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Mid Test Assignment

Name: Angenie Sanusi (00000011270)

Fanny Sutrisno (00000011288)
Monica (00000011105)
Class: A3
Subject: Accounting Information System (AIS)
Submission Date: Friday, 20th November 2015
Lecture: Mr. Andrew
Universitas Pelita Harapan (UPH)


Firstly, thanks to God because of His love and grace, this project can
finish smoothly. The purpose of this project is to learn how one
company information system in order to know the exactly work of
employee. From this project, it can be seen that one company structure
isnt as simple as people think about. The system must be reliable,
relevant and understandable.











documentation of accounting Information system. It helps writer to

determine which documentation is suitable for company and how this
documentation is help accountant or other people of to understand
how the company system work. Not only that, writer can also know
what to improve the documentation to make sure that the system is
understandable and remove unnecessary things in the system.

Last but not least, writer can know better of how to make the proper
documentation to help accountant and manager to make decision or
sole the problem especially when the company facing ineffectiveness
in the company.

Angenie Sanusi
Fanny Sutrisno

Table of Content
Table of Content...............................................................................................
I. Introduction..................................................................................................
II. Body............................................................................................................
III. Evaluation and Recommendation...............................................................
IV. Conclusion..................................................................................................

I. Introduction
XYZ Limited Company is a manufacturing company. XYZ Limited
Company opens their first company in Jakarta, Indonesia. In Jakarta,
XYZ Limited Company buys products from suppliers and manufactures
them to finished products, then sells them to stores or customers like
Matahari, SOGO or Parkson Department Store. XYZ Limited Company
focuses on selling woman clothes. The category of clothes that XYZ
Limited Company sells is around age of 15 20 year old.

The business activities in manufacturing company is purchasing,

producing, storing, and selling the inventory. In XYZ Limited Company,
this cycle is recurring. This cycle calls expenditures cycle, revenue
cycle, production cycle and to sell it, we must have workers which
include in human resources cycle. XYZ Limited Company purchases
material to produce the products from suppliers, then produces it to
finished goods after receives it, after that selling it directly to
customers or retailers and wholesalers.

There are 3 documentation techniques to form a business document.

There are Data Flow Diagram (DFD), REA model and flowcharts. XYZ
Limited Company uses flowcharts as their documentation technique.

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II. Body
Background of The Company
XYZ limited company is the manufacturing company that just
establishes which in clothes field. It is located in the Jakarta, Indonesia.
The reason why XYZ Limited Company open in Jakarta is because
Jakarta is the biggest city in Indonesia which have a large market and
opportunity to serve big department store like SOGO Department
Store, Matahari Department Store, Parkson and many others. Not only
that, by opening in Jakarta, it is easiest to find a big retailer who serve
customers out from Jakarta, therefore XYZ Limited Company sells the
clothes all around Indonesia. XYZ Limited Company makes the clothes
with a high quality and sales all over Indonesia. Type of the clothes that
the company sells is women clothes which are around 15 to 20s years
old. For instance, dress, t-shirt, pants, skirts and many others which is
following the fashion trends.

There are vision and mission of the XYZ Limited Company. The mission
of XYZ limited Company is to serve all markets in Indonesia and to
fulfill the variance demand on clothes in Indonesia. The vision of XYZ
Limited Company itself is to increase the National output and Real GDP
of Indonesia. Not only that, by establishing XYZ Limited Company, it is
hoped to support Indonesias citizen especially in isolated area to fulfill
the citizen needs of clothes.

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Documentation Technique
There are many ways to document the business activities cycle. This
documentation is for the employee or the investor to understand how
the business activity cycle in one company looks like. It also helps for
manager to know which part to analyze when theres something wrong
with the report.
1. Data Flow Diagram (DFD)
Data flow diagram is a graph that represents the input and output of
the information which is processed by the information system.
Based on Sybase (2012), DFD is useful for documentation is
because it helps to visualize how the system operates, how the
system accomplished the work and how the system implemented.
DFD consists of four basic elements which are data source and
destination, data flows, transformation processes and data stores.
Data source is the input while data destination is the output. Data
flow is from one information flow to the other information.
Transformation process is a system that will process the information
from the input to the new information then transfer to become an
output or other information for another system to process. Data
store is where the information is being stored or save and usually in

Source: Google

To use DFD there are several roles that must be obey to make the
proper DFD, which are:
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- First, it should start from left to right and top to down

- Second, there must be input and output
- Third, data flow may not be split
- Fourth, loops are not allowed
2. Flow Chart
Flow Chart is using standard symbols to describe the flow in a clear,
concise and logical manner. Every symbol in the flow chart
represents operation, input, processing activity or storage. The
advantages using flow chart is that it is easiest to analyze and easy
to understand. According to Eternal Sunshine of the Is Mind (2013)
stated that while during analyzing, flow chart can be a guidance or
blueprint. There are four type of low chart symbol, which are:
a. Input or Output Symbol
Document Symbol = Represent a Document or report in the

