Accounting Information Systems: A Business Process Approach Chapter Eleven: The Revenue Cycle

Exhibits: 11.3 Tables:

Exhibit 11.3 Input Controls The following types of input controls were identified in Chapter 4.  Drop-down menus that provide a list of possible values to enter.  Record checking to determine whether data entered were consistent with data entered in a related table.  Confirmation of data that were entered by a user by displaying related data from another table.  Referential integrity controls to ensure that event records are linked to records in the related master table(s).  Format checks to limit data entered to text, numbers, or dates.  Validation rules to limit the data that can be entered to certain values.  Use of defaults from data entered in prior sessions.  Computer-generated values entered in records.  Batch control totals taken before data entry compared to printouts after data entry.  Review of edit report for errors before posting.  Exception reports that list cases where defaults were overridden or where unusual values were entered.

Table 11.1 Alternative Revenue Cycle Systems* Characteristic System Requirements Alternative Ordering Methods: 1. Order before deliveryTrack orders 2. Immediate customer No need to track orders pickup (no order) Alternative Payment Timing: 1. Before deliveryTrack advance payments by customers 2. At time of deliveryRecord cash collections, but may not need to maintain customer balances 3. After deliveryTrack amounts owed by customers Alternative Forms of Payment: 1. CashMust reconcile cash collections with sales or reductions in accounts receivable 2. CheckSame as above. In addition, if a check is returned non- sufficient-funds, must track amount owed by customer 3. Credit or debit cardMust have equipment that can determine card validity Must send transactions to a third party Must save signed receipts for credit card purchases 4. Sales on accountMust track amounts owed by store credit customers Must bill customers Must collect cash after sale *This chapter will focus on the shaded alternatives.

Table 11.2 Examples of Alternative Revenue Systems Example/TypeOrder MethodPayment TimingForm of Payment RestaurantOrder before deliveryAfter serviceCash, check, or card Convenience storeNo orderAt time of purchaseCash only Magazine publisherOrder (subscription)Before receiptCheck or card

Table 11.3 Layout of Revenue Cycle Records MASTER TABLES Customer Table Contact_G/L_Due_Credit_Balance Customer#NameAddressPersonTelephoneSalesDaysLimit_Due 3451Educate, Inc.Fairhaven, MACosta $12,000$0 Inventory Table Budget_YTD_ DefaultQuantity_Quantity_G/L_G/L_Sales_Quantity ISBNAuthorTitle_Priceon_HandAllocatedSalesCOGSQuantity_Sold BarnesIntroduction$ to Business EVENT TABLES (related detail tables shown at end) Sales_Order Table (E1) Order#DateEmployee# (Order Entry Clerk)Customer# 21905/11/ Shipment Table (E3) Shipment#DateOrder#Employee# (Warehouse)Employee# (Shipper)Freight 83105/11/ $3.00 Sales_Invoice Table (E4) Invoice_Original_Amount_G/L_Post Invoice#Shipment#DateDue_DateAmountPaidPost_Date_Date /12/0306/11/03$1,169.90$005/12/03

Table 11.3 Layout of Revenue Cycle Records (Continued) Cash_Receipt Table (E6) Payment#DateEmployee# (AR clerk)AmountPost_DateG/L_Post_DateDeposit# /19/ $6, Deposit Table (E7) Deposit#DateEmployee# (Cashier)Amount 50305/19/ $6, EVENT DETAIL TABLES Sales_Order_Detail Table (E1) Order#ISBNOrder_QuantityQuantity_ShippedPrice $ $70.00 Shipment_Detail Table (E3) Shipment#ISBNQuantity_ShippedQuantity_Invoiced Sales_Invoice_G/L_Detail Table (E4) Invoice#G/L_Account#Amount $1, ($3.00) ($1,166.90) $ ($732.00)

Table 11.3 Layout of Revenue Cycle Records (Concluded) Cash_Receipt_Detail Table (E6) Payment#Invoice#Amount $1, $5, Cash_Receipt_G/L_Detail Table (E6) Payment#G/L_Account#Amount $6, ($6,199.90)