CHAPTER 2
OVERVIEW OF BUSINESS PROCESSES
SUGGESTED ANSWERS TO DISCUSSION QUESTIONS
2.1 Table 2-1 lists some of the documents used in the revenue, expenditure, and human
resources cycle. What kinds of input or output documents or forms would you find in
the production [or conversion] cycle?
Students will not know the names of the documents but they should be able to identify the
tasks about which information needs to be gathered. Here are some of those tasks:
Requests for items to be produced
Documents to plan production
Schedule of items to be produced
List of items produced, including quantity and quality
Form to allocate costs to products
Form to collect time spent on production jobs
Form requesting raw materials for production process
Documents showing how much raw materials are on hand
Documents showing how much raw materials went into production
List of production processes
List of items needed to produce each product
Documents to control movement of goods from one location to another
2.2With respect to the data processing cycle, explain the phrase “garbage in, garbage
out.” How can you prevent this from happening?
When garbage, defined as errors, is allowed into a system that error is processed and the
resultant erroneous [garbage] data stored. The stored data at some point will become
output. Thus, the phrase garbage in, garbage out. Data errors are even more problematic in
ERP systems because the error can affect many more applications than an error in a non-
integrated database.
Companies go to great lengths to make sure that errors are not entered into a system. To
prevent data input errors:
Data captured on source documents and keyed into the system are edited by the
computer to detect and correct errors and critical data is sometimes double keyed.
Companies use turnaround documents to avoid the keying process.
Companies use source data automation devices to capture data electronically to avoid
manual data entry with its attendant errors.
Well-designed documents and screens improve accuracy and completeness by
providing instructions or prompts about what data to collect, grouping logically related
pieces of information close together, using check off boxes or pull-down menus to
2-1
TURNAROUND DOCUMENT is a document that has been created by a computer to be used for data entry. It is a called a turnaround document because once it has been filled in by users it is then used for input back into the computer. An example of a turnaround document is the mark sheet that is filled in by your teacher. The mark sheet is generated by the computer, filled in by the subject teacher and then used for input back into the computer so that reports can be printed.
Learn new Accounting Terms
SURVEILLANCE is close watch kept over someone or something.
UST BENCHMARK RATE is the yield to maturity [calculated in accordance with standard market practice] corresponding to the bid-side price for the relevant UST Bond.
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