Multiple Copies of One Document = indicating the multiple

document with number in the up right hand corner

Input/output; Journal/Ledger = can represent both input/output or


Display = display information by online device

Online Keying = input data entry by online device

Terminal or personal Computer = combine display and online
keying which represent the computer or terminal

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Terminal Tape = manual control which the purpose is to compare

with the computer data for control purpose

b. Processing Symbol
Computer Processing = represent processing of information by
online device

Manual Operation = processing operation by manually

Auxiliary Operation = represent a processing operation by other

device expect computer

Offline Keying operation = represent operation by offline keying


c. Storage Symbol
Magnetic Disc = indicated data store permanently on magnetic
disc and usually represent master files and database

Magnetic tape = represent data store on magnetic tape and

sometimes represent transaction files

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Diskette = represent data stored on floppy disk or zip disk

Online Storage = represent data store in the temporary online

Manual Filing = represent filing of document by manually stored

and retrieved. Inside the symbol have A = Alphabetic order. D =
Data order. N = Numeric order.
d. Flow and miscellaneous Symbol
Document or processing flow = represent the direction of
processing or document flow.
Data/Information Flow = represent direction of data usually show
that the data is being copied from one document to another.
Communication Link = represent the transmission of data from
one location to another location usually via online communication
One-page Connector = connect from one location to another
location on the same page and avoid crossing lines
Off-page connector = connecting two processing flow between
two passage or signal out from one page to another pages

Terminal = represent the beginning, end or a point of interrupting

in a process or program and also indicate the external party.

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Decision = represent a decision-making step or to show

branching to alternative paths

Annotation = provides addition of descriptive comments or

explanatory notes as clarification.
3. REA (Resource, Event and Agent) Data Model
REA data model is a conceptual modeling tool specifically designed
to provide structure for designing AIS data bases. REA Data model
identifying what entities should be included in the AIS data base and
prescribing how to structure relationships among the entities in the
AIS database. The REA data model classifies entities into three
distinct categories:
1. Resources acquired and used by an organization
2. Events engaged in by the organization
3. Agents participating in these events
Symbol in the REA data model are



By using REA Data model, it helps to managers to identify the nonvalue added activities that can be eliminated, reduces the multiple

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data, collection, data storage and maintenance procedures and

store a detail information.
Nature Relationship in REA Data model:

Relationship type is based on maximum cardinality:


One to One

One to Many

Many to Many

For XYZ Limited Company, the company choose to use the flowchart
which is because flowchart is easiest to understand by the accountant

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and manager. It is easy to see the problem sources in order to solve the

Business Activity Cycle

Business Activity Cycle is the sequence way to perform in order to
reach the best result in business. There are five cycles in business
activities cycle that usually one company has. Those are production
cycle, revenue cycle, expenditure cycle, human resources or payroll
cycle and financing or general ledger cycle. XYZ Limited Company
which is a manufacturing company has four cycles of the business
activities cycle. The way manufacturing company get the products is
buying from suppliers in the form of material and produce it to finished
products which are ready to be sold.
1. Revenue Cycle
Revenue cycle is charts that represent the business cycle by
showing how the consumer gets the goods and cash collecting. It is
exchange information with customers. There are four basic cycles in
the revenue cycle, which are:
Sales order Entry
For sales order chart, it can be seen that customer take PO and
Sales Department of XYZ Limited Company will make six copies of
sales order and customer PO which some of them will separate to
the other departments. In credit department, they see the customer
information to find out that the customer is our customer and then
approved the sales orders. Next step, it will pass to warehouse to
see whether there is a stock or not. If yes then it will go to shipping

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department and make memo to make inventory control. If no then

reject the sales order. Inventory control is to control the outflow and
inflow of the inventory to prevent thief or loss inventory.
In shipping department, sales order will be note down to record the
sales order and then compare with the sales order from the
warehouse. It is need to compare in order to know that sales order
from sales department and warehouse to know if it is same and
know how much the stock in the warehouse.
Billing and Account Receivable
In billing department, sales journal will be prepared and other
document will be ordered by numeric. Not only that, invoice will be
prepared to customer and also to account receivable. In account
receivable, there will be an update of customer account receivable
which is based on the invoice.
Cash Collection
In cashier, it will receive the check which is also along with the
remittance date. So XYZ Limited Company will know when to clear
the check. In cash receipt, check will be recorded in cash journal and
transferred to the bank. In account receivable, it will then update
the remittance so it can be see when the money will be paid off to
balance the account receivable.
2. Production Cycle
Production cycle is charts that represent the business cycle by
showing the operation associated with the manufacturing of

