Sunday, January 26, 2020

Expenditure Cycle

Expenditure Cycle Learning Outcomes Describe and discuss the business activities that related to data processing operations that performed in the expenditure cycle and identify the information needed to make those decisions. Spot and dealing with the major threats and estimate the adequacy of various control procedures in the expenditure cycle. Understand and familiar with a data model (REA diagram) of the expenditure cycle. Introduction What Should You Know!! The Expenditure Cycle The expenditure cycle involves interactions with your suppliers. You buy goods or services and pay cash. The primary objective of the expenditure cycle is to minimize the total cost of acquiring and maintaining inventory, supplies, and services. Also to ensure that all goods and services are ordered as needed, receive and verify that they are in good condition as were ordered. Accounting for expenditures is an answer for all questions related to activity in any organization. Accounting entities have increased requirements due to budgetary reporting needs and the variety of different fund types related to the expenditure cycle. The recording of expenditure related transactions must be carefully monitored and controlled to meet these requirements. Objectives of the Expenditure Cycle The primary objective of the expenditure cycle is to minimize the total cost of acquiring and maintaining inventory, supplies, and services. Other objectives related to expenditure cycle: To ensure that all goods and services are ordered as needed To receive all ordered goods and verify that they are in good condition To safeguard goods until needed To ensure that invoices pertaining to goods and services are valid and correct To record and classify the expenditures promptly and accurately To post obligations and cash disbursements to proper suppliers’ accounts in the accounts payable ledger To ensure that all cash disbursements are related to authorized expenditures To record and classify cash disbursements promptly and accurately Figure 3.1: Context Diagram of the Expenditure Cycle Figure 3.2: Level of Expenditure Cycle Basic Activities for Expenditure Cycle There are three basic activities performed in the expenditure cycle are: 1. Ordering goods, supplies, and services the Key decisions in this process involve identifying what, when, and how much to purchase from whom to purchase. Weaknesses in inventory control can create significant problems on inaccurate records cause shortages and one of the key factors affecting this process is the inventory control method to be used. We will consider three alternate approaches to inventory control: Economic Order Quantity (EOQ)-traditional approach to managing inventory just in Time Inventory (JIT)*-seeks to reduce inventory levels by improving the accuracy of forecasting techniques Materials Requirements Planning (MRP)*-to minimize or eliminate inventory by purchasing or producing only in response to actual sales The order processing typically begins with a purchase request followed by the generation of a purchase order for inventory control system. The demanding to purchase goods or supplies is triggered by the inventory control function or an employee noticing a shortage. For advanced inventory control systems, initiate purchase were automatically requests when quantity falls below the reorder point. The need to purchase goods typically results in the creation of a purchase requisition. The purchase requisition is a paper document or electronic form that identifies: Who is requesting the goods Where they should be delivered When they’re needed Item numbers, descriptions, quantities, and prices Possibly a suggested supplier Department number and account number to be charged The purchase requisition is received by a purchasing buyer (Agent) in the purchasing department that typically performs the purchasing activity and the detail on the suppliers and the items purchased can be pulled from the supplier and inventory master files. A crucial decision is the selection of supplier and basic considerations are price, quality and dependability. Based on this three criteria’s, the supplier has should selected and identify a product so its can become part of the product inventory master file so the supplier does not have to be carried out and repeated every time for every purchasing for products that are seldom ordered. It’s also important to track and periodically evaluate supplier performance including data on purchase prices, rework and scrap costs and supplier delivery performance to make sure the process it’s done on time. Purchase Order A purchase order is a document or electronic form that formally requests a supplier to sell and deliver specified products at specified prices. The PO is both a contract and a promise to pay. It includes: Names of supplier and purchasing agent Order and requested delivery dates Delivery location Shipping method Details of the items ordered Multiple purchase orders may be completed for one purchase requisition if multiple vendors will fill the request. The ordered quantity may also differ from the requested quantity to take advantage of quantity discounts. Blanket Order A blanket order is a commitment to buy specified items at specified prices from a particular supplier for a set time period. Reduces buyer’s uncertainty about reliable material sources Helps supplier plan capacity and operations Information Technology on ordering In AIS, Information technology also can help and improve for efficiency and effectiveness of purchasing function based on time and cost using: Electronic Data Interchange(EDI) to transmit purchase orders vendor-managed inventory systems reverse auctions pre-award audits procurement cards for small purchases 2. Receiving and storing these items The receiving department is responsible to accepts deliveries from vendor or suppliers and reports it to warehouse manager that who reports to Vice President (VP) of Manufacturing. Inventory stores department typically stores the goods and also reports to warehouse manager. The receipt of goods must be communicated to the inventory control function to update inventory records. The two major responsibilities of the receiving department are deciding whether to accept delivery and verifying the quantity and quality of delivered goods.The first decision is based on whether there is a valid purchase order is accepting an unordered goods wastes time, handling and storage. Verifying the quantity of delivered goods is really important so the company only pays for goods received and inventory records are updated accurately Companies must an effectively and clearly communicate with their staff especially receiving clerk so that all deliveries counting accurately. The receiving clerk need to sign receiving report, record the quantity received and also carefully examine each delivery for signs of obvious damage before routing the inventory to the warehouse. The receiving report is the