ch 2 - notes

ch 2 - notes - Chapter 2 Overview of Business Processes...

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Unformatted text preview: Chapter 2: Overview of Business Processes Monday, January 14, 2008 5:27 AM Information Needs and Business Activities • Examples of Business Activities • Acquire capital • Acquire building and equipment • Hire and train employees • Acquire inventory • Advertising and marketing • Sell merchandise • Collect payments from customers • Pay employees • Pay taxes • Pay vendors Business Cycles • Transaction - an agreement between two entities to exchange goods or services or any other event that can be measured in economic terms by organization EX: selling goods to customers, buying inventory from suppliers, paying employees • Transaction processing - the process that begins with capturing transaction data and ends with an informational output such as the financial statements • Give-get exchange - an event where two entities exchange items such as cash for goods or services • Transaction cycles: • Revenue cycle - goods and services are sold for cash or a future promise to pay cash Receive and answer customer inquiries, take customer orders and enter them into the AIS, approve credit sales, check inventory availability, initiate back orders for goods out of stock, pick and pack customer orders, ship goods to customers or perform services, bill customers for goods shipped or services performed, update Sales and Accounts Receivable, receive customer payments and deposit them in the bank, update Accounts Receivable, handle sales returns, discounts, allowances, and bad debts, prepare management reports, send appropriate information to the other cycles • Expenditure cycle - companies purchase inventory for resale or raw materials to use in producing products in exchange for cash or a future promise to pay cash Request goods and services be purchased, prepare, approve, and send purchase orders to vendors, receive goods and services and complete a receiving report, store goods, receive vendor invoices, update Accounts Payable, approve vendor invoices for payment, pay vendors for goods and services, handle purchase returns, discounts, allowances, prepare management reports, • Production cycle - raw materials are transformed into finished goods Design products, forecast, plan, and schedule production, request raw materials for production, manufacture products, store finished products, accumulate costs for products manufactured, prepare management reports, • Human resources/payroll cycle - employees are hired, trained, compensated, evaluated, promoted and terminated Recruit, hire, and train new employees, evaluate employee performance and promote employees, discharge employees, update payroll records, collect...
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This note was uploaded on 04/08/2008 for the course ACC 3385 taught by Professor Butler during the Spring '08 term at Texas State.

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ch 2 - notes - Chapter 2 Overview of Business Processes...

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