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products. There are four basic activities in the production cycle,

which are:
Product Design
To make a design, customer make a clothes requirement which
will be sent to Design Department and then begin to make the
design. After that, design will be verify and if its satisfying, the
clothes design will be sent to customer, for them to make order.
If its not satisfying, then identify the flaws, and remake the
design and update again the Operation List and Bill of Material.
Then, from design making, it produced 2 copies of Operation List
and Bill of Material which sent to Planning & Schedule
Department and Cost Accounting Department.
Planning and Scheduling
The company are planning to have production based on
Customer Order only. In Planning & Scheduling Department, Sales
Department will sent customer order and plan for production
based on customer order (Lean Manufacturing). Then, the
department assess the available inventory and labor needed
based on the Operation List and Bill of Material from the Design
department which is where human resource will send available
employee document and inventory control will send the inventory
records to planning & scheduling dep. Then, if inventory doesnt
enough, then purchase requisition will be prepared to purchasing
department and file it also to inventory control. After there is
enough material and labor, then preparing the production
document such as 2 copies of Production Order, Move tickets,

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Production Department. A copy of Production order will be sent to

Cost Accounting Department.

Production Operation
After receiving the 4 documents from the Planning & Scheduling
Department, the Production Department initiate the production
based on the time, material, labor needed to do the production
and distribute some documents again. Here, the finished clothes
are produced and would be sent to inventory control. Document
of Material Requisition is distributed again to inventory control
and some excess material will be sent to inventory control too.
Inventory control then will update the inventory records, which
records then will sent back to planning& scheduling department
to plan for production. Then, inventory control will distribute the
excess material and material requisition to cost accounting
Also, document of Move tickets and manufacturing overhead
happened in production along with a copy of Job time ticket for
the time performed by employee to produce clothes are to be
sent to Cost Accounting Department. Production department will
also sent Payroll time card and a copy of Job time ticket of
employee, whos working in production department, to the
Human Resource Department for them to pay for their salaries
and wages.

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Cost Accounting
With the document received in Cost Accounting Department,













requisition, then Cost Accounting department do calculation on

direct material, direct labor, and manufacturing overhead of
production. Then, as a result, because there is no work in process
clothes then immediately come out with the Cost of Goods
Manufactured. In the company, the finished clothes are produced
only for customer order, so theres no inventory of finished
clothes, so Cost accounting can immediately calculate for Cost of
Goods Sold and then sent it to the Manager for determining the
Design Department will send the Operation List and Bill of
Material to Cost Accounting Department to calculate for the Cost
of Making the Design. Then, the Cost of Making the Design is sent
to the Manager also in determining the price. Both Cost of Goods
Sold and Cost of Making the Design will be combined and
manager decide to mark-up 15% of the cost to determine the
sales price to be charged for the customer.
3. Expenditure Cycle
Expenditure cycle is charts that represent the business cycle by
showing how the purchasing of and payment for goods and services.
There are four basic activities in expenditure cycle, which are:
Ordering materials, suppliers, and services
In inventory control, it can check whether there is needed of
purchasing of material. If there is needed to purchase the material,

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requisition. From the purchasing department, they will make the

purchase order to the vendor and other copies to the receiving
department, inventory control and account payable. So each
department can compare the purchase order with purchase receive.
Receiving materials, suppliers and services
For receiving department, which already receive the copy of
purchase order, will inspect the receiving good to see whether it is
in the same amount that the vendor sent and purchase order from
purchasing department. After that, receiving department will make
some copies of receiving report to the account payable, inventory
control, purchasing department and warehouse.
Approving Supplier Invoice
In account payable, it will receive the copies of receiving report from
the receiving department, copies of purchase requisition from
purchasing department, and copies of purchase order from the
purchasing department. All this files will be compared and make the
account payable sub-ledger and purchase journal. After that all the
copies and invoice will be sent to accounting department to make
the cash disbursement.
Cash Disbursements
In cash disbursements, it will once again to compare with the copies
and invoice that the account payable sent to, and make the check to
pay the vendor. All copies and then sent back to accounting
department to save and check will sent to vendor at the time that
have been settled.

