SOLUTIONS FOR CHAPTER 4 - Charles Darwin...

Accounting Information Systems, 9e 1

SOLUTIONS FOR CHAPTER 4

Discussion Questions

DQ 4-1 “Data flow diagrams and systems flowcharts provide redundant pictures of an

information system (or business process). We don’t need both.” Discuss fully.

ANS. Logical data flow diagrams (DFDs) present only the logical elements of an

information system. By excluding the physical elements, the logical DFD allows

us to concentrate on what a system is doing without being distracted by how the

functions are being performed and by whom.

Physical DFDs present the physical elements of an information system. They

concentrate on who or what is acting on the data flowing through the system.

Physical DFDs allow us to concentrate on the entities involved in processing

information. We can also see how much work is done by an entity by observing

the flows into and out of an entity and whether those flows change names, which

is an indication that they have been transformed within the entity.

Finally, a systems flowchart presents the logical and the physical details of an

information system’s functions and related operations activities. It shows the

details of how a process is accomplished and also shows the organizational unit

that performs the process. As we will see in Chapter 9, these details are necessary

to permit evaluation of a system’s controls.

In conclusion, all of these diagrams are needed to get a complete picture of an

information systems (or business process). As noted previously, however, each

diagram has its function and, depending on our purpose, all may not be needed.

2 Solutions for Chapter 4

DQ 4-2 “It is easier to learn to prepare data flow diagrams, which use only a few

symbols, than it is to learn to prepare systems flowcharts, which use a number of

different symbols.” Discuss fully.

ANS. Compare the DFD symbols in Figure 4.1 to the flowcharting symbols in Figure

4.6 and you will probably conclude that it is easy to learn the DFD symbols.

Examine Figure 4.7 and see that there are several standard routines used in

flowcharts. We believe that constructing DFDs presents fewer problems in

determining layout and placement of symbols. But determining logical groupings

for a logical DFD might be difficult for you. We conclude, however, that DFDs

are easier to construct than are flowcharts. You might have a different opinion.

DQ 4-7 “If we document a system with a system flowchart and data flow diagrams, we

have overdocumented the system.” Discuss fully.

ANS. We don’t agree with this statement. Each tool depicts different aspects of a system

and is used for different purposes.

A systems flowchart depicts a system’s information and operations activities (i.e.,

a business process) and superimposes those activities onto the organization’s

structure. We use the flowchart to understand the system’s activities—both

information and operations—and to analyze the system’s controls.

Data flow diagrams concentrate on the data, the entities that act on the data, and

the information systems functions being performed by a system. We use the DFDs

to analyze each of these elements of a system. Also, we use the logical DFD

extensively in the development of new systems.


Short Problems

SP 4-5 ANS.

a. 3 h. 8

b. 10 i. no match

c. 2 j. 4

d. no match k. 1

e. 5 l. 6

f. 7 m. 9

g. no match n. no match


Problems

Problems 4 through 7 Solutions for Good Buy, Inc.

P 4-4 ANS. a. Table of Entities and Activities for Good Buy, Inc.

Entities Para Activities

Customer 1 1. Log on to Web site.

Web server 1 2. Request current catalog.

ERP system 1 3. Send current catalog (assumes read and format catalog data).

Web server 1 4. Display catalog.

Customer 1 5. Select items and quantities.

Web server 1 6. Edit customer input (items and quantities) for accuracy.

1 7. Send requested items and quantities to ERP system.

ERP system 1 8. Allocate inventory.

1 9. Send allocated items and quantities to Web server.

Web server 1 10. Display allocated items and quantities on customer screen.

Customer 1 11. Verify that order is correct.

1 12. Enter shipping and credit card information.

Web server 1 13. Edit customer input (shipping and credit card information) for

accuracy.

1 14. Send credit card information and amount of sale to credit card

company.

Credit card company 1 15. Send verification number to Web server.

Web server 1 16. Display confirmation number on customer screen.

1 17. Notify ERP system that sales have been completed.

ERP system 1 18. Change inventory status from allocated to sold.

1 19. Print picking ticket/packing slip in warehouse.

1 20. Record sale and accounts receivable.

