Reference no: EM132049010
Question - Ashton has decided to analyze the accounts payable process at S&S. His intent is to document how to present system works so the transition to a computerized system will be easier. He also hopes to improve any weaknesses he discovers in the system. In the following narrative, Ashton explains what happens at S&S: Before S&S pays a vendor invoice, the invoice must be matched against the purchase order used to request the goods and the receiving report that the receiving department prepares. Because all three of these documents enter the accounts payable department at different times, a separate alphabetical file is kept for each type of document. The purchase orders that are forwarded from purchasing are stored in a purchase order file. The receiving reports are stored in a receiving report file. When vendor invoices are received, the accounts payable clerk records the amount due in the accounts payable ledger and then files the invoices in the vendor invoice file.
S&S policy is to make sure all accounts are paid within 10 days to take advantage of the early-payment discounts that suppliers offer. When it comes time to pay a particular bill, the accounts payable clerk retrieves the vendor invoice and attaches the purchase order and the receiving report. These matched documents are forwarded to Ashton.
Ashton reviews the documents to ensure they are complete and prepares a two-part check. The checks and the other three documents are forwarded to Susan for her approval and signature. Ashton records the check amount in the cash disbursements journal.
Susan reviews the documents to ensure they are valid payables and then signs the checks. She forwards the check to the vendor and returns the documents and the second copy of the check to the accounts payable clerk. The clerk files the documents alphabetically in a paid invoice3 file. At the end of every month, the accounts payable clerk uses information from the accounts payable ledger to prepare an accounts payable report. This report is forwarded to Susan for her review. After she is finished with the report, Susan files it chronologically.
Required:
a. Prepare a context diagram and a Level o DFD to document accounts payable processing at S&S.
b. Prepare a document flowchart to document accounts payable processing at S&S.