Smith's Market is a small fruit and vegetable market in Bethlehem, Pennsylvenia. The market has a reputation
Question:
Smith's Market is a small fruit and vegetable market in Bethlehem, Pennsylvenia. The market has a reputation for low prices and high quality which draws customers from other towns. Currently, it has 40 employees. The owner, Smith, noticed a decline in profit and sales, while his purchases of products for resale have continued to rise. The revenue cycle procedures are as follows:
A customer gets the products he/she wishes to purchase and puts them in the shopping cart. Before proceeding to the check out counter, a store clerk weighs the items and writes the weight and price of the item on the sticker which is attached to the product. The customer then pushes the shopping cart to the checkout register where a clerk processes the sale. The clerk keys in the amounts only of the product in the cash register. A total of the purchases is printed and given to the customer after receiving the cash. Only if a customer requests for an official receipt will the clerk prepare a BIR registered OR for the customer. The goods are placed in a paper bag by the clerk and given to the customer.
The market has four registers but are not dedicated to specific sales clerks because the sales clerks perform other roles such as stocking shelves and unloading delivery trucks. Assigning sales clerks to specific registers is therefore impractical. At the beginning of the shift, the supervisor collects all four cash register drawers from the treasury clerk in the office in the back of the market. The supervisor is given P1,000 (in small denominations) to put in each of the 4 drawers. This will serve as loose change to enable the cashiers to make change. The supervisor signs a log to indicate that he has taken custody of the drawers and places the drawers in the registers.
At the end of the shift, the supervisor returns the cash register drawers containing the cash and the 2nd copy of the cash register tape to the treasury clerk. He signs the log to indicate that he has handed in the cash drawers. The treasury clerk later counts the cash and reconciles them to the tape register totals. If the totals are more than the cash, the supervisor is asked to call the attention of the sales clerk to explain the difference. If the difference amounts to more than P500, the supervisor and the sales clerk each will reimburse half of the amount in the form of a salary deduction processed by the treasury clerk. If the register total is lesser than the cash, no action is taken. The treasury clerk will then record the total sales amount in the sales journal and general ledger in the PC computer. Afterwhich, he prepares a deposit slip and asks the messenger to give the money to Mr. Smith who lives in the house adjacent to the market. Mr. Smith deposits the cash the next morning to the local branch of the bank in the next barangay. The messenger picks up the validated deposit slip from Mr. Smiths house and gives it to the treasury clerk who files it in the folder.
Requirement:
Do a context diagram, level 0 and child diagrams (if needed) of the Revenue Cycle.
Cornerstones of Managerial Accounting
ISBN: 978-0176530884
2nd Canadian edition
Authors: Maryanne M. Mowen, Don Hanson, Dan L. Heitger, David McConomy, Jeffrey Pittman