Detailed Activity Diagram. · Detailed Activity Diagram. As its name suggests, the detailed activity diagram provides more detail as to the activities in one or more events. Figure

Detailed Activity Diagram. As its name suggests, the detailed activity diagramprovides more detail as to the activities in one or more events. Figure 9.2 presentsa detailed activity diagram for events E1, E2, and E3. As you can see, the identifi-cation of the activities in the workflow table (with numbers in superscript) pro-vided a basis for constructing this diagram. To gain further experience in preparingdetailed activity diagrams, complete the requirements in box 9.a.

434 Part III Transaction Cycles and Accounting Applications

Requestor Supervisor Secretary PurchasingOfficer

ReceivingClerk

Preparerequisition

(E1)

E: Employee

I: Inventory

RQ: Requisition

S: Supplier

S: Supplier

R: Requisition(approved)

Computer

Approverequisition

(E2)

Record requisition

(E3)

Preparepurchaseorder (E4)

Receivegoods(E5)

PO: PurchaseOrder

R: Receipt

I: Inventory

P: PurchaseOrder

Requisition

R: Requisition(in progress)

Requisition

Purchase Order

identifying workflow controls that are used by the organization. We will use it for that purpose shortly. (For detailed guidance on creating activity diagrams, seeChapter 3.)

Figure 9.1Overview ActivityDiagram for ELERBE,Inc.—Purchasing/Receiving

62006_JonesRama_CH09.qxd 5/23/2002 11:56 AM Page 434

435T

he Acquisition C

ycle—Purchasing and R

eceivingC

hapter 9

Figure 9.2 Detailed Activity Diagram for ELERBE, Inc.—Requisitions (E1, E2, E3)

Requestor Supervisor Secretary Computer

Prepare1 requisition

Give2 requisition to supervisor

E: Employee

I: Inventory

RQ: Requisition

S: Supplier

Review3 requisition

Approve4 requisition

Give5 requisition to secretary

Enter6 requisition

R: Requisition(approved)

R: Requisition(in progress)

Check7 employee

Check9 inventory

Check8 supplier

Check10 completeness

Record11 requisition

Requisition

Requisition


437The Acquisition Cycle—Purchasing and Receiving Chapter 9

Transaction TablesEvent Needed Master Tables Used Comments

Prepare None None Event data are not enteredrequisition (E1) in computer.

Approve None None Event data are not enteredrequisition (E2) in computer.

Record requisition (E3) Requisition Inventory We assume that the requestorEmployee (requestor) and supervisor are identified,Employee but the secretary is not(supervisor) identified in the requisition.Supplier

Prepare purchase Purchase Order Employeeorder (E4) (purchasing officer)

Supplier

Receive goods (E5) Receipt Employee (receiving clerk)Supplier

Table 9.3 Events and Tables Used

Inventory

(E3)

Requisition

(E5)

Receipt

(E4)

Purchase

Order

Employee

(requestor)

Employee

(supervisor)

Employee

(purchasing

officer)

Employee

(receiving

clerk)

Supplier

Goods/Services

Events Agents

m,1

m,m

m,m

m,m

m,1

m,1

m,1

m,1

m,1

m,1

Figure 9.3UML Class Diagramfor ELERBE, Inc.—Purchasing/Receiving

Notes:(a) Only a single Employee Table is needed for events E3, E4, and E5. The table has been repeatedin this diagram to indicate the type of employee(s) responsible for each of the three events.(b) The UML class diagram has been simplified by showing only one table rather than two for eachrequisition, purchase order, and receipt event. As you will see in Table 9.4, each event actually re-quires two tables, a header table and a detail table.

The diagram presented in Figure 9.3 could be refined further as follows: Theagent tables for the employees could be combined into a single Employee Table. InFigure 9.3, the Employee Table has been shown four times in order to indicate thetype of employee(s) responsible for each event. A more complete UML class dia-gram would also show more event tables. (As you will see in the record layouts,


Complete box 9.l to increase your understanding of different documentationtools.

Focus on Problem Solving 9.l

Activity Diagram, Class Diagram, and Application Menu (P1)ELERBE, Inc.

Review the overview activity diagram (Figure 9.1), the UML class diagram (Figure 9.3), and the ap-plication menu (Figure 9.4).

