2.4 Your nursery sells various types and sizes of trees, bedding plants, vegetable plants,
and shrubs. It also sells fertilizer and potting soil. Design a coding scheme for your
nursery.
Grading depends upon the instructor’s judgment about the quality of the coding scheme.
2.5 Match the following terms with their definitions
a 10
b 23
y 20
z 15
2.6 For each of the following scenarios identify which data processing method (batch or
online, real-time) would be the most appropriate.
Some students will respond that all can and ought to be done with online-real time
processing. While all can certainly be done that way, batch processing does have its
a. online-real time
h. on-line real time
2.7 After viewing the Web sites, and based on your reading of the chapter, write a 2 page
paper that describes how an ERP can connect and integrate the revenue, expenditure,
human resources/payroll, and financing cycles of a business.
Student solutions will vary depending on the demonstrations they observe. However, the
demonstrations should give the students a more concrete and visual understanding of what
8Identify whether the following transactions belong in a master file or a transaction
file.
a Update customer address change – Master file
b Update unit pricing information – Master file
l Record purchases – Transaction file
2.9 You were hired to assist Ashton Fleming in designing an accounting system for S&S.
Ashton has developed a list of the journals, ledgers, reports, and documents that he
thinks S&S needs (see Table 2-6). He asks you to complete the following tasks:
aSpecify what data you think should be collected on each of the following four
documents: sales invoice, purchase order, receiving report, employee time card
bDesign a report to manage inventory.
cDesign a report to assist in managing credit sales and cash collections.
dVisit a local office supply store and identify what types of journals, ledgers, and
blank forms for various documents (sales invoices, purchase orders, etc.) are
available. Describe how easily they could be adapted to meet S&S’s needs.
No single answer exists with this case. Indeed, solutions will vary depending upon student
a. A sample invoice is presented in the Revenue Cycle chapter. A sample purchase order
is presented in the Expenditure Cycle chapter. A sample receiving report also appears
in the Expenditure Cycle chapter. Although student designs will vary, each document
should contain the following data items:
Sales Invoice
Customer name and address Product code or number
Total Amount due
Purchase Order
Ship to address Item numbers ordered
Receiving Report
Vendor name Vendor number
Employee Time Card
Employee name Total regular hours
b. The report to manage inventory should contain the following information:
• Preferred vendor
• Product number
• Lead time
c The report to manage credit sales and cash collections should include:
• Credit sales per period
d The answers to this will vary depending upon the types of documents carried in the office
supplies stores visited by the students.
2.10 Correct answers bolded
1 Which of the following statements is (are) true?
aTurnaround documents are company output sent to an external party and
b Data is one of a company’s most important resources but to function properly
cEach type of entity possesses the same set of attributes or characteristics of
2 Which of the following statements is (are) true?
a The data capture or input process is usually triggered by a top management
decision.
b With sequence codes, items are numbered consecutively to account for all
3 Which of the following statements is (are) true?
a Source data automation devices capture transaction data in paper form at the time
b General ledgers are often used for accounts receivable, inventory, fixed assets,
cMaster files are permanent and exist across fiscal periods; individual master
dWhen choosing an ERP system, make sure it has a module for every critical
e If an ERP system does not meet your needs, it can almost always be inexpensively
4 Which of the following statements is (are) true?
a Using source data automation or well-designed turnaround documents and
data entry screens helps ensure captured data are accurate and complete
5 Which of the following statements is (are) true?
a Online batch processing is where transaction data are entered, edited, and
processed as they occur.
6 Which of the following statements is (are) true?
aInput controls are improved by using pre-numbered source documents or by
b With mnemonic codes, blocks of numbers are reserved for specific categories of
c As ERP modules do not automatically trigger additional actions in other modules,
d In an integrated ERP system, undetected data entry errors can automatically
e A purchase to pay ERP module facilitates, production scheduling,
7 Which of the following statements is (are) true?
aTo ensure credit sales policies are followed, the system can be programmed to
b A transaction file contains records of individual business transactions and is
cAn ERP system uses a centralized database to share information across
d It is difficult for an ERP system to provide management with the up-to-date
e Use of pre-numbered documents makes it harder to verify that all transactions
8 Which of the following statements is (are) true?
aA chart of accounts facilitates preparing financial statements because data
b A database query can provide the information needed to deal with problems
c Repetitive and frequently used database queries are usually developed by users;
d Transaction files are permanent and must be maintained for several years for
9 Which of the following statements is (are) true?
a Transaction data are almost always recorded in a ledger before they are entered
b Documents are records of transaction or other company data that can be
c ERP systems are not effective in integrating nonfinancial company operations
10 Which of the following statements is (are) true?
a An audit trail is a transaction path through a data processing system from point of
origin to final output, but not backward from final output to point of origin.
SUGGESTED ANSWERS TO THE CASES
2.1 Bar Harbor Blueberry Farm
Data from Case
Date Supplier
Invoice
Supplier Name Supplier
Address
Amount
March 7 AJ34 Bud’s Soil Prep PO Box 34 $2,067.85
Purchases Journal
Page 1
Date Supplier Supplier
Invoice
Account
Number
Post
Ref
Amount
March 7 Bud’s Soil Prep AJ34 23 √ $2,067.85
General Ledger
Accounts Payable Account Number: 300
Date Description Post Ref Debit Credit Balance
Purchases Account Number: 605
Date Description Post Ref Debit Credit Balance
Account Payable Subsidiary Ledger
Account No: 23 Bud’s Soil Prep PO Box 34 Terms: 2/10,
Net 30
Date Description Debit Credit Balance
Account No: 24 Osto Farmers Supply 45 Main Terms: 2/10,
Net 30
Date Description Debit Credit Balance
Account No: 36 Whalers Fertilizer Route 34 Terms: 2/10,
Net 30
Date Description Debit Credit Balance
Account No: 38 IFM Wholesale 587 Longview Terms: 2/10,
Net 30
Date Description Debit Credit Balance