primary document used in this process: It documents the date goods received, shipper, supplier, and Purchase Order (PO) number Shows item number, description, unit of measure, and quantity for each item Provides space for signature and comments by the person who received and inspected Receipt of services is typically documented by supervisory approval of the supplier’s invoice. When goods arrive; a receiving clerk compares the PO number on the packing slip with the open PO file to verify the goods were ordered. Then counts the goods Examines for damage before routing to warehouse or factory Three possible exceptions in this process: The quantity of goods is different from the amount ordered The goods are damaged The goods are of inferior quality If one of these exceptions occurs, the purchasing agent resolves the situation with the supplier and typically allows adjustment to the invoice for quantity discrepancies. If goods are damaged or inferior, a debit memo is prepared after the supplier agrees to accept a return or grant a discount. One copy goes to supplier, who returns a credit memo in acknowledgment and other copy to accounts payable to adjust the account payable and other one go to shipping to be returned to supplier with the actual goods. IT can help improve the efficiency and effectiveness of the receiving activity: Bar-coding RFID EDI and satellite technology Audits 3. Paying for these items There are two basic sub-processes involved in the payment process: Approval of vendor invoices-by the accounts payable department, which reports to the controller. The legal obligation to pay arises when goods are received and the basic approach for processing vendor invoices are non-voucher system and voucher system Actual payment of the invoices-Payment of the invoices is done by the cashier, who reports to the treasurer.The cashier receives a voucher package, which consists of the vendor invoice and supporting documentation, such as purchase order and receiving report. Internal Control for Expenditure Cycle Before we move on to discuss internal controls in the expenditure cycle, let’s do a brief review of the organization chart, including: Who does what in the expenditure cycle To whom they typically report Purchasing: selects suitable suppliers and issues purchase orders. Receiving: decides whether to accept deliveries and counts and inspects deliveries. Inventory Stores: stores goods that have been delivered and accepted. Account Payable: approves invoices for payment Cashier: Issues payment to vendors. Figure 3.3: Partial organization chart for units involved in expenditure cycle In the expenditure cycle, Accounting Information System (AIS) should provide internal and external controls to ensure that the following objectives are met: All transactions are properly authorized All recorded transactions are valid All valid and authorized transactions are recorded All transactions are recorded accurately Assets are safeguarded from loss or theft Business activities are performed efficiently and effectively The company is in compliance with all applicable laws and regulations All disclosures are full and fair Threat and Control There are several actions a company can take with respect to any cycle to reduce threats of errors or irregularities. These include: Using simple, easy to complete documents with clear instructions Using appropriate application controls, such as validity checks and field checks Providing space on forms to record who completed and who reviewed the form Pre-numbering documents to encourages recording of valid and only valid transactions. Restricting access to blank documents (reduces risk of unauthorized transaction). The threats that may arise in the three major steps of the expenditure cycle, as well as general threats, Electronic Data Interchange (EDI) related threats, and threats related to purchases of services. Before we discuss specific threats, it may be helpful to have some background on a form of occupational fraud and abuse which is broadly referred to as corruption. Corruption cases often involve arrangements between a company’s purchasing agent and a sales representative for one of the company’s vendors. The vendor’s representative may try to induce the purchasing agent to buy goods that are over-priced, inferior quality. Aren’t even needed and also aren’t even delivered. In exchange, the vendor’s rep typically offers the purchasing agent something of value. That â€Å"something† might be money, payment of a debt, a job offer, an expensive vacation, or anything the purchasing agent might value. According to the Fraud Examiner’s Manual published by the Association of Certified Fraud Examiners, these schemes usually take four forms: Bribery Conflict of interest Economic extortion Illegal gratuities Information Needs for Expenditure Cycle: Information is needed for the following operational tasks in the expenditure cycle, including Deciding when and how much inventory to order Deciding on appropriate suppliers Determining if vendor invoices are accurate Deciding whether to take purchase discounts Determining whether adequate cash is available to meet current obligations Information is also needed for the following strategic decisions based on setting prices for products/services, establishing policies on returns and warranties, deciding on credit terms, determining short-term borrowing needs and planning new marketing campaigns. The AIS needs to provide information to evaluate purchasing efficiency and effectiveness, supplier performance, time taken to move goods from receiving to production and percent of purchase discounts taken. Both financial and operating information are needed to manage and evaluate these activities. Both external and internal information are needed when the AIS integrate information from the various cycles, sources, and types, the reports that can be generated are unlimited. They include reports on: Supplier performance Outstanding invoices Performance of expenditure cycle employees Number of POs processed by purchasing agent Number of invoices processed by A/P clerk Number of deliveries handled by receiving clerk Number of inventory moves by warehouse worker Inventory turnover Classification of inventory based on contribution to profitability We also know that an accountant should continually refine and improve these performance reports Summary In this subtopic, we really learned about the basic business activities and data processing operations that are performed in the expenditure cycle on: Ordering goods, supplies, and services Receiving and storing them Approving invoices and paying for them We also learned how IT can improve the efficiency and effectiveness of these processes and learned about decisions that need to be made in the expenditure cycle and what information is required to make these decisions. This subtopic also discuss about the major threats that present themselves in the expenditure cycle and the controls that can mitigate those threats