Warehouse


FIGURE SM-4.5 Problem 4 part b solution—context diagram—for Good Buy, Inc.

FIGURE SM-4.6 Problem 5 solution—physical DFD—for Good Buy, Inc.


P 4-6 ANS. a. Annotated Table of Entities and Activities for Good Buy, Inc.

Entities Para Activities Process

Customer 1 1. Log on to Web site.

Web server 1 2. Request current catalog.

ERP System 1 3. Send current catalog (assumes read and

format catalog data).

Web server 1 4. Display catalog.

Customer 1 5. Select items and quantities. 1.0 Enter order.

Web server 1 6. Edit customer input (items and quantities)

for accuracy.

ERP System 1 8. Allocate inventory.

Web server 1 10. Display allocated items and quantities on

customer screen

Customer 1 11. Verify that order is correct. 2.0 Verify order and

customer credit.

1 12. Enter shipping and credit card

information.

Web server 1 13. Edit customer input (shipping and credit

card information) for accuracy.

ERP System 1 18. Change inventory status from allocated to

sold. 3.0 Complete sale.

1 20. Record sale and accounts receivable.


FIGURE SM-4.7 Problem 6 part b solution—logical DFD—for Good Buy, Inc.


FIGURE SM-4.8 Problem 7 solution—systems flowchart—for Good Buy, Inc.

Ac

co

un

ting

Info

rmatio

n S

ys

tem

s, 6

e 4

-8


Problems 4 through 7 Solutions for Millennium Insurance Company

P 4-4 ANS. a. Table of Entities and Activities for Millennium Insurance

Entities Para Activities

Customer 1 1. Send request for auto insurance.

Sales office (sales clerks) 1 2. Prepare policy request form.

1 3. File policy request form (copy 2).

1 4. Forward completed policy request form (copy 1) to input

preparation section.

Data preparation section

(data entry clerks)

1 5. Key policy request forms.

1 6. Key-verify policy request data.

Computer operations

(computer)

2 7. Retrieve policy request data from the network.

2 8. Edit policy request data.

2 9. Sort policy request data.

3 10. Print a summary report listing edited request data.

3 11. Send summary report to sales office.

Sales office (sales clerks)

3 12. Compare summary report to file copy of policy request forms.

3 13. Notify computer operations to go ahead with processing (if

everything checks out).

Computer operations

(computer)

3 14. When notified, process policy request data against the policyholder

master data to create a new policy record.

3 15. Create disk for printing.

3 16. Print premium notices.

3 17. Send notices to customer.


FIGURE SM-4.9 Problem 4 part b solution—context diagram—for Millennium Insurance

FIGURE SM-4.10 Problem 5 solution—physical DFD—for Millennium Insurance


P 4-6 ANS. a. Annotated Table of Entities and Activities for Millennium Insurance

Entities Para Activities Process

Sales office (sales clerks) 1 2. Prepare policy request forms.

3 3. File policy request form (copy 2). 1.0 Capture Policy

Requests.

Input preparation section

(data entry clerks)

1 5. Key policy request forms.

1 6. Key-verify policy request data.

Computer operations

(computer

2 8. Edit policy request data.

2 9. Sort policy request data.

3 10. Print a summary report listing edited

policy request data. 2.0 Edit Policy Requests.

Sales office (sales clerks) 3 12. Compare summary report to copy 2 of

policy request forms.

3 13. Notify computer operations to go ahead

with processing (if everything checks

out).

Computer operations

(computer)

3 14. When notified, process policy request

data against the policyholder master data

to create a new policy record.

3.0 Record Policy

Requests.

3 15. Create disk for printing.

Computer operations

(computer)

3 16. Print premium notices. 4.0 Prepare Premium

Notices.


FIGURE SM-4.11 Problem 6 part b solution—logical DFD—for Millennium Insurance


FIGURE SM-4.12 Problem 7 solution—systems flowchart—for Millennium Insurance


SOLUTIONS FOR CHAPTER 5

Discussion Questions

DQ 5-11 Demonstrate your understanding of some of the coding schemes discussed in

Technology Summary 5.2 by indicating which type of code is represented by each

of the following. You should be prepared to explain and defend your answers.