Required:1. Compare the activity diagram and the application menu. Which menu items correspond to events

shown in the activity diagram? What additional items appear on the menu?2. Compare the UML class diagram and the application menu. Relate each item on the UML class

diagram to the application menu.

The solution to this Focus on Problem Solving box appears on page 469. Check your answer and make sure you understandthe solution before reading further.


Acqusition Cycle Menu—Purchasing and Receiving

A. Maintain

1. Supplier 2. Inventory 3. Employee

B. Record event

1. Requisition (select goods and services for purchase) (E3)

2. Purchase order (E4)

3. Receipt (E5)

C. Display/print reports

Event reports

1. New purchase orders report 2. Open purchase order report Agent and goods/services reference lists

3. Supplier list 4. Inventory list

D. Query

1. Events 2. Suppliers 3. Inventory

E. Exit

Figure 9.4Acquisition CycleMenu for ELERBE,Inc.—Purchasing/Receiving


USING ACCOUNTING APPLICATIONS: PURCHASING AND RECEIVINGThis section starts with an examination of file maintenance for suppliers and in-ventory and then moves on to recording event data in the same order as they arelisted in the application menu. You will see that data recorded during file mainte-nance are useful for controlling the other events, especially requisitioning.

Supplier Table MaintenanceBefore requisitions can be recorded, supplier records need to be established. If therequisition is for a new type of inventory item, an inventory record must also beestablished. A sample screen for supplier maintenance is shown in Figure 9.5. Forthe sake of illustration, data have already been entered.

Data Entry Screen and Record Layout. The data entry screen for SupplierTable maintenance is displayed in Figure 9.5. Also shown is a record layout for theSupplier Table. The data shown in the record layout are taken directly from thedata entry screen.

All of the attributes in Figure 9.5 are straightforward, except perhaps, the gen-eral ledger account (G/L Account). Whenever the goods or services have been re-ceived, it will be necessary to make a journal entry. The default general ledger accountto debit when a purchase is made from this supplier is Inventory, as indicated ear-lier. The default credit terms to use when recording a bill received from the supplierhave also been entered. The fields in gray cannot be used for data entry in file main-tenance. The account name was retrieved from a General_Ledger Table after the account number 1100 was entered by the user. The Current_Balance and YTD Pur-chases will be updated when events occur, based on the information in event records.

Upon completion of data entry, the user clicks on the SAVE button, and thesystem adds the record shown in Figure 9.5 to the Supplier Table.


349 SmithSupply

$0

Supplier#

JonStevens

FallRiver

10(508)555-1851

$030 .02100

AddressName Due YTD_Purchases

Telephone#Contact_Person

Current_Balance

Discount_Day

Discount_Rate

G/L_Account

Supplier#NameAddressContact PersonTelephoneDefault G/L AccountAccount NameDefault Due in DaysDefault Discount RateDefault Discount DaysCurrent BalanceYTD Purchases

349Smith SupplyFall River, etc.Jon Stevens508-555-18511100Inventory30.0210$0$0

Supplier Table

Maintain Supplier = (menu item A1)SAVE

Figure 9.5Maintain SupplierScreen and RecordLayout


Focus on Problem Solving 9.m

Nature of File Maintenance (P4)ELERBE, Inc.

Required:1. The last three items in the maintain inventory screen are in gray because data are not entered for

these attributes. Why is the user prevented from entering data in these fields during file maintenance?2. What is the use of the field that has the “5200” value?

The solution to this Focus on Problem Solving box appears on page 469. Check your answer and make sure you understandthe solution before reading further.

Using Inventory File Maintenance to Control Execution Risks. In-ventory table maintenance also plays an important role in reducing the executionrisks identified in Exhibit 9.3 on page 440. The usefulness of inventory mainte-nance in addressing two of these execution risks is discussed next.

▪ Wrong type of product or service receivedThe creation of an inventory record reduces error as to item ordered by assigninga unique Item# and providing a clear description. Again, as mentioned in the sec-


Item#DescriptionUnit of MeasureReorder-PointDefault G/L Inventory AccountDefault COGS Account*Inventory MethodSupplier#Quantity on OrderQuantity on HandMost Recent Cost

402Blank CD-ROMCase (100)101100

5200FIFO349OO

Maintain Inventory = (menu item A2)SAVE

402 BlankCD-Rom

0

Item#

10Case(100)

01100 FIFO 3495200

U_of_M

Description Method Recent_Cost

G/L_Inventory

Reorder Quantity_On_Hand

Quantity_On_Order

Supplier#COGS

Inventory Table

Figure 9.6Maintain InventoryScreen

*COGS = cost of goods soldThe items shaded in gray are displayed by the system but not entered.


