The Internal Audit Director has asked you to document the cash receipts system (which includes updating...
The Internal Audit Director has asked you to document the cash receipts system (which includes updating of A/R) at FreeFall, Inc A narrative of the system follows:
FreeFall, Ine sells parachutes. An individual may come into the office and buy directly. When the customer comes to the office, they pay at time of purchase by cash or check. Other orders are made by mail and receipts come into the mailroom. Only checks are received by mail. In most cases, a remittance advice is included with the payment. The mail room clerk sends all checks and remittance advices to a clerk in Treasury. When the clerk receives the checks from the mailroom, she manually prepares a remittance advice for all checks in which a remittance advice was not sent. Near the end of the day, she gathers all the cash, checks and remittance advices and gives them to the Treasurer. The treasurer endorses all checks and prepares a deposit slip for the checks and the cash. He keeps a copy of the deposit slip and files by date. He returns the checks and cash to the clerk who makes a daily deposit at the local bank. When checks are received in the mail as payment for accounts due, the Treasurer sends the remittance advices to Accounts Receivable. Each morning, the remittance advices, by the use of a terminal, are entered into the system and stored on a magnetic disk. Remittance advices are filed by date after being entered. At the end of the day, the Accounts Receivable database which is stored on magnetic disk is updated with the transaction file. Weekly (end of week), accounts receivable generates an aged accounts receivable report. Two copies of the report are generated and one copy is sent to the Treasurer and the other is filed by date.
Required: On a separate piece of paper for each part, prepare the following:
a. A Level 0 DFD for the cash receipts system at FreeFall, Inc.
b. A business process modeling diagram (BPM) for the cash receipts system at Freel
c. Prepare a document flowchart for the cash receipts system at FreeFall, Inc
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The Internal Audit Director has asked you to document the cash
receipts system (which includes updating...
The Internal Audit Director has asked you to document the cash receipts system (which includes updating...
The Internal Audit Director has asked you to document the cash receipts system (which includes updating of A/R) at FreeFall, Inc A narrative of the system follows: FreeFall, Ine sells parachutes. An individual may come into the office and buy directly. When the customer comes to the office, they pay at time of purchase by cash or check. Other orders are made by mail and receipts come into the mailroom. Only checks are received by mail. In most cases, a...
Ashton Fleming has asked you to document the cash receipts system at S&S. Ashton's narrative of...
Ashton Fleming has asked you to document the cash receipts system at S&S. Ashton's narrative of the system follows: Customer payments include cash received at the time of purchase and payments received in the mail. At day's end, the treasurer endorses all checks and prepares a deposit slip for the checks and the cash. A clerk deposits the checks, cash, and deposit slip at the local bank each day. When checks are received as payment for accounts due, a remittance...
Mail is delivered every day by noon to the mail room of Alex Corp, a privately-owned manufacturer. Customer payments are...
Mail is delivered every day by noon to the mail room of Alex Corp, a privately-owned manufacturer. Customer payments are by check are enclosed in distinctive blue envelopes. The mail clerk separates those envelopes from all other mail. The clerk sends the unopened envelopes to the treasurer’s office. The treasurer opens the envelopes and compares the check amounts with the enclosed remittance advice. The treasurer endorses all checks, “For deposit”, prepares a 2-part list of all payments from customers, The...
Mail is delivered every day by noon to the mail room of Alex Corp, a privately-owned manufacturer. Customer payments are...
Mail is delivered every day by noon to the mail room of Alex Corp, a privately-owned manufacturer. Customer payments are by check are enclosed in distinctive blue envelopes. The mail clerk separates those envelopes from all other mail. The clerk sends the unopened envelopes to the treasurer’s office. The treasurer opens the envelopes and compares the check amounts with the enclosed remittance advice. The treasurer endorses all checks, “For deposit”, prepares a 2-part list of all payments from customers, The...
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Reference the narrative for
Figure 3-12(picture 1) to complete picture 2 the missing labels and
data flows.
3.12 Charting, Inc., a new audit client of yours, processes its sales and cash receipts documents in the following manner: 1 Payment on account. Each morning a mail clerk in the sales department opens the mail. The mail clerk prepares a remittance advice (showing customer and amount paid) if one is not received. The checks and remittance advices are then for warded to...
Refer to the system flowchart and identify the internal control risks represented in it: Mail Room...