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4. Human resources/payroll cycle

Human resources/payroll cycle is charts that represent the
business cycle by showing how the employee performing in the
company. There are seven basic activities in payroll cycle, which

Update Payroll Master File

From human resource, its provided the employee changes and
new employment data document and update the employee
changes. It includes the new hires, terminations, and changes in
pay rates. After that, the human resource prepare the approved
employee changes and key in to computer the changes. The
human resource will key in the employee changes and update
the payroll master file as how much to pay of these employee.
Update tax rates and deductions
The company will receive the tax rates and deductions from the
government, insurances, and other agencies to prepare for the
payroll for the employee. Then the company will update the tax
rates and deductions to the computer for them to prepare the
paychecks of employee after the tax rates and deductions.
Validate time and attendance data
Information on time and attendance comes in the form of job
time ticket and time cards from departments in company. Then
after receiving both of this documents, we do the reconciliation
and key-in to the computer the validated and the total of all the
time data as the payroll transactions file in computer. Then in
computer we sort it into the sorted payroll transaction file for the

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purpose of preparing the payroll checks along with the current

payroll master file and the tax rates and deductions from
government, insurances, and other agencies.
Prepare payroll
In preparing the payroll, the following document are produced
which are the employee paychecks, various reports and payroll
register. As payroll transactions are prepared and processed,
labor costs are accumulated to general ledger and then updated
also in payroll master file. The various report are periodically sent
to departments.
Disburse Payroll
The payroll register will be sent later to Account Payable account.








disbursement voucher are to be made which is later to be

forward to the cashier. A copy of payroll register are to be
included in general ledger here. Also, the employee paychecks
will be process further to cashier for distribution to employee.
The employee paychecks, disbursement voucher, and payroll
register are to be reviewed and sign in cashier. Then, it produces
the payroll register which are to be sent to payroll department to










disbursement voucher for accounting department, the signed

employee checks for employee after deducting and withholding
taxes, and the payroll transfer checks to the bank.
Calculate employer-paid benefits and taxes

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In cashier department, the employer pays some payroll taxes and

employee benefits directly by the existence of the withholding
taxes and miscellaneous reductions from employee paychecks,
retirement reductions, contributions to the countries, etc.
Disburse Payroll Taxes and Miscellaneous Deductions
Last, the company via cashier will record the withholding taxes
and miscellaneous deductions to the general ledger and will also
give them to the government, insurances, and various agencies.
III. Evaluation and Recommendation
XYZ Limited Company uses flow chart as their document technique to
form their data. Flow chart uses standard symbols that can be easily to
analyze and understand. The symbols in the flow chart represents
input/output, processing, storage and flows.

Flow charts are easy-to-understand diagrams that show how the steps
in a process fit together. Their simplicity makes them useful tools for
communicating how processes work, and for documenting how to do a
particular job. Furthermore, the act of mapping out a process using a
flow chart can clarify other parties understanding of it.

Flow charts are a tool for programmers and non-programmers. Flow

charts are ideal for reading code written in unfamiliar programming
language or with an extinct programming system although we are not

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expert in it. In fact, flow charts make it easy for novice or nonprogrammers to read and understand it.

Flow charts are not only used as software, but also in process
management and other fields of engineering. Flow charts are
recommended to improve by adding more photograph or color in order
to make flow charts more interesting in a presentation slideshow. Other
recommendation is to keep everything fit in one page so flow charts
can be read easily without need to flip to another page. The flow of the
cycle must be from left to right and also flow lines must be under the
symbol so it will not be overlapped.

IV. Conclusion
XYZ Limited Company is a manufacturing company that focuses on
producing and selling woman clothes within 15-20 years old. XYZ
Limited Company opens in Jakarta because Jakarta is the biggest city in
Indonesia and it also easy for the company to sell it to customer or
even retailers. Business activity cycle in XYZ Limited Company is
revenue cycle, expenditure cycle, production cycle and payroll cycle.
Each cycle has their activity itself. Those cycles need to be formed and
documented. XYZ Limited Company uses flow charts as their document
technique. With flow charts, managers and other parties can easily

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understand it. Even novice or non-programmers will easily understand

it because flow charts use standard symbols. To be easier to
understand, there is improvement that flow charts need to make. It is
by adding photograph or color to be interesting presentation slideshow.
To avoid overlapped of flow charts line, it must be consistent and
placed under the symbols, if it placed randomly, flow charts will be
difficult to be read. The last, the flow of the cycle must be from left to

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ETERNAL SUNSHINE OF THE IS MIND. (2013, February 20). Advantages
and Disadvantages of Flowchart. Retrieved November 14, 2015,
Jain, P. (2011). production Cycle. Retrieved November 16, 2015, from
Romney, M., Steinbart, P., Mula, J., McNamara, R., & Tonkin, T. (2012).
The humman Resource Management Cycle/Payroll Subcycle. In
Accounting Information Systems Australasian Edition (p. 273). New
Zealand: Pearson Higher Education AU.
Sybase. (2012, January 30). Data Flow Diagram (DFD). Retrieved
November 14, 2015, from Sybase:

Appendices Expenditure Cycle

Figure 1

Figure 2

Figure 3

Figure 4

Appendices Human Resource/ Payroll Cycle

Figure 1

Figure 2

Appendices Production Cycle

Figure 1

Figure 2

Figure 3

Appendices Revenue Cycle

Figure 1

Figure 2

Figure 3

Figure 4

Figure 5