Accounting Information Systems:
A Business Process Approach
Chapter Two: Business Processes
and AIS Data
Exhibits: 2.3, 2.4, 2.5
Tables: 2.1 - 2.7
Exhibit 2.3 Guidelines for Recognizing Events
Guideline 1: Recognize the first event in a process occurs when a
person or department within an organization becomes responsible for
an activity.
Guideline 2: Ignore activities that do not require participation by an
internal agent.
Guideline 3: Recognize a new event when responsibility is transferred
from one internal agent to another.
Guideline 4: Recognize a new event when a process has been
interrupted and resumed later by the same internal agent. After the
interruption, someone outside the organization or the process may
restart the process. Alternatively, the process may continue at a
scheduled time.
Guideline 5: Use an event name and description that reflects the broad
nature of the event.
Exhibit 2.4 Examples of Common Event Names for the Revenue Cycle
Respond to customer inquiries

Make appointment (for customer)
Develop agreements with customers to provide goods and services in the futur

Take customer order

Sign contract (as seller)

Prepare quote/estimate offering goods or services on certain terms

Make reservation (e.g., airlines and hotels)

Register student in a class
Provide services or ship goods to the customer

Pick goods

Ship goods

Rent or lend goods

Perform service
Bill customer or third party

Bill customer

Bill third party (e.g., credit card company or insurance provider)
Collect cash

Receive cash, check, or credit card
Deposit cash in the bank
Prepare reports
Exhibit 2.5 Examples of Common Event Names for the Acquisition Cycle
Consult with supplier

Make appointment (with supplier)
Process requisitions

Request quote from suppliers

Make requisition
Develop agreements with suppliers to purchase goods or services in the future

Sign contract (as buyer)

Make reservation (e.g., airlines and hotels)
Receive goods or services from the supplier

Receive goods

Deliver goods to user

Borrow or rent goods

Receive service
Recognize payable, select invoices, and pay cash

Accept purchase invoice

Write checks

Sign checks and send to supplier
Table 2.1 First Event in the Revenue Cycle of Angelo’s Diner
Internal agent
assuming
Event responsibility Starts when
1
Server
Customer is ready
order
to order
ticket
Activities in the event
Record customer
on sales
Table 2.2 Events in the Revenue Cycle of Angelo’s Diner
Event
2
Internal agent
assuming
responsibility
Kitchen staff
3
Server
4
Cashier
5
Manager
Starts when
Activities in the event
Kitchen staff
Cook meal
receives order
Server picks
Pick up, deliver food
up meal
Customer comes
Accept cash and sales ticke
to cashier
customer; ring up sale; give
change; print sales summary; give
sales summary to manager
Cashier gives Count cash and compare it t
sales summary summary and total of sales tickets
Table 2.3 Events Identified by Interruption of Processing
Event
Internal agent
assuming
responsibility
4a
Cashier
4b
Cashier
Starts when
Activities in the event
Customer comes
Collect cash; ring up sale;
to cashier
change
Shift ends
Print sales summary; give
sales summary to manager
Table 2.4 Naming Events in the Revenue Cycle of Angelo’s Diner
Event
Internal agent
assuming
responsibility
Take order
Server
Prepare food
Kitchen staff
Serve food
Server
Collect cash
Cashier
Close register
Cashier
Reconcile cash Manager
Starts when
Activities in the event
Customer is
Record customer order on
ready to order sales ticket
Kitchen staff
Cook meal
receives order
Server picks
Deliver meal to customer
up meal
Customer comes
Accept cash and sales
to cashier
ring up sale; give change
Shift ends
Print sales summary; give
sales summary to manager
Cashier prints Count cash and comp
sales summary to sales summary and total of
sales tickets
Table 2.5 Events in ELERBE’s Revenue Cycle
Event
Internal agent
assuming
responsibility
Starts when
Activities in the event
Respond to
Sales representative
Sales reps visit
On-campus visit or telepho
customer inquiries
professor or
exchange discussing products,
professor calls
availability, and price
Take order
Order entry clerk
Order is received Order received by mail, fax
e-mail; enter customer and order
details; print picking ticket and
sales order
Pick goods
Warehouse
Picking ticket is
Locate ordered goods at w
employee received
house; pick and assemble goods;
send to Shipping Department
Ship goods
Shipping clerk
Goods and completed
Create packing s
picking ticket arrive and give to carrier; send copy of
packing slip to Billing Department
Bill customer
Billing clerk
Packing slip arrives Compare sales order to packing
slip; record billing information;
print invoice and send to customer
Collect cash
Cash receipts clerk Check is received inRecord cash receipt and store
the mail
cash
Deposit checks
Office manager
Checks are received
Deposit checks in bank; ob
from cash receipts deposit receipt
Table 2.6 Files Used in ELERBE’s Order Processing Application
Panel A: Inventory File
ISBN
Author
0-256-12596-7
Barnes
300
0-127-35124-8
Cromwell
0-135-22456-7
Cromwell
0-146-18976-4
Johnson
260
0-145-21687-7
Platt
0-235-624-6
Title
Introduction to Business
Price
On Hand
$78.35
Allocated
4,000
Building Database Applications
$65.00
Management Information Systems $68.00
Principles of Accounting
3,500
5,000
$70.00
0
50
8,000
Introduction to E-commerce
$72.00
Rosenberg HTML and Javascript Primer
5,000
$45.00
40
6,000
0
ISBN = unique international standard number assigned to the book; Price = standard selling price; Quantity
Allocated = quantity of books committed to customer orders but not yet shipped.
Panel B: Customer File
Customer# Name
3450
Brownsville C.C.
3451
Educate, Inc.
Address
Brownsville, TX
Fairhaven, MA
Contact
Person
Smith
Costa
3452
Bunker Hill, MA
LaFrank
Bunker Hill College
Phone
(956) 555-0531
(508) 888-4531
(617) 888-8510
Table 2.6 Files Used in ELERBE’s Order Processing Application (Concluded)
Panel C: Order File
Order# Order Date
Customer#
0100011 05/11/2003
3451
Open
0100012 05/15/2003
3451
Open
0100013 05/16/2003
3450
Open
Order Date = date the order was received by ELERBE, Inc.
Panel D: Order_Detail File
Order#
ISBN
Quantity
0100011
0-256-12596-7
200
0100011
0-146-18976-4
150
0100012
0-135-22456-7
50
0100012
0-146-18976-4
75
0100012
0-145-21687-7
40
0100013
0-146-18976-4
35
0100013
0-256-12596-7
100
ISBN = number identifying the book; Quantity = quantity ordered
Status
Table 2.7 ELERBE’s Need for Transaction Files
Event
Transaction file needed?
Respond to
Possibly, if salespeople wish to track a customer’s communications with
the
customer inquiries company in order to understand customer preferences.
Take order
Yes. An Order File is needed to record details so that the
order can be filled.
Pick goods
Probably not. The actual quantities picked can be stored in
the file maintained
for shipping.
Ship goods
Yes. A Shipment File is needed to record quantities shipped
so that inventory
balances can be updated.
Bill customer
Yes. An Invoice File is needed to record invoice number, payment
terms, and
amount owed so that (1) sales reports can be
printed, (2) the customer’s
balance due can be updated, and (3)
data are available for processing the
payment when received.
Collect cash
Yes. A Cash Receipt File is needed to record payments so that they can
be
applied against invoices and so that customer balances and
cash balances can
be updated.
Deposit checks
Possibly. A Deposit File can be created for comparison to the deposits
reported on the bank statement, although merely keeping deposit
receipts
might serve this purpose.