Refer to the system flowchart
and identify the internal control risks represented in it:
Mail Room Clerk 1 Mail Room Clerk 2 Accounts Receivable Department Remittance Advice Check Remittance Advice Check Check Remittance List Remittance Advice AR Sub Ledger Open Mail and Reconcile Remit advice and Check Prepare Remittance List Distribute RA and Checks Reconcile, Record in Journal, and Accounts, Deposit Cash Cash Receipts Journal Remittance Advice Check Remittance List AR Control GL Cash Check Remittance List Remittance Advice Deposit...
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Green Products Garden Supply (Stand-Alone PC-Based Accounting System) Green Products Garden (GPG) Supply sells and distributes a wide range of garden products and equipment including organic fertilizers, premium flower and grass seeds, organic pesticides, and garden spreaders. GPG's headquarters and warehouse is located in Hopewell, Virginia. Their customers are primarily small garden centers and landscape companies in the Mid-Atlantic States. Sales are on credit. GPG's current information system includes manual procedures supported by independent (non-networked) PCs in each department. Communications...
Company: Sea Safari Tours Process Scenario: Sea Safari Tour’s manager describes the cash receipts process as:...
Company: Sea Safari Tours Process Scenario: Sea Safari Tour’s manager describes the cash receipts process as: Customer payments to Sea Safari Tours include cash received at the time of initial Tour’s purchase and, over time, mailed account payments are sent in by customers with a remittance slip (that are received together in the US Post Office mail delivery). At day's end, the Controller endorses all checks and prepares a deposit slip for the checks and the cash. An accounting supervisor...
Sales Order Processing System The customer sales order is received via phone or through the mail. Gus Grinwich, the sales clerk, receives the sales order and checks the customer’s credit record. Once...
Sales Order Processing System The customer sales order is received via phone or through the mail. Gus Grinwich, the sales clerk, receives the sales order and checks the customer’s credit record. Once Grinwich checks the customer’s credit record, he prepares the sales order. From this sales order, Grinwich prepares a customer copy, stock release, shipping notice, two copies of the invoice, ledger copy, packing slip, and the file copy. One of the invoice copies, the ledger copy, and the file...
The assignment is to create a document flowchart for a company's processes. The flowchart may be...
The assignment is to create a document flowchart for a company's processes. The flowchart may be created in Excel or a flowcharting tool. The deliverable for the project is a PDF version of the flowchart. The flowchart is limited to a one page printout in landscape mode. Case: Madison Water District bills its customers on a monthly cycle. At the end of each month a meter reader goes into the field with a meter reading worksheet listing all of...
The Internal Audit Director has asked you to document the cash receipts system (which includes updating of A/R) at FreeFall, Inc A narrative of the system follows: FreeFall, Ine sells parachutes. An individual may come into the office and buy directly. When the customer comes to the office, they pay at time of purchase by cash or check. Other orders are made by mail and receipts come into the mailroom. Only checks are received by mail. In most cases, a...
Ashton Fleming has asked you to document the cash receipts system at S&S. Ashton's narrative of the system follows: Customer payments include cash received at the time of purchase and payments received in the mail. At day's end, the treasurer endorses all checks and prepares a deposit slip for the checks and the cash. A clerk deposits the checks, cash, and deposit slip at the local bank each day. When checks are received as payment for accounts due, a remittance...
Reference the narrative for
Figure 3-12(picture 1) to complete picture 2 the missing labels and
data flows.
3.12 Charting, Inc., a new audit client of yours, processes its sales and cash receipts documents in the following manner: 1 Payment on account. Each morning a mail clerk in the sales department opens the mail. The mail clerk prepares a remittance advice (showing customer and amount paid) if one is not received. The checks and remittance advices are then for warded to...
Refer to the system flowchart
and identify the internal control risks represented in it:
Mail Room Clerk 1 Mail Room Clerk 2 Accounts Receivable Department Remittance Advice Check Remittance Advice Check Check Remittance List Remittance Advice AR Sub Ledger Open Mail and Reconcile Remit advice and Check Prepare Remittance List Distribute RA and Checks Reconcile, Record in Journal, and Accounts, Deposit Cash Cash Receipts Journal Remittance Advice Check Remittance List AR Control GL Cash Check Remittance List Remittance Advice Deposit...
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