ANS. The following coding schemes apply:

a. The student ID codes used at your college: This answer, of course, will vary

from institution to institution. For example, the student IDs at Bentley College

are assigned in straight sequential order.

We know of some universities that use social security numbers as the student

ID. A social security number (SSN) is an example of a block code, comprising

the following groups of digits:

The first three digits are an area code. Currently, these three digits indicate

the state in which the holder lived when applying for the SSN. The state is

derived from the holder’s postal ZIP code. Formerly, these three digits

indicated the specific social security field office that issued the card.

The middle two digits are a group number that has no geographic or data

significance. Rather, this block breaks the SSNs into conveniently sized

blocks for use in internal operations and order of issuance.

The last four digits are a sequential serial number that is assigned in

straight numerical sequence from 0001 to 9999 within each group.

b. MICR codes used by the banking industry: MICR codes that are imprinted on

bank checks and deposit slips evidence aspects of several different coding

schemes: significant digit, self-checking digit, and sequential.

For instance, bank checks typically have a nine-digit significant digit code,

located in the lower-left corner of the check, which is used for routing and

sorting the check. Assuming that these nine digits are 021302268, you could

analyze this code as follows:

The first four digits, 0213, are assigned as follows:

o The first two digits, 02, identifies Blank Bank’s Federal Reserve

district; 01 might stand for New England, 02 for New York, and so on.

o The third digit identifies the Federal Reserve Office (head office or

branch) or a special collection arrangement.


o The fourth digit shows Blank Bank’s state or a special collection

arrangement.

The next four digits, 0226, represent the bank’s unique institutional

identifier.

The ninth digit, 5, is a self-checking digit (or check digit), which,

combined with the first eight digits, verifies the routing number’s accuracy

in computer processing.

The account number (let’s assume number 123407889 for our example) would

typically be another significant digit code, where the first two digits, 12, show

the account type and the next seven digits, 3407889, represent the specific

account.

Finally, the check number is an example of a sequential code.

c. The customer codes used in Figure 5.3: These codes, consisting entirely of

alphabetic characters, are examples of a mnemonic coding method. The code

ETC stands for Bikes Et Cetera, and so forth. In this example, the alpha

characters are taken in some way from the full names of the customers, a

device that certainly aids a human operator in quickly identifying the

customer, but one that is practical only where the number of different

customers is reasonably small.

DQ 5-12 What are the comparative advantages of the various data coding types discussed

in Technology Summary 5.2 when applied to each of the following? Discuss fully.

Note: In the following answer, we do not separate the discussion of employee,

vendor, and customer ID numbers because the factors that one would consider in

designing a coding scheme for each would be similar. Only when a particular

consideration would apply to one of the three and not to the others will we

mention it.

ANS. Some of the key points (in no order of importance) that students might have

included in their answers are the following:

Computers manipulate numeric data more efficiently than they handle alpha

characters. On the other hand, humans usually find alphabetic codes easier to

remember. This point is a factor to discuss in connection with the relative

advantages of mnemonic coding.

Another design consideration is the size of the database. For instance, a

mnemonic coding scheme might have some merit where the number of

customers (or vendors or employees) is small but probably is impractical for

large databases.

Sequential, block, and mnemonic coding methods provide limited ability to

classify objects in the database according to common attributes. A principal


advantage of significant digit and hierarchical codes is that they facilitate the

classification of data.

The general ledger chart of accounts is an application for which a hierarchical

coding scheme is especially germane.

A check digit is often used in practice in the case of customer codes. The main

purpose of the self-checking digit code is to ensure that the ID number is

keyed in accurately. When the customer is doing the keying (e.g., through a

bank’s ATM terminal), the check digit is advantageous. Check digits are

particularly helpful when the master data is not available for comparison to

the input code. If the master data is available, the master record that matches

the code can be retrieved from the master data table and presented to the data

entry clerk for comparison to the input source data. This should ensure that the

correct code has been entered. When master data is available, the importance

of controls such as check digit is diminished.

SOLUTIONS FOR CHAPTER 4 - Charles Darwin...

Documents

Transcript of SOLUTIONS FOR CHAPTER 4 - Charles Darwin...