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Unformatted text preview: Accounting Information Systems, 8e 1 SOLUTIONS FOR CHAPTER 11 Discussion Questions DQ11-1 Develop several examples of possible goal conflicts among the various managers and supervisors depicted in Figure 11.1. ANS. Some examples might include the following: • Accounts receivable wanting to record only a good check, delays recording cash receipts until the checks clear. During this delay, a customer’s credit may be denied, a sale may be lost, and a customer may go elsewhere with their future business. • Frequent billing cycles will lead to more timely payments. However, less frequent cycles involving larger batches of invoices leads to a more efficient billing process and a more efficient cash receipts process (i.e., a conflict within the finance function). • To achieve faster shipments, the shipping department sacrifices the accuracy of the shipping notice, which leads to an inaccurate billing input. DQ11-2 Based upon the definition of float presented in the chapter, discuss several possibilities for improving the cash float for your company, assuming you are the cashier. ANS. Float is defined as “the time between the customer’s tendering payment and the availability of good funds, where goods funds are funds on deposit and available for use.” A cashier might improve float by doing the following: • Having customers send payments to a lockbox . These payments will be deposited more quickly than payments that must be processed by the cashier prior to being deposited at the bank. • National and international firms can have customers send payments to local banks located close to the customer. Such payments spend less time in the mail and can be cleared more quickly by the bank. • When debit cards are used for payment, funds are immediately transferred and made available for use. • When credit cards are used for payment, the credit card company will pay the seller before funds are collected from the buyer. • When payments are received in an organization in the normal manner, the cashier can reduce float by developing processes to move payments quickly through the organization and to the bank. • Electronic bill payments such as through EBPP systems. 2 Solutions for Chapter 11 DQ11-3 Using Figure 11.6, speculate about the kinds of data that might be running along the data flow that comes from the accounts receivable master data to bubble 2.1. Be specific and be prepared to defend your answer by discussing the use(s) to which each of those data elements could be put. ANS. The data flow might indicate the following: • That the customer had been billed for the item being returned. A customer should only be permitted to return items actually purchased. However, if the bill has already been paid, the data flow may not indicate that the item had been purchased. In that case, data might be obtained from an invoice history data or a shipping notice history data....
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This note was uploaded on 11/09/2010 for the course ACCT 326 taught by Professor Alt. during the Spring '10 term at American.
- Spring '10