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Unformatted text preview: Accounting Information Systems, 8e 1 SOLUTIONS FOR CHAPTER 13 Discussion Questions DQ13-1 Refer to effectiveness goals A and B shown in the control matrix in Figure 13.11. For each activity (accounts payable and cash disbursements), describe goals other than the one discussed in the chapter. ANS. Possible accounts payable effectiveness goals: (Contained in Figure 13.11.) Optimize cash discounts. Preclude duplicate payments. Prevent unauthorized payments. Provide timely general ledger updates. Furnish timely notice of cost of goods received. Facilitate cash planning. Process purchase returns and allowances in accordance with company policy. Possible cash disbursements effectiveness goals: (Contained in Figure 13.11.) Ensure that the amount of cash maintained in demand deposit accounts is sufficient (but not excessive) to satisfy expected cash disbursements. Maintain good vendor relations. Minimize check preparation and processing costs. Provide accurate and complete information for general ledger cut-off procedures. Preserve the organizations credit standing. DQ13-2 Explain why ambiguities and conflicts exist among operations process (effectiveness) goals, and discuss some potential ambiguities and conflicts relative to the goals you described in Discussion Question 13-1. ANS. Conflicts exist because each organizational unit wants to do its best (or at least be seen as doing its best). However, many (perhaps any) individual units cannot possibly perform at their best because trade-offs must be made so that the organization as a whole can do its best. 2 Solutions for Chapter 13 Ambiguities may exist when it is not clear when a goal has been reached, which could happen, for example, when goals have subgoals. For example, can the cash disbursements process provide both complete and accurate information for cut-off procedures? In addition, some effectiveness goals may conflict with the other operation process goals in the efficient employment of resources and security of resources categories. Conflicts that may exist relative to the processes goals in DQ 13-1 include the following: To ensure good vendor relations, excessive cash may be kept on hand to be able to pay vendors more quickly than is required by the terms offered. To pay invoices quickly to obtain cash discounts, important controls in the receiving and invoice verification processes may be sacrificed. DQ13-3 Without redrawing the figures, discuss how Figures 13.3, 13.4, and 13.6 would change as a result of the following independent situations (be specific in describing the changes): a. Employing a voucher system that involved, among other things, establishing vouchers payable that covered several vendor invoices....
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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