowcharting Segments
l.

use a terminal to access a price list maintained on disk to complete a purchase
order. An electronic copy of the purchase order is sent to the vendor and a
backup copy is printed and filed by vendor name

Purchase Order
(electronic)

To Vendor

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

Price
Data

Purchase Order
(paper)

A

m.

update an airline reservation on a Web-based airline reservation system from a

home computer

Request, complete,
and submit an
online reservation
change form

Revise reservation
data on web-based
airline reservation
system

3-8

Reservation
File


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Accounting Information Systems

3.2

Happy Valley Utility Company
a.

Draw a system flowchart of the billing operations, commencing with the
computer preparation of the meter reading forms and ending with the mailing of
customer bills.

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.

Draw a system flowchart depicting customer payments processing, starting with
the mail room operations and ending with the two printed reports.
Checks
Remittance
Stubs

Correct
Stubs

OCR
Document
Reader

Compare
&
Separate

Checks

To
Cashier

Incorrect
Stubs

List of
Other
Receipts

Type

Correct
Stubs

Type
Correct
Stubs

Corrected
Stubs

Corrected
Stubs

Payments
Posting
Run

Report of
Past-Due
Accounts

Error List
& Summary
Report

Customer
Master
File

3-10

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Accounting Information Systems
3.3

Prepare a system flowchart of the process described.
Payroll Processing for Dewey Construction Company:
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

Error
Transactions
and Summary


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Prepare a document flowchart to reflect how ANGIC Insurance Company processes its casualty claims.

3.4

ADJUSTER

CLAIMS DEPARTMENT

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

Notice of Loss

2

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

3-12

N


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3.5

a. Prepare a document flowchart that indicates the interaction and use of these
documents among all departments at Beccan Company’s central facility. It should
provide adequate internal control over the receipt, issuance, replenishment, and
payment of tires and supplies. You may assume that there is a sufficient number of
document copies to ensure that the perpetual inventory system has the necessary
basic internal controls.

b. Using the flowcharting conventions discussed in Focus 3.2, critique the instructor
provided CMA solution. List all the ways the CMA solution violates those
flowcharting guidelines.
Adapted from the CMA Exam. Note: the CMA solution shown does not follow the flowcharting
conventions discussed in the chapter. When the authors use this problem they have the students critique
the CMA exam solution (assignment 3.5b), based upon the conventions discussed in Focus 3.2.

3-13


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Ch. 3: Systems Development and Documentation Techniques

3.6
a.

Prepare a context diagram and level 0 DFD to document the payroll processing
system at No-Wear Products.
Context Diagram for the payroll processing system at No-Wear Products

Employee
Time Card Data
Operating
Documents

Payroll
Processing
System

Employee
Paychecks

Internal
Reports

Management

Human
Resources
Department
Personnel Data
Withholding
Reports

3-14

Governmental
Agencies


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Accounting Information Systems

3.6

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

Operating
Departments

Time
Card
Data

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

3-15

Governmental
Agencies


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Ch. 3: Systems Development and Documentation Techniques

3.6

b. Prepare a document flowchart to document the payroll processing system at No-

Wear Products.
No-Wear Products-Payroll
Employees in Functional

Department

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

3-16

Goverrnment


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Accounting Information Systems

3.7
a.

Prepare a context diagram and a level 0 DFD to document accounts payable
processing at S&S.

Purchasing

Receiving
Purchase Order
Receiving Report

S&S Accounts Payable
Invoice

Vendor

Accounts Payable
Report

Payment &
Remittance Advice

3-17

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

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

3-18

Vendor


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Accounting Information Systems

3.7

b.

Prepare a document flowchart to document accounts payable processing at S&S.

S&S Accounts Payable
Accounts Payable

From Purchasing

From Receiving

Controller

From Vendor

A

Owner/Manager
Purchase Order

B

Receiving Report
Purchase Order

Receiving Report

Invoice

Purchase Order

Vendor 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
Disbursements
Journal

A

To Vendor

Accounts Payable
Report
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

3-19

D


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Ch. 3: Systems Development and Documentation Techniques

3.8
a.

Develop a context diagram and a level 0 DFD of the acquisition/payment system
at Oriental Trading.

Purchase Requisition
Purchase Order

Vendor

Vendor Acknowledgement

Inventory
System

Acquisition/
Payment
System

Receiving Report

Purchase Invoice

Vendor Payment

3-20


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Accounting Information Systems

3.8

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

Inventory
File

Vendor
File

1.0
Prepare
Purchase
Order &
Notification
Purchase Order
Purchase Requisition

Vendor

Vendor
Acknowledgement

Inventory
System

P.O. Notification
Vendor

Invoice

Receiving Report
Receiving Reports

2.0
Update
Accounts
Payable

Purchase Orders

Vendor Invoices
Accounts
Payable
Master
File
Check

Payment Authorization

3.0
Pay Vendor
General
Ledger

3-21


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Ch. 3: Systems Development and Documentation Techniques

3.8

Prepare a document flowchart to document the acquisition/payment system at
Oriental Trading.

b.

Oriental Trading Acquisition/Payment System
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

Enter Accounts
Payable Data for
Update

Receiving Report
Invoice

Enter Vendor
Acknowledgment

Prepare Purchase
Order Notification

Purchase Order
Notification

To Vendor

Update Accounts
Payable Master
File

D

Accounts

Payable Master
File

A

3-22

General
Ledger Master
File


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Accounting Information Systems

3.9
a.

Develop a context diagram and a level 0 DFD for the cash receipts system at
S&S.

Bank
Deposit

Payment at
Sale
Cash Receipts
System

Customers
Remitances
on Account

Cash
Receipts
Report

Management

Aged Trial Balance
Credit and
Collections

3-23


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Ch. 3: Systems Development and Documentation Techniques

3.9

a. (continued)

Customers

Level 0 Data Flow Diagram of the Cash Receipts System at S&S:

Remittance

File

Payments at
Sale
Remittances
on
Account

1.0
Process
Payments

Remittance
Slips

2.0
Update
Customer
Accounts

Endorsed
Checks &
Cash, Deposit
Slip

Bank

Accounts
Receivable
Ledger

3.0
Prepare
Reports

Aged Trial
Balance

Cash
Receipts
Report

Management

3-24

Credit and
Collections


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Accounting Information Systems

3.9

Prepare a document flowchart to document the cash receipts system at S&S.

b.

S&S Cash Receipts System
Treasurer

Clerk

Accounts Receivable

From Customer

A

B

Cash and Checks

Cash and Checks

Remittance Slip

Remittance Slip

B

Deposit Slip

Update
Accounts
Receivable
Ledger/File

To Bank

Accounts
Receivable
Ledger/File

Endorse
Checks and
Prepare
Deposit Slip for
Cash & Checks
Remittance Slips
Generate
Weekly
Reports
Cash and Checks
D

Deposit Slip
Cash Receipts
Report

Aged Trial Balance

A
To Management

To Credit &
Collections

3-25