Saturday, January 18, 2020

Simply Inspiring (Public Speaking)

Assalamualaikum and very good morning I bid to our beloved teacher _____, and my fellow friends . I’m Fathin who is a nobody but I’m here to become somebody that can inspire my precious friends with my simple speech. ‘Simply Inspiring’ What exactly are you capable of achieving? What is a realistic expectation for your life and what constitutes sheer madness? Is there a limit to how high you should aim? The simple answer to these questions is simply that you are capable of achieving anything you set your mind to; if you can think it, then it’s a realistic expectation; and you can aim as high as you want. We have probably all heard the â€Å"wise† saying: â€Å"the sky is the limit. † This would seem to have a lot of wisdom in it at first glance. However, it implies that man’s potential has a limit when in actual fact, man’s potential is limitless. Let’s examine what exactly your potential as a human being is. Potential is all that you can be, but have not yet become. It is all you can accomplish, but have not yet accomplished. It is unexposed or dormant ability. This means that the ability to become and to do is already there. It just hasn’t been brought out and utilized. Your most powerful asset is your mind. The answer to the question ‘what is a realistic goal and what is achievable’ is entirely up to you. If your mind can accept that something is achievable, it will find a way to attain that thing. Your possibilities are limited only by your thinking. What may be a limit for one person is a walk in the park for another. It’s all in the mindset. Your potential as a human being, then, is unlimited. You have within you the ability to become and to achieve anything you want. Now that you understand that your potential is limitless, your next challenge is to answer the question: what do you want out of life? Before you start scratching your head and making excuses, let me help you a little. See yourself as the truly capable human being that you are. Find your own way. Utilise the potential within you. Dig out your potential like a prospector digs for oil. The oil has always been there just waiting to be tapped. But if no one bothered to search for it and bring it to the surface it would just remain there dormant, wasting and useless. If you do not challenge yourself to grow beyond your present circumstances, it will just waste away and be totally useless not only to you, but to the rest of humanity. Ladies and gentlemen/Teacher and my beloved friends, I want to share a very inspirational story. It is just not a mere story. It is a real story. The story of Nick Vujicic. What Nick Vujicic has faced his whole life. Without any warning whatsoever, Nick was born with no arms or legs. As luck would have it, his mom was a nurse, and his father, a pastor. But an amazing thing happened. He saw past his limbs and his body to something more important and enduring: his spirit and his attitude. After accepting himself and his role in the world, he went on to earn a double Bachelor's degree in Accounting and Financial Planning in Australia (where he's from. ) From that moment forward, he's been living his dream to help others accept themselves and their roles in life. Everyone, he thinks, is here for a purpose. Teacher and friends/ Ladies and gentlemen, At the moment we already have the belief toward ourselves, the plans and strategy to achieve our main goal, SUDDENLY.. things go wrong. Does it seem like despite your best efforts things never work out as you planned? Are you in despair because just when it seems you are making progress something goes wrong? At such times it is easy to feel defeated and to give up, but what can you do to stay on top of things? One of my favorite poems, â€Å"Don’t Quit,† makes the statement more eloquently by saying: When things go wrong, as they sometimes will When the road you’re trudging seems all uphill†¦ †¦Rest if you must, but don’t you quit. Nick Vujicic with his motivational quote: â€Å"If I fail, I try again, and again, and again. If you fail, are you going to try again? The human spirit can handle much worse than we realize. It matters how you are going to finish. Are you going to finish strong? † It is a source of strength and hope for many during difficult and stressful times. The reason is that it states a simple truth so well that for many it is like shining a light in the darkness. Things will go wrong at times, but you determine what happens after a setback. There are in essence two basic mindsets when it comes to dealing with setbacks. One is the mindset of a pessimist(negative) and the other is one of an optimist(positive). It si important for us to ensure that we choose to be an optimist, although optimist had no control over what happened, they have the power to influence or determine the outcome. This is what determines whether you rise again after you fall or stay on your belly and mourn endlessly until you are blue in the face. Your attitude when things go wrong is ultimately more important than the event itself and is what will determine if the outcome will be positive or negative. I am in agreement with Nick Vujicicâ€Å"The challenges in our lives are there to strengthen our convictions. They are not there to run us over. † Even me,myself had many times when I have turned a â€Å"bad† situation into one that benefits me. Friends ,it is a matter of attitude and our mind. A positive attitude can be learnt and developed. It is a matter of choice. You can make the choice, whenever faced with a difficulty to look at it form an optimistic point of view rather than a pessimistic one. It comes to the end of my speech, but before that I would like to conclude . You can ask any motivator , they will tell you that we need to set our mind positively to believe with our own potential which is limitless . Do not limit our potential with limited vision! Last but not least, never quit. Believe me, there’s always silver lining. Thank you for lending me your attention. Assalamualaikum.

