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DescriptionCollege of Administration and Finance Sciences
Assignment (2)
Deadline: Saturday 18/02/2023 @ 23:59
Course Name: Introduction to
Accounting Information Systems
Student’s Name:
Course Code: ACCT 402
Student’s ID Number:
Semester: Second Term 22/23
Academic Year: 1444 H
For Instructor’s Use only
Instructor’s Name:
Students’ Grade:
Level of Marks: High/Middle/Low
• The Assignment must be submitted on Blackboard (WORD format only) via allocated
• Assignments submitted through email will not be accepted.
• Students are advised to make their work clear and well presented, marks may be
reduced for poor presentation. This includes filling your information on the cover
• Students must mention question number clearly in their answer.
• Late submission will NOT be accepted.
• Avoid plagiarism, the work should be in your own words, copying from students or
other resources without proper referencing will result in ZERO marks. No exceptions.
• All answers must be typed using Times New Roman (size 12, double-spaced) font.
No pictures containing text will be accepted and will be considered plagiarism.
• Submissions without this cover page will NOT be accepted.
College of Administration and Finance Sciences
Assignment Question(s):
(Marks 15)
Question 1:
(03 Marks)
Under the expenditure cycle ordering materials, supplies and services are the first activity. Explain
the following ordering threats with suitable example with each of these.
a) Purchasing at inflated prices
b) Unreliable Suppliers
c) Kickbacks
Question 2:
(03 Marks)
What are the advantages of the REA data model over the traditional AIS model?
Question 3:
(04 Marks)
Under the payroll system of an organization we find several components such as HRM Department,
Employees, Bank, Government Agencies, Insurance and other companies, Various other departments.
Take an example of an organization and explain the relationship of these components with reference
to Payroll System of that organization
Question 4:
(05 Marks)
Eid Corporation is a midsize, privately owned, industrial instrument manufacturer supplying precision
equipment to manufacturers in the Midwest. The corporation is 10 years old and uses an
integrated ERP system. The administrative offices are located in a downtown building and the
production, shipping, and receiving departments are housed in a renovated warehouse a few
blocks away.
Customers place orders on the company’s website, by fax, or by telephone. All sales are on
College of Administration and Finance Sciences
credit, FOB destination. During the past year sales have increased dramatically, but 15% of
credit sales have had to written off as uncollectible, including several large online orders to
first-time customers who denied ordering or receiving the merchandise.
Customer orders are picked and sent to the warehouse, where they are placed near the loading
dock in alphabetical sequence by customer name. The loading dock is used both for outgoing
shipments to customers and to receive incoming deliveries. There are ten to twenty incoming
deliveries every day, from a variety of sources.
The increased volume of sales has resulted in a number of errors in which customers were sent
the wrong items. There have also been some delays in shipping because items that supposedly
were in stock could not be found in the warehouse. Although a perpetual inventory is
maintained, there has not been a physical count of inventory for two years. When an item is
missing, the warehouse staff writes the information down in log book. Once a week, the
warehouse staff uses the log book to update the inventory records.
The system is configured to prepare the sales invoice only after shipping employees enter the
actual quantities sent to a customer, thereby ensuring that customers are billed only for items
actually sent and not for anything on back order.
a. Identify at least three weaknesses in Eid Corporation’s revenue cycle activities.
b. Describe the problem resulting from each weakness.
c. Recommend control procedures that should be added to the system to correct the weakness.

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