Item# is the code that ELERBE uses to identify the item.Supplier_Product# is the code that the supplier (Smith Supply) uses to identify the item.


ACCOUNTING APPLICATIONS AND CONTROLS: RECORDING DATAIN TRANSACTION TABLES

The previous section considered the two key maintenance events in the acquisitioncycle. Next, we will consider the three events from Table 9.1 (E3, E4, and E5) thatare recorded in transaction tables. They will be considered in the same order asthey appear on the application menu (B1, B2, and B3):

Record Requisition (E3, B1)At ELERBE, the purchasing process starts when the requestor fills out a paper req-uisition form. The form is signed by the supervisor and then passed on to the secre-tary who records the requisition in the computer system. In other words, the computersystem comes into play as soon as the secretary begins recording the requisition.

Data Entry Screen and Record Layout. Figure 9.7 shows a sample screenfor the entry of requisition data. Requisition# 1077 is shown in gray because it is notentered by the operator. It is automatically generated by the system. The recordsshown are added to the header and detail records as soon as the system user clickson the SAVE button. Note that in this system there are two kinds of records requiredfor recording a requisition. The header record provides general information about therequisition, and the detail record provides details as to what items were ordered.

Figure 9.7Enter Requisition(menu item B1)

10771077

Requisition#

402419

C-731M-1992

$13$18

125

Supplier_Product#

Item# PriceQuantity

Requisition_Detail Table

1077

Requisition#

122-22-333305/15/03 349613-20-7891

Requisition_Date

Employee#(requestor)

Supplier#Employee#(supervisor)

Requisition Table

Requisition#Employee# (requestor)Employee# (spvisor)Department

Requisition_DateSupplier#

1077122-22-3333613-20-7891InventoryControl05/15/03349

Enter Requisition

Supplier_Product#

Item# Quantity Price

C-31M-1992

402419

125

$13$18

SAVE


Focus on Problem Solving 9.n

Understanding the Layout of a Data Entry Screen (P4)ELERBE, Inc.

Review the data entry screen in Figure 9.9. In that screen, only the following items need to be enteredby the user: Date, Vendor ID, Vendor Item, Quantity Ordered, and Unit Cost. The rest of it is dis-played by the system.


Requisition#Employee#(requestor)Employee# (spvisor)Department

Requisition DateSupplier#

1077122-22-3333

613-20-7891InventoryControl05/15/03349

Enter Purchase Order (menu item B2)SAVE

Requisition#Purchase Order#Purchase Order DateEmployee#(purch. officer)Shipping MethodSupplier#

107759905/17/03

074-31-2525

UPS349

C-731M-1992

402419

Supplier_Product#

125

$13$18

Item# PriceQuantity

C-731M-1992

402419

Supplier_Product#

125

$11$18

Item# PriceQuantity

Information Display Data Entry

599 1077

Purchase_Order#

05/17/03 074-31-2525 UPS349

Requisition # Employee#Purchase_Order_Date

Shipping_Method

Supplier#

Purchase_Order Table (menu item B2)

599599

C-731M-1992

Purchase_Order#

402419

125

00

00

Supplier_Product #

Quantity_Ordered

Item# Quantity_Canceled

Quantity_Received

Purchase_Order_Detail Table (menu item B2)

Price

$13$18

Figure 9.8Enter Purchase Order

Table. It is displayed as soon as the Requisition# is entered in the data entry sec-tion. Note that the purchasing officer has the opportunity to enter a different Sup-plier#, Item#, and Price. The records shown are added to the header and detailrecords as soon as the system user clicks on the SAVE button.

The gray items in the data entry section are computer generated. The Purchase_Order# is acomputer-generated serial number, and the Employee# is based on the information provided bythe purchasing officer at the time of the log-in.

Examples of screens used to record purchase orders with Great Plains Dynamicssoftware and Peachtree Accounting software are shown in Figures 9.9 and 9.10, re-spectively. After reviewing these screens, answer the questions in box 9.n.