Friday, January 10, 2020

What You Must Know About Article Review Essay

What You Must Know About Article Review Essay The Honest to Goodness Truth on Article Review Essay A vital analysis is a whole kind of text dealing with a specific article or book in detail as a literature review a part of a broader kind of document. In case it's a scientific article being reviewed, the author is going to be asked to use database searches to retrieve the outcomes of the search. Now you need to handle the core of your paper. The very first reading of the short article is essential, as it aids the reader to contact the author of the report to be reviewed. Students must understand how to compose an article summary. The author's arguments ought to be taken note of. Our writer is likely to make sure the post is going to be completed in the right way and according to your instructions. A superb article review implies that the writer reads the article several times to come up with a comprehensive comprehension of the content and its major points. When identifying the write-up, it is critical that the writer selects an article that talks about a topic they are conversant with. Beneath the title, cite the article that you're going to review. People, first, follow the link out of curiosity in the event the title is that interesting. Stress the sentences or quotes you would like to use. The title is supposed to be short and precise, giving all the information which the reader may want to comprehend what the essay is all about. An article review is owned by the most often assigned papers. It is a piece of academic writing which combines a summary of an article and its evaluation. Usually, it contains a summary of the content, an evaluation of the text, and a presentation of the reviewer's personal understanding of the article. Writing an article review isn't nearly expressing your opinion on the job. Questions shouldn't be accusatory or judgmental. Lesson Summary Writing an article review is similar to a conversation with a person. The post starts with a discussion on the value of environmental preparation. The very first portion of the article review writing process is reading the guide to be reviewed for the very first time. If you compare your article review with different ones you find it possible to acquire the point of what you will need to write way faster. An article review is similar to an argument as you'll need to take a position on the article whilst not getting caught up in the matter accessible. What Article Review Essay Is - and What it Is Not While studying in high-school or college, there's a good chance you will need to compose an article review. All you have to do is consult with an expert customized essay writing service like ours that is guaranteed to submit all of your assigned work in time. The only means to compose an exceptional article review w ithout reading the whole content is to get in touch with professional on-line writing services. There are occasions when students do not will need to use articles as the principal sources. Write down your reactions to certain regions of the write-up and any important issues the report covers. It enforces the need for the nurse to follow a certain order during the process. It discusses the importance of the nurse asking all of the cardinal symptoms of each specific body system mentioned by the patient. Reviewing journal articles is the perfect method to find out more about a particular region of interest and how research is conducted.

Wednesday, January 1, 2020

Effective Business Communication The Success Of An...

Effective business Communication is crucial to the success of an organization. The ability to communicate successfully with your audience shows your knowledge of the matter and your level of professionalism to handle the issue. Successful communication, ethical communication, collaboration, listening, nonverbal skills, business messages, direct and indirect approaches, business etiquette and establishing creditability, to name a few, are concepts that influence business communication and the ability to be successful. Communication between the sender and receiver influence the business in many ways. If you have an idea but cannot relay the message, it is useless to the audience and the organization. If the audience does not receive the message delivered, your delivery is lost. Effective skills, such as communication, help with the positive delivery of your message. Communication increases conversations, productivity, better changes for financial gain, and better relationship with the employees. Communication is one of the most important stages in the work place. Effective communication influences the overall make up of an organization internally and externally. The text states that ethical communication is the conduct that governs behavior within a society. It includes relevant information that is true and is not deceptive in any way. Ethical communication is a crucial element of an organization. It influences the morals that the organization hold as a unit. The impactShow MoreRelatedThe Relationship Between Effective Communication And Organizational Efficiency1123 Words   |  5 Pagesrelationship between effective communication and organizational efficiency, showing in particular how communication barriers may impact adversely on an organisation. 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