ais homework #2

ais homework #2 - Alec Kraft AIS Ch.2 1. The flow of cash...

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Alec Kraft AIS Ch.2 1. The flow of cash through the transaction cycles are spending money are resources, which is using the expenditure cycle, then adding value to the products or services, which is the conversion cycle, and finally receiving money from outside sources in exchange for products or services, which is known as the revenue cycle. For the expenditure cycle cash is used in the subsystems of purchasing/accounts payable, cash disbursements, payroll, and fixed assets. The purchasing/ accounts payable system involves acquiring physical inventory and placing orders from Vendors. The cash disbursements system involves authorizing the cash payment, disbursing cash to the necessary vendors, and recording the transaction. The payroll system involves obtaining labor usage data from employees, computing the payroll, and disbursing paychecks to the right employees. The fixed asset system processes transactions to the correct acquisition, maintenance, and disposal of fixed assets of the company. Most of the transactions are based on a credit relationship so cash isn’t actually dispersed for days or even weeks after the action has taken place. Since the cash can be so far off of the actual acquisition of the goods the expenditure can
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ais homework #2 - Alec Kraft AIS Ch.2 1. The flow of cash...

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