UCSI UNIVERSITY
Faculty of Business and Management
BA201/BBA2044 Accounting Information System
Special Exercises 4
QUESTION 1
a. Sales order procedures involve the transfer of assets or services from the seller tothe
buyer. Discuss any five (5) major tasks involved in the sales order procedures.
b. The following information describes part of the cash receipt procedures of Ummi SdnBhd
which begin in the mail room of the company.
Customer payments and remittance advices arrive at the mail room, where a clerk opens
the envelopes, reconciles the cheques and remittance advices and endorses the cheques.
The clerk later gathers the remittance advices and cheques into batches, and prepares
three copies of remittance list. Then the clerk sends the cheques and a copy of the
remittance list to the cashier in the cash receipts department.
Prepare a system flowchart depicting the above cash receipt procedures.
QUESTION 2
Kukuh Berjaya Berhad is a leading manufacturer of home furniture and accessories. The company
has manufacturing plants and distribution facilities throughout Malaysia. However, its purchasing,
accounting and treasury functions are centralized at corporate headquarter in Kuala Lumpur.
Kukuh Berjaya Berhad has a highly efficient purchasing system and strong relationships with
suppliers and purchase process are expected to go smoothly over a long period.
Below are procedures for the purchasing of raw materials of Kukuh Berjaya Berhad:
Production orders and appropriate bill of materials are generated by the host computer at corporate
headquarter. Based on the bill of materials, three copies of purchase orders for the raw materials
are generated and printed by the centralised purchasing function. The purchase executives will
make the final decision on which vendors to be selected before mailing the purchase orders to the
vendors. One copy of purchase order is filed at corporate headquarter and a blind copy of the order
is sent directly to the respected branch manufacturing plants.
Dr.MAA
Jan-Apr 2024
The vendor will ship the materials and packing slip directly to the branch manufacturing plants
addresses stated in the purchase order. When materials are received by the appropriate
manufacturing plant, the receiving officer examines and verifies the count by referring to the
packing slip and transmits the receiving data to accounts payable at corporate headquarters. The
packing slip will be attached along with materials to facilitate later materials identification.
The branch manufacturing plants will immediately start the production process once the materials
are received event though without the authorised production order.
In the event that the raw material deliveries fall behind production, each branch manager is given
the authority to order materials and issue emergency purchase orders directly to the vendors. Data
about the emergency orders and verification of materials receipt are transmitted via computer to
accounts payable at corporate headquarters.
Since Kukuh Berjaya Berhad employs computerised perpetual inventory system, physical counts
of raw materials are deemed not to be cost-effective and are not performed.
Required:
(a) Discuss any FIVE (5) weaknesses in the purchasing procedures described above and
suggest any FIVE (5) improvements that can be implemented in the purchasing procedures
of Kukuh Berjaya Berhad. Write your answer based on the following format:
Weaknesses Recommendations
(b) Explain the functions of the following documents.
(i) Purchase Requisition
(ii) Blind copy Purchase Order
(iii) Voucher Register
(iv) Receiving Report
(v) Cash Disbursement Voucher
(c) In small organisation or functional areas that lack sufficient personnel, closesupervision can
compensate the absence of segregation controls. Explain briefly TWO (2) risks that can be
reduced by using supervision control in receiving department.
Dr.MAA
Jan-Apr 2024