(continued)



Figure 9.9Purchase OrderScreen for GreatPlains

Figure 9.10Purchase OrderScreen for PeachtreeAccounting



Figure 9.9Purchase OrderScreen for GreatPlains

Figure 9.10Purchase OrderScreen for PeachtreeAccounting


Purchase Orders and Execution Risks. One of the execution risks listed inExhibit 9.3 is that the “expected receipt of goods or services did not occur, [or] oc-curred late.” One way to control this risk is to periodically review purchase ordersthat have not yet been filled. In order to do this, the purchasing officer can use theacquisition cycle menu shown in Figure 9.4 and choose item C5 to print the “Openpurchase orders report.” The report can be reviewed to search for purchase ordersthat have been open for a long time. Figure 9.11 is an example of such a reportavailable in Great Plains Dynamics. It shows the date of the order, the original or-der quantity, and the quantity remaining to ship. For the two orders shown, noneof the items have been received.

Figure 9.11 is an example of a purchase order status report taken from GreatPlains Dynamics. Items of particular interest have been highlighted.

Figure 9.11 Great Plains Dynamics Purchase Order Status Report (modified)

The World Online, Inc.PURCHASE ORDER STATUS REPORT

System: 7/1/03 9:29:03 PMUser Date: 7/1/03Purchase Order ProcessingRanges: From: To: From: To:Vendor ID First Last PO Status First LastName First Last PO Number PO1010 PO1011Document Date First LastSorted By: PO Number Print Option: Detailed

Include: Receipts, Open Line Items Only

PO Number Type Document Date Vendor ID Name PO Status

Site ID U Of M Quantity Quantity Remaining Remaining Unit CostOrdered Canceled to Ship to Invoice

PO1010 Standard 3/31/03 ADVANCED0001 Advanced Office Systems New� ACCS-CRD-12WH Phone Cord - 12’ White CRD-12WHNORTH Each 10 0 10 10 $3.29� PHON-ATT-53BK Cordless-AT&T 53BK-Black ATT-53BKNORTH Each 12 0 12 12 $90.25

Original Subtotal: $1,115.90 Remaining Subtotal:

PO1011 Standard 3/31/03 COMVEXIN0001 ComVex, Inc. New� ACCS-HDS-1EAR Headset-Single Ear HDST-SINGLENORTH Each 14 0 14 14 $38.59� HDWR-T1I-0001 T1 Interface Kit T1INTERFACENORTH Each 1 0 1 1 $1,495.00

Original Subtotal: $2,035.26 Remaining Subtotal:

Grand Totals: 2 Purchase Order(s) $3,151.16



In addition, the inventory and purchase order records for the item received willneed to be updated. Answer the questions posed in box 9.r.


Purchase Order#Purchase OrderDateRequisition#Employee#(requestor)Supplier#Department

Item#Items#

59905/17/03

1077122-22-3333

349Inventory

Control

402419

Enter Receipts (menu item B3)SAVE

Purchase Order#Receipt#

Employee#(receiving clerk)Receiving Date

402 419

5991405

131-31-3131

05/26/03

Quantity105

Information Display Data Entry

Receive Goods (E5, B3)After goods or services have been ordered, the next event in the cycle is the actualreceipt of the goods. Recording of goods received is initiated by selecting item B3on the application menu. Unlike the requisition and purchase order events, the re-ceiving of goods or services is an exchange transaction and includes execution risks.In addition, there is the recording risk that the transaction may be incorrectlyrecorded.

Data Entry Screen and Record Layout. Figure 9.12 shows a sample screenfor recording the receipt of goods and the records created by the process.

Figure 9.12Data Entry Screen forRecording Receipt ofGoods (E4)

The items in gray cannot be entered by the user. The information display is taken from thepurchase order records, and the Receipt# (serial number) and Employee# are entered automaticallyby the computer.

Receiving Table (menu item B3)

Receipt# Purchase_Order# Receiving_Date Employee#

1405 599 05/26/03 131-31-3131

Receipt# Item# Quantity

1405 402 10

1405 419 5

Receiving_Detail Table (menu item B3)


Documents

Detailed Activity Diagram. · Detailed Activity Diagram. As its name suggests, the detailed activity diagram provides more detail as to the activities in one or more events. Figure